The Bank of Canada announced this morning that it will leave its key interest rate unchanged, as anticipated by most economists.  As a result of this decision, lending institutions in Canada are expected to keep their prime lending rate steady.  The Bank has held its key rate steady since May of this year, following seven straight rate hikes.   

While interest rates on variable rate mortgages remain unchanged with today’s announcement, pricing on new variable rate mortgages has become increasingly competitive this year, with several lenders now offering variable rate mortgages at the prevailing prime rate minus 0.9%, or more.  Fixed-rate mortgages are not likely to be affected directly by today’s announcement as their rates are influenced by trends in the bond market.  However, the “spreads” between the rates on government bonds and discounted fixed mortgage rates have widened over the past week or so, as bond markets continue to price in the prospect of a slowing economy in 2007.  This trend suggests there may be room for a drop in the rate for new fixed mortgages. 

An Invis Mortgage Consultant can explain current trends in interest rates, and can advise you on the best mortgage option to suit your individual needs.  Invis also has a number of calculators available on www.invis.ca that allow mortgage holders and prospective home buyers to examine different financing scenarios in more detail.  If you are thinking of buying a home, call an Invis Mortgage Consultant today to get pre-approval – you’ll receive a “rate hold” for up to 120 days and will get a clear sense of how much house you can afford.