The Bank of Canada’s benchmark is the rate at which retail banks borrow money from each other and is the basis for the saving and lending rates that get passed on to customers, impacting the Prime Rate.
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Toronto, Canada (PRWEB) June 04, 2013
Canadalend.com, the leading low-cost, private mortgage solution provider in Canada, is releasing an expert statement on the Bank of Canada’s decision to leave its benchmark overnight rate target at 1%.
The Bank of Canada reported recently that it is maintaining its target for the overnight rate at 1%; this level has held steady for 22 consecutive policy meetings dating back to September 2010. Economic indicators suggest that growth in the first quarter was stronger than the Bank projected in April. But it expects growth to moderate throughout the remainder of the year, at about 1.5%. (Source: Bank of Canada press release, “Bank of Canada maintains overnight rate target at 1 per cent,” May 29, 2013; http://www.bankofcanada.ca/2013/05/press-releases/fad-press-release-2013-05-29/.)
“The Bank of Canada’s benchmark is the rate at which retail banks borrow money from each other and is the basis for the saving and lending rates that get passed on to customers, impacting the Prime Rate,” says Bob Aggarwal, President of Canadalend.com. “Variable rate mortgages, lines of credit, and student loans are all based on the Prime Rate.”
“Staying the course at 1% is, of course, great news for those looking to get the best rates possible on a mortgage, loan, or refinancing. And while the central bank hinted that the rates aren’t expected to change in the immediate future, it is leaning toward a rate hike,” Aggarwal adds.
“In fact, according to one bank, the yield on a five-year Government of Canada bond, a pricing benchmark for five-year mortgages, is expected to increase more than threefold over the next four years, from around 1.3% today to 4.1% in 2017. These rate increases could translate into a financial struggle for those Canadians who’ve never had to deal with rising interest rates. And make it difficult for some to even get a loan or first mortgage,” he observes. (Source: TD Economics, “Long-Term Economic Forecast,” March 20, 2013; http://www.td.com/document/PDF/economics/qef/long_term_mar13.pdf.)
“Those wanting to take advantage of the current low interest rate climate and get a loan or first mortgage should contact a licensed Canadalend.com agent. Those already with a loan or mortgage who don’t want to contend with higher interest rates will need to decrease their balances as quickly as possible,” Aggarwal concludes.
To learn more about Canadalend.com, visit the web site at http://www.Canadalend.com.
Canadalend.com is one of the largest, most trusted private mortgage brokers in Canada, with skilled independent licensed professionals helping Canadians coast-to-coast. Canadalend.com provides its clients with residential and commercial mortgages, home equity credit, debt consolidation, and assistance with financing concerns.