The Bank of Canada holds at 0.50% on April 12, 2017. Stronger growth is encouraging, but the Bank wants durability.
The decision at a glance
| Policy measure | Announcement |
|---|---|
| Overnight target | 0.50% |
| Change | No change |
| Bank Rate | 0.75% |
| Deposit rate | 0.25% |
Stronger growth is encouraging, but the Bank wants durability
The Bank raises its 2017 growth forecast to 2.5% and expects spare capacity to be absorbed in the first half of 2018. Recent spending on housing and by households is strong, while oil and gas activity has resumed. Some of that strength comes from temporary factors, including the Canada Child Benefit, so it is too early to call the recovery self-sustaining.
Exports remain uneven and business investment is weaker than the Bank would normally expect at this stage. Employment is strong, but hours worked and wages are less convincing. The Bank also reduces its estimate of potential growth because persistent underinvestment limits future productive capacity.
Headline CPI is at 2%, partly because of energy and carbon-pricing effects, while core measures have been drifting lower. The hold reflects this mixed picture: better growth has not yet produced broad, lasting inflation pressure. A Greater Sudbury buyer should welcome more stable financing conditions without assuming national housing strength describes every local price range or removes the need for careful conditions.
What this means for a mortgage
The overnight target influences short-term borrowing costs, including lender prime rates. Variable mortgages and home-equity lines of credit are more directly exposed to prime-rate changes. Fixed mortgage offers also depend on bond yields, funding costs, the term and lender competition; they can move even when the Bank holds.
Put the announcement into a Greater Sudbury plan
Buying or renewing
Ask for written figures using your balance, down payment and amortization. Compare payment mechanics, prepayment options, penalties and the cash left after closing. A variable mortgage with fixed payments may change how much principal you repay instead of changing the payment immediately; the contract determines the result.
Preparing to sell
Financing affects what buyers can carry, but it does not set one price for every home. Compare recent sales and active alternatives in the same neighbourhood and price range. Condition, carrying costs, presentation and offer terms remain central to the decision.
Official announcement: Bank of Canada, April 12, 2017. The national policy decision does not, by itself, establish a change in Greater Sudbury property values.
For context, compare the March 1, 2017 hold at 0.50% with today’s decision.
For a local plan, explore the Buyer Experience or Seller Experience.
Expect Moore for Your Real Estate.
— Chad Moore, REALTOR®
— Lake City Realty Ltd., Brokerage