The Bank of Canada holds at 0.50% on May 24, 2017. The oil adjustment is largely complete, but wages and exports lag.
The decision at a glance
| Policy measure | Announcement |
|---|---|
| Overnight target | 0.50% |
| Change | No change |
| Bank Rate | 0.75% |
| Deposit rate | 0.25% |
The oil adjustment is largely complete, but wages and exports lag
The Bank sees encouraging signs in business investment and increasingly broad household spending and housing activity. The economy's adjustment to lower oil prices is largely complete. An improving labour market supports demand across more regions, although the Bank expects growth to moderate after a very strong first quarter.
The restraint comes from inflation and exports. Intense retail competition is lowering food prices, core inflation remains below 2%, and wages are still subdued. Export growth is limited by competitiveness challenges. These details explain why stronger housing and consumer activity do not automatically trigger a higher policy rate today.
Housing-related policy measures have not yet substantially cooled markets, and the Bank remains alert to borrowing vulnerabilities. The hold preserves support while it looks for a more balanced expansion. For a household entering the market, borrowing capacity and sustainable ownership cost are still different numbers. Build a budget that can absorb maintenance or a less favourable renewal even if today's approval looks comfortable.
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, May 24, 2017. The national policy decision does not, by itself, establish a change in Greater Sudbury property values.
For context, compare the April 12, 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