The Bank of Canada holds at 1.00% on October 25, 2017. After two increases, the Bank pauses to assess sensitivity.
The decision at a glance
| Policy measure | Announcement |
|---|---|
| Overnight target | 1.00% |
| Change | No change |
| Bank Rate | 1.25% |
| Deposit rate | 0.75% |
After two increases, the Bank pauses to assess sensitivity
The Bank forecasts 3.1% growth in 2017, moderating to 2.1% in 2018. The economy is operating close to potential, but wages and other labour indicators suggest some room remains. The question is whether additional workers and capacity can support growth without creating excessive inflation.
Household debt makes this assessment especially important. Housing and consumption are expected to slow in response to higher rates and housing-policy changes, and indebted households may react more strongly to rate increases than in the past. Meanwhile, a stronger dollar restrains exports and delays the projected return of inflation to 2% until the second half of 2018.
NAFTA renegotiation and other policy uncertainties add caution. The Bank says less support will probably be needed over time, but holds while it studies wages, inflation and the economy's response to the recent moves. An owner considering a larger mortgage can use that pause to compare payments under several renewal rates, rather than treat the current payment as permanent.
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, October 25, 2017. The national policy decision does not, by itself, establish a change in Greater Sudbury property values.
For context, compare the September 6, 2017 increase to 1.00% 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