The Bank of Canada holds at 1.25% on April 18, 2018. A weak opening quarter does not overturn the expansion.
The decision at a glance
| Policy measure | Announcement |
|---|---|
| Overnight target | 1.25% |
| Change | No change |
| Bank Rate | 1.50% |
| Deposit rate | 1.00% |
A weak opening quarter does not overturn the expansion
The Bank expects a second-quarter rebound after weaker-than-forecast growth early in 2018. Housing activity partly reflects transactions moved into late 2017 ahead of mortgage changes, while transportation bottlenecks have restrained exports. Some of that weakness should unwind, but the Bank does not expect exports to recover all their recent lost ground.
Inflation and wages are showing progress. Core measures are near 2%, and wages are rising even after allowing for provincial minimum-wage increases. Business investment is adding capacity, which gives the economy more room to expand. The Bank projects growth of about 2% in both 2018 and 2019.
Trade uncertainty and competitiveness challenges still restrain exports and investment. The Bank holds while maintaining that higher rates will likely be needed, with the pace guided by capacity and sensitivity to borrowing costs. For a seller, a softer national resale period does not establish the correct price for a Sudbury home. Compare the relevant local alternatives and the financing pressures facing their likely buyers.
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 18, 2018. The national policy decision does not, by itself, establish a change in Greater Sudbury property values.
For context, compare the March 7, 2018 hold at 1.25% 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