The Bank of Canada holds at 1.75% on March 6, 2019. The slowdown is broader than expected.
The decision at a glance
| Policy measure | Announcement |
|---|---|
| Overnight target | 1.75% |
| Change | No change |
| Bank Rate | 2.00% |
| Deposit rate | 1.50% |
The slowdown is broader than expected
Canada’s fourth-quarter slowdown reaches beyond the energy sector. Consumer spending, housing, exports and business investment all disappoint, even though employment and labour income remain supportive. The economy grows 1.8% in 2018, and the Bank now expects the first half of 2019 to be weaker than it projected in January.
The international backdrop also deteriorates. Trade uncertainty and fading temporary support are slowing activity across more countries. Other central banks are responding cautiously, which helps financial conditions, but easier markets are not the same thing as a recovery in actual spending. The Bank wants to understand how much of Canada’s weakness will persist.
January inflation is 1.4%, with lower gasoline prices pulling down the headline number; core measures remain near 2%. That gives the Bank room to keep supporting demand. Its statement is less certain about the timing of future increases. A Greater Sudbury household can use the pause to review financing, but should still leave room for a different rate at renewal.
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, March 6, 2019. The national policy decision does not, by itself, establish a change in Greater Sudbury property values.
For context, compare the January 9, 2019 hold at 1.75% 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