The Bank of Canada holds at 1.75% on July 10, 2019. A stronger quarter does not settle the outlook.
The decision at a glance
| Policy measure | Announcement |
|---|---|
| Overnight target | 1.75% |
| Change | No change |
| Bank Rate | 2.00% |
| Deposit rate | 1.50% |
A stronger quarter does not settle the outlook
Canada’s second quarter looks stronger than the Bank expected, helped by increased oil production and the reversal of earlier weather-related weakness. Employment supports consumption, and lower longer-term mortgage rates are helping housing stabilize. The Bank raises its 2019 growth forecast slightly to 1.3%, with growth of about 2% expected in 2020 and 2021.
The improvement is not entirely durable. Some export strength is a rebound from temporary disruptions, while the U.S.–China trade conflict is weighing on global manufacturing and investment. The Bank expects world growth of 3% this year, followed by roughly 3.25% in the next two years. Further trade escalation remains the largest risk to that outlook.
Inflation is around 2%, including the core measures. Gasoline prices could temporarily pull it lower before it returns to target around the middle of 2020. The Bank holds because Canada is returning toward its productive capacity, but uncertainty remains substantial. Lower fixed mortgage offers can coexist with an unchanged policy rate because bond markets price that uncertainty separately.
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, July 10, 2019. The national policy decision does not, by itself, establish a change in Greater Sudbury property values.
For context, compare the May 29, 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