The Bank of Canada holds at 0.75% on March 4, 2015. January's insurance cut is working through the economy.
The decision at a glance
| Policy measure | Announcement |
|---|---|
| Overnight target | 0.75% |
| Change | No change |
| Bank Rate | 1.00% |
| Deposit rate | 0.50% |
January's insurance cut is working through the economy
The Bank holds after January's reduction because financing conditions have already eased materially. Bond yields, the Canadian dollar and other asset prices have adjusted. That support should help exporters and investment outside the energy sector, although it takes time to reach spending and hiring.
The oil shock remains the central risk. Its early effect is more visible in Canadian income than in total demand, and the Bank still expects most of the damage during the first half of 2015. At the same time, the 2014 record shows that non-energy exports and investment are improving. The decision balances that emerging strength against the loss in resource income.
Headline inflation is falling with oil prices, while core inflation remains near 2%, partly lifted by a weaker dollar. The Bank judges the inflation risks more balanced than in January. A hold therefore does not mean the oil adjustment is finished; it means the existing support appears sufficient for now. Buyers should confirm actual lender terms instead of expecting another automatic rate reduction.
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.
The Bank’s weekly lender series around this announcement provides the following posted reference rates. These are typical posted rates at six major chartered banks, not discounted offers or an assurance of the rate a borrower can obtain. They should not be read as proof that a lender has already passed through today’s decision.
| Posted reference | Rate |
|---|---|
| Prime | 2.85% |
| One-year conventional mortgage | 2.89% |
| Three-year conventional mortgage | 3.39% |
| Five-year conventional mortgage | 4.74% |
Payment illustration: a $300,000 mortgage amortized over 25 years at the 4.74% posted five-year rate is approximately $1,701 per month for principal and interest, using Canadian semi-annual compounding. This is an illustration, not a lender quote. Taxes, insurance, utilities, closing costs and qualification requirements are separate.
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 4, 2015. The national policy decision does not, by itself, establish a change in Greater Sudbury property values.
For a local plan, explore the Buyer Experience or Seller Experience. You can also browse the Bank of Canada Decisions & Mortgage Rate Context Archive.
Expect Moore for Your Real Estate.
— Chad Moore, REALTOR®
— Lake City Realty Ltd., Brokerage
