My Mortgage Blog

In case you weren't aware, Prime Rate is based on the Bank of Canada's key lending rate. The Bank of Canada (BoC) does not control Prime. It is the banks that determine Prime based on the rising and falling overnight rate.

Historically, the majority of lenders follow each other with respect to Prime, but they don't have to. In fact, TD has had a higher prime rate for about two years now.

Last month we talked about the fact that low rates weren't going anywhere soon. It looks like we were right as we've seen rates bounce around but remain generally low.

The BoC meets eight times of year to make rate announcements. The announcements include what is going on with the Canadian economy, and what they are planning to do with rates, to support the economy.

Last week was the second last BoC announcement of the year. While they left the key lending rate unchanged (currently 1.75%) last week, the BoC was more cautious about factors contributing to a slowing global economy. This will impact our economy here at home.

So what does this mean for the last announcement of 2019 on December 4? There is speculation of an impending rate cut as early as December, or early in 2020. The latter is currently the odds on favourite if we were taking bets.

According to this article by Canadian Mortgage Trends, "Barring a marked improvement in the global backdrop, we expect Poloz to put on his walking shoes in early 2020."

The combination of low rates and increased sales in Calgary continue to stabilize the market. Here's hoping that trend continues!

The election has come and gone and our national association, Mortgage Professionals Canada, continues to push for changes to the maximum amortization as well as easing and consistency of the stress test. There has not been a lot of uptake on the First-time Home Buyer Incentive, so perhaps the Government might be ready to listen.