To the surprise of no one, the Bank of Canada held its overnight interest rate.
What does that mean to you and me, the average consumer?
Your bank uses the overnight interest rate as a guide to setting their prime lending ratethe rate for their best customers. When the central bank increases the overnight rate, the banks tend to follow suit. The banks make less money if they don’t.
Variable mortgage rates and other floating loan rates, like your line of credit, move up and down with the prime lending rate. Usually, the banks will set your rate at prime plus or minus some amount.
If you are looking for a fixed rate mortgage, you need to look more at the bond market, which is where the banks look. The bond market is a bit more volatile so those fixed rates can have more frequent changes.
What’s the bottom line?
It means that, for now, the banks will hold tight on their interest rates keeping the cost of borrowing money for your new house in check. Of course, that means when you move in you can buy new furniture and paint the place, keeping the rest of the economy going too.