The Bank of Canada has once again decided to leave the key rate unchanged. The central bank keeps this rate, also called the target for the overnight rate, to 1% since September 2010.
Mark Carney said he would like to raise the interest rate soon
In an effort to deter Canadians from getting into more debt. Ultra-low mortgage interest rates artificially inflate long-term affordability and encourage consumers to borrow money. Unfortunately, the debt of Canadian households has reached a record level of 163% of the debt-income ratio . The Bank of Canada has described this situation as a threat to the national economy.
“In Canada, while global turbulence continues to constrain economic activity, internal factors support moderate expansion. Following the recent period of below-potential growth, the economy is expected to recover and return to full capacity by the end of 2013, “the Bank of Canada said in a statement.
The central bank estimates household indebtedness will continue to grow
“The housing market is expected to fall from its historically high level, while the household debt burden is expected to increase further before stabilizing at the end of the period. projection. ” The appraisal report also contains information about the basis on which a given person prepares the valuation and the basis on which it performs it, which sources it uses to describe the property. This is particularly important because the survey contains a detailed description of the property, its physical and legal status, and how it is used.
Lenders use the key interest rate to set their preferential interest rates. For example, if the key interest rate increased by 0.25%, lenders would increase their prime rate. Fortunately for variable rate mortgage holders, the key interest rate remained at 1.00%, leaving their mortgage rates safe and sound. At the moment, the best 5-year variable rate available on Roy Hobbs at a discount of – 0.45% or 2.55% on the key rate.