With the Bank of Canada keeping the overnight rate at 0.25% because of the weaker than expected growth in the July to September period, we have to be aware that the rate might be kept at this for several months longer than anticipated.
TD Bank has noted that with recovery so fragile, the overnight rate will have to be kept until late next year.
This will be several months longer than was said by the central bank in which the bank would wait to help stimulate business activity.
It has also been said that the return to full economic output would not come until 6 months later than was predicted, making the predicated date the April through June period of 2012.
With that all said, we should not be seeing a rate increase till the end of 2010.
With the rate being kept low longer, residential mortgage rates should not be increased by the time predicted before.
If all goes well, and the rate is kept lower for several months longer, we will be seeing increases in residential mortgage at that point.
What can also happen is increases in the coming months as we near the time for the rate to increase, however that happening is doubtful.
Heleen Jacobsen
Broker of Record with InfoMarket Group GMAC Real Estate
www.infomarketgroup.com
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