Some good news for those looking to qualify for a mortgage: rates will remain at their record lows for the foreseeable future, as the Bank of Canada (BoC) announced it will leave its trend-setting interest rate untouched at 0.25% in today’s announcement.
The rate has been kept this level as of March 27, 2020, when the BoC slashed it in response to the initial impact COVID-19 had on the economy; keeping it at this record low is one of the methods the central bank uses to protect the economy and encourage spending during a downturn, as was experienced during the first pandemic lockdown. The BoC also announced it will continue to buy back government bonds, effectively pumping $3 billion into the economy on a weekly basis.
What Does This Mean for My Mortgage?
The BoC’s rate – also referred to as the Overnight Lending Rate – is a benchmark used by Canada’s consumer lenders (RBC, BMO and the like) to set their variable borrowing rates, such as mortgages and lines of credit. The banks will increase, hold, and decrease their own rates in tandem with the BoC, which announces its rate policy direction in eight pre-scheduled announcements throughout the year.
Read the full article here: https://www.zoocasa.com/blog/bank-of-canda-june-2021-announcement/