The Bank of Canada rate did not change today, Prime rate to remain at 2.70%.
While the Bank of Canada is holding rates steady, the last few weeks has been a different story for fixed rates increasing slightly (.10 – .20%). The fixed rates follow the bond market (this is where fixed rate mortgages are sold in the financial market) which has moved up slightly. This chart illustrates how 5 year bond yields fluctuate from day to day.
The bond yield is used to determine fixed rate mortgages and with this much fluctuation we tend to see fixed rates change more frequently.
Back to the Prime rate, the Bank of Canada has cited weakness in the resource sector along with inflation on target as a couple of reasons for holding the rate. Some experts are now calling for rate increases in 2017 in Canada and predictions abound that rate increases will be small and gradual.
The US Federal Reserve is expected to start increasing US rates this month. While this could have some impact on our dollar, there is no expectation that this will have an impact on Canadian interest rates given the position of our economy at this point.
Here is the formal announcement from the Bank of Canada.