Bank of Canada Announcement - October 30 2019

Here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. 

At 10:00 am EST, Wednesday October 30, 2019, the Bank of Canada maintained their overnight rate which in essence means no change to your interest rate. 

After the most recent election you will want to pay note to the changes that the Liberals proposed during the election.

  • The First Time Home Buyer's Incentive is here to stay. We should expect maybe some changes and adjustments to the program, but it is here to stay which is great news for those looking to have the lowest possible mortgage payment.
  • They also promised to create a national tax on vacant residential properties owned by non-Canadians who don’t live in Canada. What is unclear right now is the definition of 'vacancy' that this government will use. A dwelling that is never occupied, or a furnished second home that is vacant more than 6-months. Only time will tell us what this campaign promise means. 
  • They also promised to crack down on fraud and financial crimes in the real estate sector. What does this likely mean for you? As we are already seeing with lenders and banks, more paperwork from clients is required and a larger due diligence to insure all the i's are dotted and t's are crossed. Don't worry that's what I am here for! 

Now of course, with the fact that we are now in a minority government, we will have to wait and see what passes through the House of Commons. I will always do my best to keep you informed of any changes that will affect your current mortgage products. 
All things considered, the Bank will continue to monitor the extent to which the global outlook as well as pay close attention to the expected slowdown in the Canadian economy and the impact that has on consumer spending and housing activity.  Increases in the banks rate are definitely not on the short-term horizon for sure but instead a hint to possible downward adjustments if needed.
Fixed rates have dipped just slightly since the last announcement and are around 2.79% to 3.09% for a five-year fixed term.
Based on the anticipation that the prime rate will still remain low BUT fixed term rates have increased slightly, I’d recommend that we chat – it might be worth switching to a fixed term if your current variable rate mortgage is higher than a fixed term.  Call me so I can calculate what your new payment would look like and also if it is suitable for you. 

As we heard a lot of in the election, Canadians are suffering with billions of dollars of consumer debt  If you hear a friend or family member talk about going through a financially tough time – maybe I can help with some budgeting, credit counselling and debt consolidation options for them!
I’ll be in touch again for the next announcement on December 4, 2019.

Lisa Upshaw


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