Today the Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent.
The global economic recovery is proceeding broadly in line with the Bank’s expectation, although risks remain elevated. U.S. activity is solidifying and remains supported by stimulative fiscal and monetary policies. The pace of the European economic recovery is buoyed down by the state of the balance sheets of the Banks and this is a significant source of uncertainty to the global outlook.
Conversely, the pace of economic recovery in Canada is proceeding slightly faster than expected with consumption growth remaining strong, signs that household spending is moving more in line with the growth in household incomes and with business investment continuing to expand rapidly. The BOC mentions that the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance will continue to challenge the export sector of the Canadian economy even though there is early evidence of a recovery in net exports.
The good news is that inflation in Canada has been consistent with the Bank's expectations whilst global inflationary pressures are rising.
Against this backdrop, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada.
The next scheduled date for announcing the overnight rate target is 12 April 2011.
New Mortgage Rules Revisited
If you would still like to get a mortgage amortized over 35 years or be able to refinance up to 90% of the value of your home, your file must be approved by both the mortgage lender and insurer by March 17th, i.e. your purchase or refinance can complete after March 18th, but it must be approved in the lender's system by no later than March 17th.
Example 1: you receive an accepted offer on a property purchase on March 17th but your purchase only completes on Jul7 17th - you will still be able to qualify at the 35 year amortization (up to 120 days later).
Example 2: you want to refinance 90% of the value of your home and your file is approved by the lender on March 17th, but the new mortgage will only fund on May 17th (up to 60 days later).
Should you have any questions related to your mortgage needs, please feel free to contact me.
Jacqueline Baker, AMP
C | 604.724.6982
O | 604.544.2006
F | 604.648.9309
Dominion Lending Centres Total Mortgage and Leasing
1575 Marine Drive West Vancouver BC V7V 1H9