As expected, on December 4, 2013
, the BANK OF CANADA
announced that it was maintaining its target for the overnight rate at one per cent. The Bank Rate is correspondingly one and a quarter per cent and the deposit rate are three quarters of a per cent.
Underlying growth in Canada is broadly in line with the Bank’s projections in its October and July Monetary Policy Reports. Real GDP growth in the third quarter, at 2.7 per cent, was stronger than the Bank was projecting, but its composition does not yet indicate a rebalancing towards exports and investment. The housing sector has been stronger than expected but is consistent with updated demographic data and a pulling forward of home purchases in light of favourable financing conditions. The Bank continues to expect a soft landing in the housing market. Non-commodity exports continue to disappoint and the price of oil produced in Canada has eased further. Business investment spending is up from previous low levels, but is still recovering more slowly than anticipated. On balance, the Bank sees no reason to adjust its expectation of a gradual return to full production capacity around the end of 2015.
The financial institutions will also keep their Prime Lending rate at 3%. Fixed rates and variable rates remain steady around 3.59-3.69% for a 5 year fixed term and discounted variable rates at Prime -.40%.
The next Bank of Canada Rate Announcement will be on, January 22, 2014.
To discuss your personal situation, contact one of our Mortgage Agents
Toronto home sales, prices jump to double-digit gains in NovemberDecember 4, 2013
Toronto home sales rose 13.9% to 6,391 units in November from the same month the year before, the Toronto Real Estate Board said in an e-mail.
The average price of homes sold during the month rose 11.3% to $538,881, it said.
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Ottawa to introduce ‘risk fee’ on CMHC insuranceNovember 29, 2013
Canada will impose a “risk fee” starting Jan. 1 on mortgage insurance provided by the country’s housing agency to compensate taxpayers for potential losses in the housing market.
Canada Mortgage & Housing Corp. said the fee to the government will be “3.25% of premiums written and 10 basis points on new portfolio insurance written,” according to a financial report today for the three months ended Sept. 30.
“We certainly don’t expect it to have any impact on the availability or cost of mortgage funding,” CMHC chief financial officer Brian Naish said on a conference call with reporters today. “We don’t see it as a material event.”
The fee is the latest attempt by Finance Minister Jim Flaherty to rein in the agency amid concerns the nation’s housing market may be overvalued. The government-owned agency insures mortgages against default, and its insurance is fully backed by the federal government. By law, Canadian mortgages that have less than a 20% downpayment must be insured.
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