Bank of Canada Increases Overnight Rate

The Bank of Canada met on July 11 and increased their overnight rate, which lead to lenders increasing their Prime lending rates as well. Don’t panic!  This is normal. Check out the photo above, showing the pattern of the overnight rate going back to 1993.

The overnight rate increased to 1.50%. Just over 10 years ago in 2007, the rate was 4.25% which made Prime rate 6.25% at that time.  With this increase, Prime went from 3.45% to 3.70% for most lenders (TD went from 3.60% to 3.85%).

In reality this is good news because it means the overall economy is growing.  Remember that only variable rate mortgage holders are impacted by increases to the overnight rate and therefore the Prime rate.

If you are a variable rate mortgage holder and have questions or are considering locking in your mortgage, you can call me at 604-786-2788 or Click Here to Schedule a Free Consultation.

The next meeting of the Bank of Canada is September 5th and we will be sure to update you again.