As per Emily Mathieu’s business report in today’s Star, the debate continues as to whether The Bank of Canada will opt to increase the key bank rate at the next meeting.
Will we see a .25% – .50% increase come June 1st or July 20th? This shouldn’t concern potential variable mortgage clients closing after June 1st as an increase in prime may be offset by an increase in variable rate discount offerings.
What does that mean to you? Today’s 2.25% prime rate less the current .50% discount nets a variable rate of 1.75%. If the bank rate rises to 2.50% and the discount improves to .75%, you would still net 1.75%. In any event, any limit to a rate hike is good news and with rates as low as they are, it’s all good!