MonsterMortgage.ca Mortgage Expert Mike Dias addresses the latest Bank of Canada announcement that occurred on July 17th, 2013.
Mike talks about some of the reasons why the Bank of Canada decided to keep their Overnight Lending Rate unchanged and what this might mean for home-owners in Canada.
The Bank of Canada’s Overnight Lending Rate is the rate in which banks and other mortgage lenders base their variable rate mortgage products. You might hear such rates as ‘Prime minus 0.50%’ or ‘Prime plus 1%’; that ‘Prime Rate’ is based on the previously mentioned Overnight Lending Rate. So, as the Bank of Canada’s Overnight Lending Rate increases, the Prime Rate offered by lenders also increases and vice versa. As a result, it is in the interest of home-owners with variable rate mortgage products to be well informed of the Bank of Canada’s decisions.