Central bank holds steady on interest rate
Globe and Mail Update
September 5, 2007 at 9:21 AM EDT
Sep 5th, 2007 10:59 am
Sep 5th, 2007 11:09 am
Sep 5th, 2007 11:55 am
Sep 5th, 2007 12:03 pm
Sep 5th, 2007 12:14 pm
Sep 5th, 2007 12:19 pm
Sep 5th, 2007 12:28 pm
About 2-3 months ago they were expected to raise rates another 0.25% this go around. They may be in a holding pattern for the moment but I wouldn't be suprised if they continued to tighten in the 2Q of 08.skanji wrote:does this mean interest rates will be going up in the not to distant future?
Sep 5th, 2007 12:48 pm
Sep 5th, 2007 4:48 pm
...yeah it does. Had their not been turmoil in the credit markets the Bank would have gone up another 25 bps in September. I still think they have one more hike up their sleeve, but they are going to wait it out to see how things in the credit markets develop. If things do start to improve - I think there's a 40% chance of a 25 bps hike come the new year. If things start to deteriorate I think there's a 40% chance the Bank will hold. The risk that they cut is probably only 20% and completely dependent on whether a recession in the US takes the canadian economy down with it.does this mean interest rates will be going up in the not to distant future?
Sep 5th, 2007 6:33 pm
Haha, I give you props on digging that up. My post was in favor of a variable interest rate mortgage because even after a couple more rate hikes it would still be a lower rate than fixing it in at that time.Bullseye wrote: ↑Sep 5th, 2007 12:03 pmApparently you.
'Variable at 5.5% now, 5.75% starting in October (the month after the next rate hike) and 6% in early 2008 still beats paying 6% starting now and for the next 5 years.'
http://www.redflagdeals.com/forums/show ... thalo+rate
Sorry, couldn't resist.
Sep 6th, 2007 9:23 am
Of course, keep in mind that even if the prime rate does creep up next year (say 6.05 after discount), you've still got 4+ years for it to head back down, and come out ahead of locking in at 5.7x...gomyone wrote: ↑Sep 5th, 2007 4:48 pmEither way, for someone who is looking at mortgage rates - I think this suggests that taking a variable mortgage (with a 95 bps discount (at TD this leaves you at 5.30%) is the best move possible. For a VRM holder, the Bank of Canada would have to raise rates by another 50 bps for them to be worst off than if they took out a 5 yr fixed (on average the best you can get with these mortgages is about 5.70%.)
Sep 6th, 2007 3:39 pm
...you're absolute right - the prime rate is closer to its peak right now than its bottom (I'd say its actually about "neutral" in central bank-speak). That means there is a better chance for it going down in the next 4+ years than up (our economy would have to be even stronger than it is right now for the Bank to push rates up more than 25bps - and that isn't likely if Alberta is cooling off, manufacturing in Ontario is hurting and the US is flirting with recession). If you know this story - then you know that a VRM is the way to go right now!13inches wrote: ↑Sep 6th, 2007 9:23 amOf course, keep in mind that even if the prime rate does creep up next year (say 6.05 after discount), you've still got 4+ years for it to head back down, and come out ahead of locking in at 5.7x...
Exactly the situation I'm in, and I'm pretty much ready to pull the trigger on the VR.