Bank of Canada Keeps Rate Steady

Bank of Canada Keeps Rate Steady

The Bank of Canada announced this morning that it is holding its key policy rate steady, the fourth time in a row that it has kept the rate unchanged.  This comes despite news yesterday that the Canadian economy expanded by 3.3 percent in the last three months of 2010, a full point more than the Bank of Canada had predicted and ahead of the pace in the US. 

In its statement the Bank indicated the economic recovery in Canada is proceeding “slightly faster than expected, and there is more evidence of the anticipated rebalancing of demand.”

The prime rate at most lenders will stay at 3.00%, which means those with variable-rate mortgages will still enjoy relatively low rates.  A new variable-rate mortgage can often be obtained by qualified borrowers at Prime minus 0.70%, or 2.30%.  Home equity lines of credit and variable-rate credit cards are also commonly linked to the prime rate.