The Bank of Canada leaves interest rates unchanged

The Bank of Canada left its key lending rate unchanged at 5.00% this morning, marking the Bank’s sixth straight rate hold.

The decision was widely expected, though economists believe the Bank is likely to begin cutting rates in the coming months in response to a slowing economy.

In its statement, the Bank said “While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months. The Council will be looking for evidence that this downward momentum is sustained.”

The Bank expects inflation to remain around 3% for the first half of this year before falling below 2.50% in the second half and reaching its neutral target of 2% in 2025.

Click here to read the Bank of Canada’s full statement.

Click here to see the Bank of Canada’s latest economic forecasts in its Monetary Policy Report.

What this means for your mortgage

• Variable-rate mortgages: There will be no change to your rate with the prime rate holding at 7.20% at most major lenders (excluding TD, which has a mortgage prime rate of 7.35%).
• Fixed-rate mortgages: Your mortgage term remains unaffected by this announcement.
  

Looking forward

We're closely monitoring incoming economic data and how it may impact the timing of anticipated rate cuts later this year. The Bank’s next rate decision is scheduled for June 5.

Should you have questions or wish to discuss adjustments to your mortgage strategy in light of these developments, please don't hesitate to reach out.