The last two scheduled interest rate announcements by the Bank of Canada both reflected an increase to the overnight rate, which in turn has a direct impact on prime rate.  It has been widely predicted that there will be one more rate increase before the end of the year, which could have come as soon as today.  In this mornings scheduled announcement, the overnight rate will however remain unchanged, much to the relief of anyone with a variable rate mortgage or a Home Equity Line Of Credit. The announcement came at 10am this morning, October 25th, 2017.

Back in 2010, we saw three rate hikes in a row, which is not something that will be repeating in 2017.  These three rate hikes were the last increases we would see until the middle of 2017… almost 7 full years later.  As mentioned, it’s still expected that there could be another increase, however we’ll have to wait and see what happens.

The prime rate remains at 3.20%

These interest rate announcements typically only affect variable rate mortgages, however they can have an indirect influence on fixed rates as well.  Fixed rates are primarily determined by bond yields, which a rate announcement can have an impact on, which would then in turn have an impact on fixed rates.  The bond yields have been fairly stable since mid-September.  This mornings announcement could very likely start pushing them downwards, which could lead to lower fixed rates.

You can follow the bond yields here: https://www.investing.com/rates-bonds/canada-5-year-bond-yield

The lowest 5 year fixed rates are at 2.89% as of today.  There is also a great 3 year fixed at 2.69%.

The last two increases to prime rate have not had that big of an impact on new variable rate mortgages as we have now seen discounts  fall to as low as prime -1.15%, which is 2.05%.  This is the largest discount we have seen on variable rates mortgages is over 10 years.  As with most of the lower rates these days, this is for high ratio purchases or switches only.  Meaning, purchases with LESS than 20% down payment or switches where your original purchase was made with less than 20% down.

You can follow the bond yields yourself here:
https://www.bankofcanada.ca/2017/10/fad-press-release-2017-10-25/

The next interest rate announcement will be on December 6th, which will be the last announcement of the year.