Bank of Canada overnight rate unchanged! What does this mean?

As expected, the Bank of Canada left its benchmark overnight rate unchanged at 1.00% and recognized the slack in the Canadian economy. The Bank noted however that it “expects growth in Canada to pick up through 2013, supported by modest growth in household spending combined with a recovery in exports and solid business investment.”


The Bank also recognized the healthier evolution of household credit and expects further moderation in this regard in light of the regulatory changes introduced in 2012.

The message echoes previous BOC announcements, and the reality is that until there is some strong economic improvement in the US economy, interest rates will continue to hover at current levels; lenders may even offer highly competitive pricing to attract more buyers. This is good news for buyers and home owners who wish to pay their debt off faster, but not all mortgage are created equally. Buyers and refinancers must examine all features offered with their mortgage in addition to the competitive rate to ensure that the mortgage meets their short and long term financial needs.


When comparing mortgage products, a good place to start is by understanding your financial needs. For example:

  • What can I truly afford (not qualify for)?

  • What are my payment preferences – flexible, predictable?

  • How long do I anticipate living in this property?

  • Do I want to have access to equity in the future

  • Does my income vary allowing me to pay down my mortgage in a more accelerated fashion at different times in the year

These are some questions that you can explore with your mortgage lender before settling on which mortgage (and interest rate) suits your needs!



About the Author


Farhaneh Haque is the Director of Mortgage Advice with TD Canada Trust, a leader in residential real estate mortgages and home equity lines of credit. With over 18 years of lending experience, she is entrusted with the responsibility of offering mortgage advice to help Canadians make informed decisions about home financing and ownership. 

Farhaneh and her team draw upon research commissioned by TD Canada Trust, which reveals consumer attitudes and behavior related to home ownership such as choosing and buying a first home, renovating and greening a home, as well as understanding gender, regional and other demographic preferences. They also have access to proprietary research from TD Economics on topics such as Canadian interest rate forecasts and Canadian housing market insights 

In her personal time, Farhaneh is an active member of community groups promoting youth education; in particular helping high school students in securing funding to pursue post secondary education.

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About Aaron Joshua Barroso

Marketing at Zoocasa, Brokerage.

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