The window for Canadians considering refinancing their home mortgage may have widened, as Bloomberg News reports that money markets are dismissing the view that the Bank of Canada will raise its key overnight lending rate for a fourth straight time when it meets on October 19.
Bloomberg reports that the “probabilities of a quarter percentage-point increase at the Oct. 19 central bank meeting stood at 18% [on September 30], down from 20% [the previous day] and 40% two weeks [earlier],” according to data released by the Bank of Nova Scotia. Meanwhile, the Bank of Montreal is reported to have “pegged the odds of an October rise at 10% to 20%.” Both BMO and Scotiabank forecast a “less than even chance for [a rate] increase in December.”
Speculation is that Bank of Canada Governor, Mark Carney, has been given room to pause in his regimen of rate hikes by data from Statistics Canada numbers that indicate the Canadian economy shrank 0.1 percent in July, hobbled by a faltering U.S. economy.
Fixed-rate mortgages are still available with attractive mortgage rates. Homeowners who are concerned about a long-term trend towards rising home mortgage rates may consider refinancing their existing mortgages this fall to take advantage of the probable pause in the Bank of Canada’s move towards higher rates.
