One of my colleagues in the Mortgage Industry, Aleem Peermohamed, shared some great information with me today. I'm blogging it for the benefit of everyone in the industry. His full contact information is below.
As widely anticipated, the Bank of Canada announced that it is maintaining its target for the overnight rate at 1%, and leaving prime @ 3.00%. Reports from sources inside the Bank of Canada confirm what forecasters have been saying since last week (indicated in my previous email to you), that the Bank does not plan on shifting prime until at least summer of 2011. This is good news for all of your clients who are currently in variable rate mortgage products, as well as for those of your prospects considering the variable option.
Something that I thought I would share with you, especially with the rates and payments still being relatively low. By taking advantage of some of the pre-payment options on their mortgage, your can shave years off your mortgage and become debt free that much sooner. As an example, by simply increasing their mortgage payments by 10 dollars a week, one of my existing clients was able to save what amounted to $30,000 in interest costs, and are on pace to become mortgage free FOUR years sooner. Feel free to pass this information on to clients that you think may benefit from this. I would be happy to see if I can do the same for them.
Below is the press of the details from this morning's meeting, as well as the link. As always feel free to call me with any questions or concerns, and please do pass this on to anyone you feel would find this information valuable.
The Mortgage Specialist
Mortgage Centre-City Wide
Ph.778 233 2377
Fx. 888-280-8129
email. aleem@themortgagespecialist.com
web. www.themortgagespecialist.com
follow me on www.twitter.com/TheMtgSpeclist
Bank of Canada maintains overnight rate target at 1 per cent
OTTAWA - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
The global economic recovery is proceeding largely as expected, although risks have increased.
As anticipated, private domestic demand in the United States is picking up slowly, while growth in emerging-market economies has begun to ease to a more sustainable, but still robust, pace. In Europe, recent data have been consistent with a modest recovery. At the same time, there is an increased risk that sovereign debt concerns in several countries could trigger renewed strains in global financial markets.
The recovery in Canada is proceeding at a moderate pace, although economic activity in the second half of 2010 appears slightly weaker than the Bank projected in its October Monetary Policy Report. In the third quarter, household spending was stronger than the Bank had anticipated and growth in business investment was robust. However, net exports were weaker than projected and continued to exert a significant drag on growth. This underlines a previously identified risk that a combination of disappointing productivity performance and persistent strength in the Canadian dollar could dampen the expected recovery of net exports.
Inflation dynamics in Canada have been broadly in line with the Bank's expectations and the underlying pressures affecting prices remain largely unchanged.
Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the
2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.
Information note:
The next scheduled date for announcing the overnight rate target is 18 January 2011. A full update of the Bank's outlook for the economy and inflation, including risks to the projection, will be published in the Monetary Policy Report on 19 January 2011.
This press release is now available on the Bank of Canada's website at:
http://www.bankofcanada.ca/en/fixed-dates/2010/rate_071210.html
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