Variable Rate May No Longer Win

Over the past 50 years consumers have saved money by choosing a variable rate mortgage, as long as they hold onto that variable rate over their term. Variable rate is still a lower option, but with the pending increase in the prime rate of another 1/4% in September and fixed rates close to historic lows, more Canadians may be favoring the fixed rates.

Fixed or variable, this seems to always be the question. One answer is if you are currently in a variable rate mortgage and are comfortable with your financial situation and don't need to fix your mortgage payments, you may want to ride it out. Click here to see the complete article form the Financial Post

Bank of Canada Raises rate by .25%

The bank of Canada announced today that it is again raising the overnight rate by 1/4% today (bringing the bank prime rate to 2.75%). This rate increase was expected by most annalists and the major banks. The overall Canadian economic recovery pace has slowed down slightly from what was originally expected.

The Bank expects the economic recovery in Canada to be more gradual than it had projected
Inflation in Canada has been broadly in line with the Bank's April projection. While the Bank now expects the economy to return to full capacity at the end of 2011, two quarters later than had been anticipated in April, the underlying dynamics for inflation are little changed. Both total CPI and core inflation are expected to remain near 2 per cent throughout the projection period, which should keep the interest hikes at a manageable level.