Greg Thornton & Colin Thornton        

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The Bank of Canada announcement caught the global markets totally off guard yesterday.  The surprise, so far, is that none of the major banks or our mortgage lenders have lowered their trending setting rate from the 3% level. Meaning that variable rate mortgages have not dropped yet. We do expect this will play itself out over the next week or so.

The 2nd article from CBC news speaks directly to this issue. This is a major change from historical patterns and certainly will be generating a huge amount of front page news as this unfolds.  Bond rates continue to tumble due to the global uncertainty, with oil being one of the main reasons. They are now at the lowest we have seen in recent history!

5 year fixed rates are poised to drop 5-15 basis points, but so far, we have only seen some marginal drops by a few lenders. 2.84-2.99% are quite common now

Bank of Canada lowers overnight rate target to 3/4 per cent

Ottawa, Ontario - 21 January 2015

 
The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent. This decision is in response to the recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada.

Inflation has remained close to the 2 per cent target in recent quarters. Core inflation has been temporarily boosted by sector-specific factors and the pass-through effects of the lower Canadian dollar, which are offsetting disinflationary pressures from slack in the economy and competition in the retail sector. Total CPI inflation is starting to reflect the fall in oil prices. Click for more: http://www.bankofcanada.ca/2015/01/fad-press-release-2015-01-21/

Bank of Canada interest rate cut: At least 1 bank won't lend for less

By Solomon Israel, CBC News Posted: Jan 22, 2015 1:29 PM ET

 
Overnight rate cut by Bank of Canada usually matched by decrease in prime lending rate. Canadians have been left wondering whether they'll enjoy lower rates on mortgages and other loans in the aftermath of a surprise interest rate cut by the Bank of Canada on Wednesday,  Canada's five biggest banks are deciding whether to cut their prime lending rate, which affects the interest on some mortgages, lines of credit and other financial products

Click for full article: http://www.cbc.ca/news/business/bank-of-canada-interest-rate-cut-at-least-1-bank-won-t-lend-for-less-1.2927894

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