While many economists were forecasting a cut in interest rates, the Bank of Canada announced it will maintain its target for the overnight rate of ½%. They acknowledged that commodities and oil prices continue to take a hit and negatively impact the economy. Since the last Governor meeting early December, the price of oil has declined from $40 US a barrel to below $30! This is a concern since the weakness in the energy sector could spread to other areas of the Canadian economy.

The chief economist of CIBC World Markets was proven correct when saying; “Even if the Bank of Canada doesn’t actually cut the Bank of Canada rate, they will certainly use language to convey a much higher likelihood of a rate cut ahead”. Any lowering of the Bank of Canada rate over the next several months could also lower your mortgage payments if you currently have a variable rate mortgage. Even the rates for fixed mortgages that have quietly been moved up by some major banks could see a reversal which creates opportunities.

As a mortgage professional, one of my responsibilities is to understand what is happening in the economy and see how it could benefit you. With interest rates low and the Canadian economy going through a transitional phase, now could be a great opportunity to have a look at your mortgage or home buying options. It’s also an ideal time for homeowners with equity to get rid of any of those high interest credit card payments that have built up over the last several months.