Newest update for Variable Rate Mortgage Fans

So if you are still trying to decide between fixed and Variable rate mortgages here is a positive for those leaning towards the variable rate mortgages.  The Bank of Canada today announced that it’s overnight lending rate  is staying the same.  What that means is that Prime is still at 2.25%.  They say the following reasons are why they have not raised rates:

- “Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures.”

Many economists with re looking at their early statements of supporting Bank of Canada’s statement of them not increasing rates until the second quarter of 2010 because of these reasons:

- “Stronger business and consumer confidence”

- “Increase in household wealth”

- “Higher Commodity prices”

Personally I have seen a huge increase in consumer confidence not only in Real-estate but also people investing in paper assets again.  Although many people have noticed a huge increase in spending here are some comments the Bank of Canada is making on inflation and economic growth.  “Growth is expected to be slightly higher in the second half of this year than previously projected but to average slightly lower over the balance of the projection period. The Canadian economy is projected to grow by 3.0 per cent in 2010 and 3.3 per cent in 2011, after contracting by 2.4 per cent this year. This is a somewhat more modest recovery in Canada than the average of previous economic cycles.”

All in all I feel that Prime’s days of not increasing are numbered.  Australia, the first of 20 countries, has already raised their central bank rates.  Could Canada be number two?  Whatever report you read the ending point is always the same, you as the consumer have to make the best choice for you.  Can you afford your mortgage if rates do jump up?  Are you going to watch carefully enough to be able to lock in your rates if they jump up higher than what is comfortable for you?  If you feel you can ride it out then Variable is a great choice.  If you will lose sleep over it then getting the best fixed mortgage rate is my suggestion for you.