What to expect in 2019 for interest rates in Canada

21 January 2019
Life and the City


Despite the recent decrease in fixed rates from some of the larger banks, the Bank of Canada is expecting another 2 increases to the key lending rate for 2019. The increase will be in an attempt to neutralize and keep inflation in check but will be a gradual process.

Growth for the Canadian economy was downgraded in the Bank of Canada’s report from the 2.1% forecast for 2019 it released in October, to 1.7%. The three things that are key for future rate decisions are consumer spending, the oil market, and the housing market.

Consumer spending and housing investments have not been as strong as expected as the housing market are adjusting to changes in lending practices and higher interest rates. The bright spots will be non-energy investment and exports looking solid; and most of the economy operating close to capacity. The Conference Board of Canada says that if economic growth hits expectations, there could be two interest rate hikes this year.

The bottom line is that rate will remain low and below the neutral range into the foreseeable future.


Article by Alain Lavoie, Mortgage Broker with Capitol Home Lending

Questions? You can contact Alain directly at 416.419.0359 or via email at alain@capitalhomelending.ca, or fill out the form below and we'll get back to you.

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