July 2020 Bank of Canada Interest Rate Decision

July 15, 2020
bank of canada

The Bank of Canada keeps overnight interest rate unchanged at 0.25%. The retail prime rate will stay at 2.45%. For the latest rates, check out our rates page here.

Some other points from the Bank of Canada announcement today:

  • The early signs of a bounce-back in the Canadian economy are due to pent-up demand.  The Bank of Canada expects the recovery to slow later this year and into 2021.
  • The Bank of Canada continues to express that they are committed to keeping the prime rate low to support the Canadian economy. Many observers feel that the current policy rate of 0.25% will stay in place for years to come.



If you’re unable to watch the video these are the key points:

  • 0:16 – No change to the prime rate. Expect that to be a common theme going forward.
  • 0:48 – The Bank of Canada talks about a possible second wave and the impact on the market
  • 1:05 – The quick rebound in the economy is driven by pent up demand in the market. This is expected to slow down and not fully recover until late 2021

The bank of Canada holds overnight rate unchanged.

Get used to this headline going forward, “No change to the prime rate”

In this morning’s BoC rate announcement and economic outlook highlights the challenges ahead. Uncertainty and unpredictability were words used by the central bank. They confirmed to the market that they are committed to keeping the policy rate low for as long as necessary to help the economy grow. You can read the Bank of Canada’s full press release here.

What does today’s decision mean to you?

With the prime rate likely remaining at 2.45% for years to come there are no recommended actions.

If you are in a variable rate mortgage and have seen your payments drop over the past few months I do recommend that you consider taking advantage of your pre-payment privilege. Contact your lender to increase your regular payments. The increase to your payment will go entirely to reducing the principal balance saving you both time and interest on the mortgage. 

What about fixed mortgage rates?

After a turbulent few months early on during the pandemic, fixed-rate mortgages have finally settled. Many lenders are offering 5 year fixed rates between 2.09% (insured) and 2.34% (uninsured).  

We don’t see further movement to fixed rates either in the coming months as they’ve reached their lower bound. 

A reminder, if your mortgage interest rate currently starts with a 3.xx% get in touch to discuss the possibility of refinancing to a lower rate.

For more information about mortgage financing and to discuss any specific requests please book a call directly into my calendar here below.


Christopher Molder

Mortgage Broker

Christopher is a mortgage broker based in Toronto, Canada. And a son of a broker too.He’s a second generation mortgage broker.Following in his father’s steps he joined the family mortgage business straight out of university.

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