Once again, the Bank of Canada has announced that it won't be changing interest rates -- so variable rate holders will continue to see their mortgage rates stay the same, as the overnight rate continues to sit at 1%. The reasons for the Bank's decision include a slightly weaker-than-predicted global economic outlook and a more pronounced Canadian slowdown in the second half of 2012.
From a global perspective, the economic expansion in the US is continuing at a gradual pace but experienced some resistance toward the end of 2012 with uncertainty related to fiscal negotiations. Europe remains in recession, with a more protracted downturn expected. Similarly, while growth in China is improving, the same can't be said for other emerging economies.
On the Canadian front, weaker business investment and exports led to a slower-than-predicted second half. Canadians are also heeding the warnings about high debt levels and starting to restrain household spending. That being said, the Bank still expects economic growth to pick up in 2013.
The above factors are forcing the Bank to stand pat on interest rates -- something many experts believe it will continue to do until at least the end of 2013, potentially the beginning of 2014. This era of low interest rates won't last forever, though, so if you're not taking advantage of it now -- by increasing your mortgage payments and paying off debt -- you should definitely do so!