Bank of Canada met. Mortgage Prime rate remains at 6.70%.

Yesterday, the Bank of Canada (BoC) announced that it will keep its benchmark interest rate the same, making it the second consecutive month that it has not changed. This is part of a cautious shift away from the Bank's previous approach (over the past year) of raising interest rates.

The trendsetting interest rate, which heavily impacts variable mortgage and Line of Credit rates in Canada, will remain at its current level of 4.50%, meaning that the Prime Rate for almost all mortgage lenders remains at 6.70%. This indicates that the Bank thinks it has already taken significant steps to control inflation and slow down the economy.

Many economists predicted that the Bank would maintain its policy rate, and expect it to remain unchanged for the rest of the year. Some economics believe that the Bank may even consider decreasing the interest rate by the end of 2023, but the BoC did not indicate this was likely.  As the economy is not slowing down significantly (given recent employment figures), the bank’s latitude for reducing rates is restricted.

The BoC meets again 7th June.