The bank of Canada announced today that it will hold their benchmark interest rate at 1% for at least another month. We all know the rate will be going up at some point, but it is good to see that the central bank is taking a measured approach to raising the rate.

The major Canadian Banks tend to look towards this benchmark rate when setting their own variable and fixed rates. What this means for homeowners is that we are still enjoying historically low interest payments on our mortgage debt, and will continue to do so for the immediate future.

One thing that differentiates Canadians from our neighbours to the south is our relatively conservative approach to debt. One observation I've made with home buyers today is that they are happy to take advantage of these rates, but are building in a cushion in their finances in anticipation of the inevitable interest rate rises. Mortgage rules have also tightened a number of time over the past few years to help insulate Canadians from taking on more mortgage than they can handle. This is all good news for the market, as it is an indication that buyers are generally being prudent in their financial decision-making.

Morgan Keating, Realtor