Prime Rate Is Now 6%
Bank of Canada Boosts Interest Rates
Last Updated Wed, 24 May 2006 09:39:22 EDT CBC News
The Bank of Canada raised a key interest rate once again by one-quarter of a percentage point to 4.25 per cent, but signalled that its recent string of rate hikes may be at an end.
The increase to the overnight rate what major banks charge each other for overnight loans is the seventh increase since last fall, when the Bank of Canada started edging rates up gently to slow down a red-hot economy and keep inflation in check.
In a commentary accompanying today's rate decision, the Bank of Canada dropped any suggestion that modest further rate hikes may be necessary to keep the economy rolling and inflation in check a phrase that had been common in previous announcements.
Instead, the bank said the overnight rate is now at a level that is expected to keep the Canadian economy healthy and to return inflation to the bank's two per cent target.
The country's major banks responded by boosting their prime rate what they charge their top customers.
In the wake of today's increase, consumers should expect to see higher interest rates for such things as lines of credit and variable rate mortgages.
By The Numbers
- Bond yields are way up and there is anticipation for more rate increases shortly.
- The jobless rate is at a 32 year low.
- The Economy has generated 50,000 jobs. This is double the expected increase which is percieved as inflationary as wage increases are at 3.5% with a tightening labour market. In Alberta, wages are up 7% - the most of all provinces.
- The Dollar is also rising (87.30) on this news, so the bond market is reacting negatively and yields are rising.
- Manufacturing lost another 12,000 jobs. This is offset by the increased jobs in the servicing sector and construction. Ontario and BC lead the employment gains number.
| Last Change | 03-Apr-06 10:02 |
31-Mar-06 10:07 |
30-Mar-06 10:05 |
29-Mar-06 10:04 |
28-Mar-06 10:01 |
|
|---|---|---|---|---|---|---|
| 3-month T-bill | 0.010 | 3.870 | 3.860 | 3.860 | 3.870 | 3.820 |
| 6-month T-bill | 0.030 | 3.990 | 3.960 | 3.960 | 3.970 | 3.920 |
| 1-year T-bill | 0.020 | 4.080 | 4.060 | 4.050 | 4.070 | 4.030 |
| 2-year bond | 0.022 | 4.025 | 4.003 | 3.992 | 4.004 | 3.956 |
| 3-year bond | 0.023 | 4.078 | 4.055 | 4.045 | 4.050 | 4.003 |
| 4-year bond | 0.024 | 4.132 | 4.108 | 4.097 | 4.096 | 4.050 |
| 5-year bond | 0.025 | 4.185 | 4.160 | 4.150 | 4.142 | 4.097 |
| 7-year bond | 0.025 | 4.227 | 4.202 | 4.193 | 4.179 | 4.136 |
| 10-year bond | 0.025 | 4.289 | 4.264 | 4.257 | 4.234 | 4.195 |
| Prime rate | 0.000 | 5.500 | 5.500 | 5.500 | 5.500 | 5.500 |
| CND / USD | 0.007 | 1.174 | 1.167 | 1.161 | 1.173 | 1.170 |
| USD / CND | -.0051 | .8519 | .8570 | .8615 | .8527 | .8545 |
CIBC World Markets Forecasting
At a 2% inflationary rate, the US is not experiencing the inflation that would be expected in past economic cycles involving such increases in commodity prices. Clearly these increases are not being passed to the consumer due to global economic conditions.
With the Canadian dollar over the 90 cent threshold, this puts a significant portion of the Canadian economy at risk. The increase in the value of the Canadian dollar is bound to put the Bank of Canada on the sidelines.
The flatness of the yield curve is a warning sign to both the Fed and Bank of Canada not to experiment in Monetary Policy overkill. Monetary Policy Overkill has led to many a recession in the past.
CIBC World Markets "remain bullish on the outlook for long term interest rates next year", predicting a 46 bp drop in the benchmark 10 year Gov't Bond Yield.
The prediction is for just one more 25 bp increase in the Bank of Canada rate which will lead to a 6.00% Prime rate. The forecast is a drop of 75 bps in Prime by June 2007.
Similar forecasting is done for the Fed funds rate in the US with a 25 bp increase to 5.00% and then a decrease down to 4.50% by June 2007.
Burris Fund Raiser
Wow! On April / 13 I had a chance to go to The Henry Burris Charity Gala.
It was in part with the Big Brothers and Sisters of Calgary charity fund raiser held at the Westin downtown. several of CFL guests, NFL guests and lots of local business supporters alike. With the main goal of raising funds for the charity, the other was creating awareness of the need for all of us to give what we can to the children that need a little TLC. There were all sorts of opportunities to get involved with activities with the guest celebrities. We managed to play foosball with a few, darts and pool. My guests and I had the opportunity to have a photo with Henry and the Grey Cup. Also giving our best efforts at passing the football like a pro?
The auctions, both silent and verbal, were great. Bids on assorted paraphernalia of all types were well received by all who took advantage of autographed jerseys, team balls and photos. I want thank my friends Kurt, Lynn, Dan, Jan, Rob, Nicole and of course my wife Dayna for joining me. Good luck Henry in the up coming season and thank you for making this an experience to remember.
Charity Awarness
I would like to mention to all our readers, that if you are a part of any charity or fund raiser in the future, to please feel free to send me an email with the content. I would be more than happy to promote and get the word out on your event. It is great to be a part of events that will bring good back to those who need it.
Send the email content to yourmortgages@shaw.ca
Grand Opening
The Future of Eating Arrives in Calgary
Growth in market demand for convenient yet high quality meal alternatives has prompted the launch of The Main Dish, Calgary's first lifestyle food market, set to open its doors in the revitalized inner city neighborhood of The Bridges on May 27.
"Look around," says proprietor Jason Zaran. "We have decreasing time to eat, and increasing concerns with what we eat. But we can't subsist on protein bars. Our basic desire for tasty and flavorful food has to be satisfied too. The Main Dish is responding to this dominant trend in food consumption." Despite targeting mid to upper income earners, Zaran and business partner Mike Kadri point to high prices as a pitfall The Main Dish will avoid. "We realize time-strapped, health conscious Calgarians are willing to pay a premium for fantastic meals to go," states Kadri, "but The Main Dish is a high value alternative. We want to see our customers often, not just when they want to splurge."
In addition to quality, convenience and chef-prepared meals, The Main Dish will offer a unique meal experience with many dining options. "We want to wow Calgarians not just with our food, but also with a memorable eating experience. We need to exceed expectations on all sensory levels, and we've hired outgoing, passionate people who thrive in a fun, high performance environment" says Zaran. Food choices will range from freshly made entrees and sides to mix and match, hot cuisine prepared on the spot, premium cuts of meat to cook at home, along with a wide variety of soups, salads, sandwiches, Italian pastries, coffees and select grocery items. While specializing in fresh meals to go, The Main Dish will also provide a comfortable dine-in area.
The Main Dish is located in the Piazza Building in the heart of The Bridges 903 General Avenue, NE. It will be serving health conscious, time-strapped Calgarians seven days a week from 7:00 a.m. to 10:00 p.m. Further information is available at www.tmdish.com.
Contact:
Jason Zaran
403-265-3474
Home Equity Loans
A home equity loan is a type of mortgage where you use the equity in your home as security for a loan. Equity is the difference between the value of your property and the amount you owe on the property. Example:
PROPERTY VALUE - AMOUNT of MORTGAGE = EQUITY
A home equity loan often requires no qualifying as the loan is based strictly on the value of the home and the amount of the equity rather than on the borrowers themselves.
Home equity loans are sometimes structured as second mortgages. This means the loan is registered on the title of the property in the second position behind the existing first mortgage. There can be some advantages to borrowing money in this way; mainly the first mortgage can remain without incurring any penalties or breaking the existing term.
If a home equity loan is structured as a second mortgage you will usually see a higher interest rate. This is due to the increased risk of loss associated with being second payable in the event of a default or foreclosure. Buy it also keeps the second mortgage open to be payable at anytime and no penalties.
For more information, contact me at yourmortgages@shaw.ca
Steve's Rates
| Mortgage Term | Steve's Rates | Bank Rates |
|---|---|---|
| Variable Rate | 3.25% | 5.50% |
| 6 Month Closed | 5.00% | 5.55% |
| 1 Year Closed | 5.70% | 5.75% |
| 2 Year Closed | 5.26% | 5.90% |
| 3 Year Closed | 5.25% | 6.00% |
| 4 Year Closed | 5.29% | 6.15% |
| 5 Year Closed | 5.25% | 6.30% |
| 7 Year Closed | 5.49% | 6.95% |
| 10 Year Closed | 5.62% | 7.40% |
| 15 Year Closed | 5.99% | n/a |
| 18 Year Closed | 6.05% | n/a |
| 25 Year Closed | 6.15% | n/a |
Rates are subject to constant change, for the best rates call 667-9816.
Resources
Business Supporting Business — Thank You:
Insurance
Canyon Insurance covers all your needs, ask for harry Mason
hmason@canyoninsurance.ca
Musician
claytoni@telus.net
Senotrini Spa & Wellness
www.scentorinispa.com
Time Business Machines
wflanagan@timebusiness.com
Two Amigos Moving
www.twoamigos.com
Friends Supporting Friends — Thank You:
Evan William's Group
www.evanwilliamsgroup.com
Otis & Huckleberry
www.otishuck.com
For your Recreational Investments — www.buycanadaproperty.com
WFG SECURITIES OF CANADA
George Negrette
Mutal Fund Representative
P:403-809-7885
E: gnegrette@shaw.ca
A Quote to Note:
"We cannot change who we are
but we can change who we become!"
- The Lion King
Contact
At Prolink Mortgage Inc., I have over 30 lending financial mortgage institutions in Canada. With Steve Faux sourcing the best rates and the best products to suit your needs!
Direct Line — 403.667.9816
Direct Fax — 403.509.1007
Email — steve@yourmortgages.ca
Visit www.yourmortgages.ca for more resources.
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