Thinking of locking in a mortgage rate while you search for a home? Good news: looks like you've got a few months... or weeks?

Thinking of locking in a mortgage rate while you search for a home? Good news: looks like you've got a few months... or weeks?

The Bank of Canada maintains overnight rate target at 1/4 per cent and reiterates *conditional commitment to hold current policy rate until the end of the second quarter of 2010.

*Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target.

The next scheduled date for announcing the overnight rate target is March 2nd, 2010. So if you're thinking of taking the first step in the purchase of a home, speaking with a lender about mortgage pre-approval (and locking in a mortgage interest rate for 90 or 120 days), the good news is that it looks like you've timed it right!

If you're considering listing your home in February/March to benefit from the hot spring market, then good news for you too, as (a) you're likely purchasing somewhere else, and will need a mortgage, and (b) you'll have motivated buyers who want to take advantage of the continued low cost of borrowing.

News to consider:

• Economic growth in Canada resumed in the third quarter of 2009 and is expected to have picked up further in the fourth quarter.
• The Bank projects that the economy will grow by 2.9 per cent in 2010 and 3.5 per cent in 2011, after contracting by 2.5 per cent in 2009.
• The private sector should become the sole driver of domestic demand growth in 2011.

Highlights from the Bank's outlook for the economy and inflation:

• the outlook for global growth is somewhat stronger than in October,
• recovery is also under way in Canada, but considerable excess supply remains,
• the Canadian economy is expected to return to full capacity in Q3 2011.

The Bank's outlook, including risks to the projection, is published in the Monetary Policy Report, released yesterday; click here for the 4-page summary: http://www.bankofcanada.ca/en/mpr/pdf/2010/mprsumjan10.pdf.

Source: Bank of Canada Press Release January 19th, 2010. For full details, click here: http://www.bankofcanada.ca/en/fixed-dates/2010/rate_190110.html

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