Governor of the Bank of Canada Stephen Poloz has provided concrete numbers on how much Canadians have saved by renewing mortgages in the wake of January’s rate cut.
“Bank staff estimate that a household that has renewed a $100,000 mortgage would save about $250 in interest payments this year,” Poloz said during a speech at the Greater Charlottetown Area Chamber of Commerce Tuesday. “That’s on top of the roughly $500 that the average household will save in gasoline costs.”
It’s useful information for brokers who will likely count on renewal business for the remainder of the year, with rates expected to remain low.
In a speech, titled “The Way Home: Reading the Economic Signs,” Poloz addressed the state of the economy and how the Bank of Canada plans to rebuild it.
Currently, the forecast is that the first quarter of the year will experience no growth. However, a rebound is expected next year.
“Our view, as we set out in last month’s Monetary Policy Report
, is that growth will rebound partially in the second quarter,” Poloz said. “While there’s still a risk that lower oil prices could have a greater impact, the signs we have seen to date lead us to believe that the impact of the shock is proving to be faster than we first expected, but not larger.”
However, he did note how uncertain the outlook is.
“In recent weeks, both oil prices and the Canadian dollar have moved higher,” he said. “We will need to carefully consider these and other economic and financial developments and how Canadian companies and households are likely to react in the months ahead.”