November 2005 Mortgage Newsletter
Greetings to all and a warm Welcome to New Subscribers.
Inflation registers sharp drop in September, could slow rate hikes
OTTAWA (The Canadian Press, 2005) ― The annual inflation rate tumbled in October as the price of gasoline backed off from record highs caused by the impact of hurricanes on Gulf of Mexico oil production, Statistics Canada reported Tuesday.
The consumer price index rose 2.6 per cent on a year-to-year basis, down sharply from the 3.4 per cent reading in September. That was much better than the three per cent rise that economists had expected.
But analysts said inflation is still enough of a problem that the Bank of Canada will likely continue to raise interest rates, although the pace is likely to slow.
“The headline result is well below what most expected and will take some of the pressure off the Bank of Canada to be even more aggressive (in raising interest rates),” said Doug Porter, BMO Nesbitt Burns’s deputy chief economist.
“We still would look for the bank to continue grinding rates higher in the months ahead, but there is a bit less urgency now.”
The core interest rate, which excludes a variety of volatile items including energy and food, was also tame, coming in at 1.7 per cent — the same as September and below the 1.8 per cent that was widely expected.
Gasoline prices were up 17 per cent in October from a year earlier. But that’s a big improvement from September levels, when gasoline prices were almost 35 per cent above a year earlier.
Even though gasoline prices stayed high during October, they have not had a major impact on consumer prices in general, Statistics Canada said.
“We haven’t seen the effect of those higher energy prices trickling through to core consumer prices, which the Bank of Canada looks at because it strips out the effect of the eight most volatile components,” said CIBC economist Leslie Preston.
The Bank of Canada resumed raising interest rates earlier this year and last upped them a quarter-point Oct. 20, sending the key overnight rate to three per cent.
But higher energy prices aren’t the only component forcing the central bank’s hand.
The bank said last month that the hike was needed because the economy is operating at full capacity and is widely expected to boost rates by another quarter-point Dec. 5.
Although falling gasoline prices were the main reason for lower inflation, “special factors in the month included a steep drop in clothing prices, down one per cent from September in seasonally adjusted terms.” Porter observed.
He also pointed out there was a smaller-than-expected rise in property taxes.
“This is the one month of the year that property tax hikes are recorded, and the annual increase this year was a moderate 3.2 per cent. Finally, Alberta accelerated its rebate program on natural gas to the start of October, helping keep a lid on other energy prices.”
Saskatchewan had the lowest annual inflation rate in the country, at 1.9 per cent. Newfoundland and Labrador was next at 2.1 per cent.
Prince Edward Island had the highest rate among the provinces, at 4.6 per cent, while Alberta and Nova Scotia came in at 3.5 per cent.
Here’s what happened in the provinces and territories. (Previous month in brackets.)
- Newfoundland 2.1 (3.8)
- Prince Edward Island 4.6 (5.1)
- Nova Scotia 3.5 (4.3)
- New Brunswick 2.7 (3.8)
- Quebec 2.3 (3.6)
- Ontario 2.5 (3.3)
- Manitoba 2.8 (3.5)
- Saskatchewan 1.9 (3.0)
- Alberta 3.5 (3.5)
- British Columbia 2.3 (2.4)
- Whitehorse, Yukon 3.1 (3.3)
- Yellowknife, N.W.T. 3.6 (3.2)
- Iqaluit, Nunavut 2.1 (2.2)
The agency also released rates for major cities but cautioned that figures may fluctuate widely because they are based on small statistical samples. (Previous month in brackets.)
- St. John’s, N.L., 2.0 (3.7)
- Charlottetown-Summerside, 4.1 (4.6)
- Halifax, 3.0 (3.8)
- Saint John, N.B. 2.8 (3.9)
- Quebec, 2.3 (3.5)
- Montreal, 2.1 (3.4)
- Ottawa, 2.6 (3.5)
- Toronto, 2.3 (2.7)
- Thunder Bay, Ont., 1.9 (2.7)
- Winnipeg, 2.7 (3.5)
- Regina, 1.8 (2.8)
- Saskatoon, 1.9 (3.0)
- Edmonton, 3.5 (3.4)
- Calgary, 3.3 (3.4)
- Vancouver, 1.9 (2.1)
- Victoria, 2.5 (2.6)
(November 29, 2005)
Today’s ProLink Interest Rates on First Mortgages are as follows:
Rates are subject to change without notice.
| Description | ProLink Rate |
|---|---|
| 5 Year Variable | 1.74% |
| 6 Month Closed | 4.65% |
| 1 Year Closed | 4.45% |
| 2 Year Closed | 4.55% |
| 3 Year Closed | 4.75% |
| 4 Year Closed | 4.85% |
| 5 Year Closed | 4.95% |
| 7 Year Closed | 5.10% |
| 10 Year Closed | 5.50% |
| 15 Year Closed | 5.70% |
| 25 Year Closed | 5.90% |
| Prime (adjustable rate mortgage) | 4.75% |
I trust this information will come in handy and help you to stay informed.
I will continue to update you on the Market and where things are going.
One Small Saving on your Interest Rate will be worth Thousands! in the Long Term.
Feel Free to call anytime…
Regards,
Dan Heon
ProLink Mortgage Inc.
Phone: Calgary 403-257-1801
Phone: Edmonton 780-701-7100
Fax: 403-206-7622
Toll Free: 1-888-281-0111
Email: ProLink@telus.net
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