From the good old days of December 2009. Well the Financial Flush out was almost over and things were stabilizing.
The Bank of Canada kept their key overnight rate at 1/4 per cent. This decision, made yesterday, aligns with their plans. They aim to keep the cost of borrowing money low until mid 2010.
In Canada, as expected, the composition of aggregate demand is shifting towards final domestic demand and away from net exports. In the third quarter, the balance of these shifts resulted in weaker-than-projected GDP growth. Core inflation in recent months has been slightly higher than the Bank had projected, although total CPI inflation remains close to projections.
You can read between the lines that inflation is starting to worry the bank a little. However, for now, they are not willing to increase rates to combat it. They may choose to act before inflation gets rolling. If fuel prices remain low, inflation may remain under control, but if there is a spike then we may see big interest jumps in reaction to this sooner than June of 2010.
My advice to those who ask continues to be, take advantage of these low rates to PAY OFF debt, not get more debt. If you can afford to make over payments on your debt vehicles, do so, you get more bang for your buck, and you’ll get better pay back than most things you might invest in, these days as well.
TD Rates Up
TD followed through with there promise to screw up my Secured Line of Credit making it a "Prime" (their definition of it, not the Bank of Canada's) plus 1.0% rate, instead of the "Prime" + 0.5% that it has been for the past 8 years (dating back to my days with Canada Trust). The explanation for this increase was very suspect (in my opinion), claiming that the borrowing markets are tight and it is much harder for the bank to borrow money. What does this have to do with an existing loan that they underwrite?
I think I would respect more a statement like, "See if you can find a lower rate somewhere else, we dare you!". That kind of statement makes much more sense to me.
📈 Bank of Canada Overnight Interest Rate (2005–2025)
🔍 Key Highlights:
- 2005–2007: Rates hovered around 2.75% to 4.50%, reflecting a stable economic period.
- 2008–2009: In response to the global financial crisis, the Bank of Canada slashed rates to a historic low of 0.25%.
- 2010–2018: Gradual increases brought rates up to 1.75% by late 2018.
- 2020: The COVID-19 pandemic prompted a rapid reduction back to 0.25% to support the economy.
- 2022–2023: To combat rising inflation, rates were increased sharply, reaching 5.00% by mid-2023.
- 2024–2025: As inflation pressures eased, the Bank began lowering rates, settling at 2.75% by April 2025.
For a detailed breakdown and the most recent data, you can visit the Bank of Canada's official Interest Rates page.
Interest Rates in 2009
- October 2008 rates continued to fall, but did we plan accordingly? No, we spent more.
- January 2009 rates were at 1%, money was effectively free.
- April 2009 0.25 % Interest Rates, Holy Cow!!!!
- Interest Rate Hovers July 2009
- Interest rates didn't rise in September 2009
- October 2009 rates stayed the same
- Still Cheap to borrow in December 2009
- Interest Rates Going Nowhere For January 2010
With TD, it’s just a money grab. And if it’s within the loan contract that they can do so, I guess in the end I don’t really have a problem with that. I’m not one of those raving lefties who opposes corporate profits.
But that doesn’t mean you shouldn’t check around for a better rate. I’ve been moving my business away from TD slowly but surely for almost 2 years. They still have my locked-in mortgage (2 more years), and they have an outstanding student LoC that does indeed get a lower rate than my credit union can offer. But other than that, I’ve found that I much prefer dealing with the credit union…they screw up about as often as TD, but it takes one 5 minute phone call to fix instead of 2 calls totaling an hour or more.
“See if you can find a lower rate somewhere else, we dare you!†That’s a great line. Maybe it should have been the title of your post.
Sometimes the best take, is the last take.