No good without the bad, it seems, in Canada’s markets. While the Financial Post reported that the Bank of Canada is holding its overnight rate at 1.75 per cent, policy makers warn that the good fortune won’t last for long.

CBC reported last week that the Canadian housing market will recover fully after two years of consecutive declines, so the interest rate bodes well for those making new purchases. Given strong levels of employment and hiring patterns, inflation has been increasing in a predictable manner while “choppy” consumer spending will be supported by “solid income growth."

READ: Bank Of Canada Keeps Rates Steady Amidst Escalating Trade Conflict

So why the dark cloud? The Bank of Canada’s outlook for global economic growth in 2019 will take a downturn with Canada’s gross domestic product set to expand only by 1.6 per cent next year (as opposed to the anticipated full two per cent). This is because exports and investment contracting have fallen victim to weaker demand, uncertainty and the transportation constraints that continue to limit shipments of Alberta oil.

But no matter the reason – the interest rate will definitely have an impact on borrowers. James Laird, co-founder of Ratehub Inc. and President of CanWise Financial mortgage brokerage spoke about the effect on consumers: "As expected, the Bank of Canada has maintained their key overnight rate at 1.75 percent. There is continued concern about global trade conflicts, the energy sector, manufacturing and investment. However, Canada’s employment remains strong and low rates continue to drive consumer spending and housing activity”.

READ: Canadian Mortgage Rates Among The World’s Highest: Report

Of course, that could change dramatically with a global economic slowdown.

For now, first-time home buyers who are trying to figure out mortgage payments are encouraged to remain hopeful that the rate remains stable, as an interest surge is not expected in the near future.

“Domestically, everything looks super good,” Thorsten Koeppl, an economics professor at Queen’s University, told the Financial Post. “The elephant in the room is the divergence of the Bank of Canada and the rest of the world,” he added. “You see what other central banks are doing. That’s a signal.”

READ: Cost Of Living, Not Mortgages Are Draining The Pockets Of Canadians

A solid fiscal policy laid out by elected officials could also make a huge difference in offsetting any potential weakness in global growth.

“In considering the appropriate path for monetary policy, the bank will be monitoring the extent to which the global slowdown spreads beyond manufacturing and investment,” Koeppl said. “The Bank will pay close attention to the sources of resilience in the Canadian economy — notably consumer spending and housing activity — as well as to fiscal policy developments.”

At the very least, borrowers can breathe a sigh of relief that their mortgage rates aren’t on the increase – for now.

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