Bank of Canada holds rate at 2.25%: Should you lock in a fixed rate for your business loan?
121| 122| 123| 124| 125| 126|On April 24, the Bank of Canada, as expected, held the overnight rate at 2.25%—41 economists predicted it unanimously, with no dissenters. For those of you with floating-rate business loans, this means another three months of peace of mind. But the real question is: should you lock in a low fixed rate now?
127| 128|Why do 41 economists agree with 'no disagreement'?
129|Because the economic numbers are truly conflicted. On one hand, housing prices and consumer spending are starting to ease; on the other, export risks from US tariffs are still looming. Bank of Canada Governor Macklem doesn't want to take the blame, so he's simply 'holding steady' until Q3 data comes in.
130| 131|How stable are floating-rate borrowers right now?
132|Currently, the best commercial bank prime rate is floating around 4.45%. If the central bank doesn't adjust, your monthly payments won't suddenly spike. A stable period is a golden window to restructure your loan.
133| 134|Is now a good time to lock in a fixed interest rate?
135|In the short term, yes. The five-year fixed commercial loan rate from banks is currently in the 4.3% to 5.0% range. Note: don't lock in everything—convert 30% to 50% of the amount to fixed; also, don't lock in long-term fixed—three-year fixed is more flexible than five-year.
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