Insight and analysis into the Bank of Canada’s posted rates, & their effect on the mortgage market.
The Bank of Canada publishes data on interest rates which is used by those who are considering transactions that involve the payment or receipt of interest. This can help borrowers and lenders decide whether proposed interest rates are reasonable based on particular circumstances.
Posted rates are also used for analysis and contribute to discussions on economic conditions and outlooks, and are also helpful in supporting strategy and policy.
This discussion paper addresses concerns with the extent to which the Bank of Canada’s data on “posted” mortgage interest rates is serving these goals.
The conclusion is that because the data is determined by the administrative policies of a few lenders and not based on market realities, it misrepresents actual conditions and is therefore potentially misinforming market participants and policy-makers.