The Bank of Canada announced that they will be holding the overnight rate as is, citing a slower than expected 2019 economic outlook; which will keep the prime rate as is. Posted fixed rates should also remain stable. However, lenders’ cost to underwrite a mortgage have increased substantially over the past few years due to legislative changes. It now costs on average $1500-2000 to underwrite a mortgage application due to increased scrutiny and reporting required. The lenders feel that the current climate is a race to the bottom, leaving very little profit margin for your average mortgage. At some point lenders will feel that they can no longer offer the same rate sales, meaning we could see some effective mortgage rates rise slightly while the Bank of Canada Rate and Bank Posted rates remains unchanged.
The Bank of Canada will likely try to increase the overnight rate in 2020.