The Bank of Canada has lowered its key interest rate by .50% today. Douglas Porter, deputy chief economist for BMO Capital Markets says "The Bank of Canada has moved aggressively to keep tighter credit conditions and the U.S. recession from morphing into a Canadian recession". The Bank expects to look at another modest trim in rates at the next decision date in June. This may be the end of the line for rate cuts, especially if credit conditions begin to stabilize. With continued growth in the Canadian economy, moderate growth in domestic demand and high employment levels, the balance of Canada's economy has been offset by the fall in the net exports.
How does this effect borrowers? Lenders are expected to respond positively to the Bank of Canada's rate cuts today by reducing their prime lending rates by .50%. Consumers with variable rate mortgages, lines of credit and home equity lines of credit mortgages will continue to be positively affected by the reduction in rates.
This is great news. Money is on sale, lenders have extremely flexible products to suit most every client and amortizations have been extended making home purchasing more affordable.
If you are looking to purchase, want to check if changing from a fixed rate to a variable rate mortgage makes sense for you, please give me a call to determine your best course of action. I'm here to help. 604-649-5991 or toll free 1-800-687-9020 Accredited Mortgage Broker servicing BC, Vancouver and Fraser Valley residents.
