Skip to content

Posts tagged ‘cut’

Bank of Canada Cuts Interest Rate To Lowest Rate In History At January Meeting

SNIP!

SNIP!

Hello Google Searchers! A post about the March 3, 2009 announcement can be found here!

This morning, the Bank of Canada lowered its key overnight lending rate (the rate at which it lends funds to Canada’s commercial banks) to 1%, slashing it a further 0.5% and taking to 3.5% the total amount shaved off the key overnight rate since the current trend of trimming it started last year.

The Bank believes that the Canadian economy will contract 1.2% this year and we will experience two quarters of deflation and expects the economy will start to turn around in 2010, with a healthy growth of 3.8% as changes to policy take hold. The Bank also noted that the lower Canadian dollar will make Canadian commodities cheaper to other countries.

Because the Bank doesn’t foresee core inflation returning to its target 2% until 2011, you can expect interest rates to remain low for all of this year and next.

Canada’s big banks have already indicated that they would be matching the full 0.5% rate cut, trimming their prime rates to 3%. I believe this is a good sign that the availability of credit has loosened up somewhat. In recent months, when the Bank of Canada has made a cut to interest rates, the big banks have been hesitant to match the cut in their prime consumer lending rates, opting to keep the savings to themselves to offset higher credit costs.

As a result, anybody on a variable rate mortgage is now saving more money, and anyone shopping for a new mortgage just increased their buying power. With inventory on the MLS starting to ramp up, this combination is great if you’ve been thinking about buying.

The full Bank of Canada news release can be found here.

For more information and sound advice on real estate in Victoria and Sooke, please contact me.

Tim Ayres – Sooke Real Estate Professional

Your comments are welcomed and encouraged!
Just use the form or link below this post.

You can bookmark this post using the button below,
or subscribe to this blog for free updates using the big buttons on the sidebar!

Bank of Canada Slashes Interest Rates In December 2008 Meeting

Chop Chop Goes The Interest Rate!

Chop Chop Goes The Interest Rate!

UPDATE JAN 20, 2009: Click Here

In an effort to provide economic stimulus, the Bank of Canada has lowered its key overnight interest rate by 3/4 of a percent to 1.5% in its meeting today. Since the Canadian economy has been effectively hung out to dry by the political three-ring circus in Ottawa, I’m not surprised to see such a deep cut. If Parliament can’t/won’t do anything, then it’s up to the monetary policy makers at the Bank of Canada to provide stimulus to our economy.

Citing worse-than-expected economic performance both in this country and around the globe, the Bank has admitted that we are in fact in recession, but notes that recent fiscal and monetary actions by world governments is starting to have a positive effect on financial markets, however more time is needed for things to stabilize.

The trimming of the key rate provides a 50-year low in borrowing costs in Canada.

As with any rate cut by the BoC, it remains to be seen whether or not those savings will be reflected in the Big Five banks’ prime lending rates, currently at 4.0%.

Assuming the banks adopt the Bank’s drop in lending rates, and with the recent decline in real estate prices, sidelined buyers may just decide it’s a good time to enter the marketplace.

The Bank of Canada next meets on January 20th, 2009 to set the overnight rate. You can read the full Bank of Canada news release here.

If you have any questions about mortgages or about buying or selling real estate, please call me at 250-885-0512 or use the following link to contact me.

Tim Ayres – Sooke Real Estate Professional

Your comments are welcomed and encouraged!
Just use the form or link below this post.

You can bookmark this post using the button below,
or get free updates using the big buttons on the sidebar!

Bank Of Canada Expected To Cut Interest Rates

UPDATE: APR 22, 2008 RATE ANNOUNCEMENT

Don’t forget, the Bankof Canada meets tomorrow, April 22nd, 2008. The Bank is expected to cut interest rates by another 50 basis points (0.5%) to generate some stimulus in the weakening economy. This is of course great news for anyone on floating rate mortgages and buyers of real estate. With MLS listings at numbers we haven’t seen in years, buyers have more choice than ever when looking for that perfect place.

Be sure to check back tomorrow to see my post about the rate change meeting and my commentary.

Tim Ayres


Subscribe via e-mail, your favourite feed reader, or bookmark this post:

Subscribe  by Email AddThis Feed Button AddThis Social Bookmark Button