Interest Rates On Their Way Down?

Posted on November 16, 2007 at 3:08 pm
Filed Under Financial Markets, Mortgage Planning

An article at reportonbusiness.com states that many analysts are calling for a reduction in the Bank of Canada rates.

Ted Carmichael, Chief Economist at JP Morgan Securities in Canada says “We now expect that the Bank of Canada will need to cut its policy rate by 25 basis points on each of its next four decision dates through April.” Amazingly enough, that would bring the rate all the way back to 3.5% from its current status of 4.5%.

Your Take-Away: It is a near impossibility to predict with 100% certainty that the Bank of Canada will in fact drop rates four consecutive meetings in a row, but if you look at the current dollar and our weaker then normal economy over the past two quarters, it is at least believable. If you are looking to set up a new mortgage or refinance your existing mortgae, this may be your best opportunity to go with a variable rate. History says that variable rates provide a lower overall interest cost then fixed rates, and the next six months or so could prove that point even more clearly.

Again, talk to a Professional to determine if a fixed or variable rate is best for you and your specific situation.

Have a great weekend!

Chris & Elisseos

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