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How do Lower BOC Rates Effect Canada

Posted on January 25, 2008 at 5:36 pm 
Filed Under Financial Markets, Mortgage Planning

As you know, the Bank of Canada dropped the overnight lending rate by 0.25% on January 22nd.

The drop in the overnight rate by the Bank of Canada presents a mixed picture for the economic outlook. While the Bank acknowledged that “the 2008 outlook for the U.S. economy is now significantly weaker than at the time of the October Monetary Policy Report” and that this “will lead to additional downward pressure on export growth,” policymakers presented an optimistic outlook for Canada’s domestic economy as “domestic demand in Canada is projected to remain strong.” Still, the Bank concluded that “further monetary stimulus is likely to be required in the near term.”

 Your Take-Away: The potential for yet another cut in interest rate later in 2008 is a very real possibility. What this means for you is that we also expect to see the chartered banks decreasing their prime rates by similar amounts. This in turn will make mortgage rates, and more specifically, the variable rate products very attractive. This is something to seriously consider if you find your self purchasing a new house or refinancing an existing mortgage.

Until next time, have a Fantasic Friday!

Chris & Elisseos

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One Response to “How do Lower BOC Rates Effect Canada”

  1. How do Lower BOC Rates Effect Canada | Mortgage Refinancing on January 26th, 2008 4:47 am

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