The Bank of Canada has cut its key interest rate by a quarter of a percentage point. This is the second rate reduction this year after a quarter point rate reduction in January. The rate now stands at .5%.
The big banks will likely resist lowering their prime rates by the same amount. In January, when the Bank of Canada reduced its rate by .25%, the big banks lowered their prime rates by only .15%. Moves in the bank prime rate affect variable rate mortgages as well as lines of credit. The bank prime rate is now at 2.85%.
This isn't necessarily great news for the Canadian economy. The damage done due to falling oil prices, the slow growth in the manufacturing sector, and the current lower Canadian dollar, were the primary factors in the rate reduction. The Canadian dollar is expected to decline further after this announcement.
The lower interest rate is great news however for Canadian homeowners and homebuyers. They can use these lower rates to pay down their mortgage faster and save in interest costs. All it takes is some simple yet powerful strategies that will save you thousands over the life of your mortgage. I have the expertise to help sort through the options and opportunities that exist regarding your current mortgage or your new one. If you or someone you know could benefit from my guidance, please contact me.
Mortgage Alliance Meridian Pacific Mortgages