March Bank Rate Cut: How it Affects Us?

Posted Apr 16, 2008 @ 1:40 pm, Viewed by 120 Visitors, Read 120 Times.

The Bank of Canada cut the lending rate to 3.75% on March 4th and signaled further cuts in the near future. March’s cut put the advertised five-year conventional mortgage rate at 7.29% and competition among mortgage lenders continues to remain stiff. This enables borrowers to negotiate discounts from advertised rates; however, the U.S sub-prime mortgage fiasco has tightened credit conditions in financial markets resulting in smaller discounts. Housing prices are forecast to continue rising and additional cuts to mortgage interest rates are good for new housing affordability and demand.

 

The Bank of Canada does caution that there are clear signs that the U.S. economy is likely to experience a deeper and more prolonged slowdown than had been projected. This will likely have significant spillover effects on the global economy. The bank also states that the domestic economy remains strong.  The high Canadian dollar is keeping inflation in check; although, with the weakening U.S. economic growth it is hurting exports.  Recent cuts aim to boost economic growth and the bank says they will continue to lower interest rates.

 

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Michael Peterson

Michael Peterson I am a Nanaimo Realtor with Re/Max of Nanaimo, I have been in the real estate business since 1992. My primary goal is making you #1 in buying or selling Real Estate, and in making your dreams a reality. Read More

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