In a widely anticipated move the Bank of Canada further reduced it’s overnight lending rate to 0.25% – the lowest in Canadian history.
The more unexpected part of the announcement was the proclamation from the Bank of Canada that it would leave the overnight rate at this level until June of 2010. WOW. That means you have at least a year of lower variable and adjustable rates to enjoy before needing to lock-in.
Up until recently we have been strongly recommending fixed-rate mortgages to anyone that will listen (how can you lose at 3.69% for 5 years?) but this announcement may make variables and adjustable rate mortgages more intriguing for some…as long as you’re willing to lock-in to a fixed-rate by April or May 2010, when we would predict fixed rates to start moving up if we’re recovering by then.
What this effectively does is gives consumers more choice – between previously risky but now more appealing variable rates, and all-time low fixed rates.
It seems like a great time to explore your household finance needs and investment goals.
For more on this news, check out the Financial Post
P.S. If you’re already in a variable or adjustable rate mortgage, STAY IN IT until April or May 2010 then give us a call to see what to do.