If there’s been a lesson I’ve learned in the last few months it’s to “Expect the unexpected!”. In tune with the recent sharp and drastic turns in our economy, our industry, and in policy, the Bank of Canada announced this morning that it has aggressively cut it’s overnight lending rate by seventy-five basis points to 1.5%. This cut today puts the overnight rate at it’s lowest point in 50 years.
All of this is good news for consumers and for retailers, I would suspect. It’s also very good for home buyers and sellers (more buyers with cheaper rates means it’s easier to sell your house) who will benefit from the rate drop. The only negative part is that it seems as though most lenders will not pass on the full 75 basis point cut, with TD leading the way (if you call that leadership) by only passing on 50 basis points to the consumer. You can read more about this at the Financial Post.
We’ve already seen a loosening of credit tightness here in Canada. The worse was over within a month, and now it feels like business as usual (almost). We’re seeing plenty of competition from our lenders with rate specials, generous offers, and lots of availability of cash for good quality borrowers and homes. If you’re in the market for a home or need to consolidate some debt it’s tough to beat the rates that we’re getting right now. Give us a call and we’d be happy to help.