It's a good time to buy

With real estate having interest rates low after another government of canada statement saying it will remain the same, it's an excellent time to buy real estate.  The interest rate differential between fixed and variable is large, so it is a great time to do variable and pay of a substantial amount of your mortgage rates.

Politics: By putting interest rates lower, it can boost the economy. 

Inflationary expectations: Because most national economies give evidence of  inflation, meaning a certain amount of money buys fewer goods in the future than it will now. The borrower needs to compensate the lender for this.

Taxes: Some of the gains from interest may be subject to taxes, the lender may insist on a higher rate to make up for this loss.

Risks of investment: There is always a risk that the borrower will go in default, abscond, die, or otherwise go bankrupt. This can mean that the lender generally charges a premium to ensure that, across his investments, he is compensated for those that fail.

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Allan Congo

Allan Congo

CENTURY 21 First Canadian Corp., Brokerage*
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