The Bank of Canada today Surprised Markets by cutting its overnight lending rate by quarter percent of a basis point. The Rate now sits at 0.75% down from earlier 1%. The looming threat posed by falling crude oil prices cited as the reason.
"The drop in oil prices is unambiguously negative for the Canadian economy," Bank of Canada governor Stephen Poloz said in a morning news conference. The overnight lending rate was last changed September 2010 and remained at one percent since then. This will affect the various loans such as car loans, mortgages, lines of credits, credit cards(some with Interest rates based on Prime rates) or other loans which fluctuate with prime rates.
The people who will benefit from this can be grouped as:
Homeowners: Anybody who currently owns a Home and wishes to get it refinanced or take the equity out can benefit from the expected drop of the rates by the banks following the rate cut by Bank of Canada. For Homeowners with Variable Mortgages, this is a good news and it remains to be seen how much the banks are going to reduce their Interest Rates.
Home Buyers: People considering to buy their next home can certainly take the advantage of the historically ultra low rates to secure financing for their home. Also it might be easier for them to qualify for the mortgage.
Home Sellers: Home owners currently in the market trying to sell their home can start to see the benefit due to more buyers moving into the market and actively searching for new home. Increased demand will also lead to more homes coming up for sale and homeowners can take advantage by going in early into the market.
If you are Thinking of Buying your next home or Selling your home, feel free to call at 416-220-6000 or Email at email@example.com.
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