It might not be all good from a foreign investment perspective, or if your portfolio includes a lot of energy stocks, or if you were heading south for the winter but, most of us have been grateful for the drastic drop in gas prices and now, if you are a home owner thinking about upsizing, a first time homebuyer, someone with a variable mortgage rate, or considering buying an investment property - you should be thrilled by Bank of Canada's reaction with dropping its key interest rate.
Wednesday Bank of Canada unbelievably dropped its key interest rate by 0.25.
Variable rates and lines of credits will be the first to feel the ease on interest. Prime rates have yet to make changes as banks set them on more than just the Bank of Canada's key interest rates, so those of us who are locked into rates will not feel any immediate impact.
If you are currently shopping around you should speak with your mortgage broker to see what options are available to you. This isn't the time to over extend ourselves as its inevitable rates will go back up - however this could be a great time to take advantage of some of the lowest rates in history to get a variable interest rate before locking in.
On the flip side - if you were planning on investing this year, this wouldn't be the best time to put your money in either short or long term savings accounts as rates being paid out will also be considerably lower…. rental properties could potentially be an excellent investment/income generator during this time.
If you would like to learn more about the drop in rates and how this will effect you specifically or how you can best capitalize in this most likely temporary dip please feel free to email me at email@example.com.