The Bank of Canada (BoC) reduced the overnight rate by 0.50% on 3rd March 2020. In the grand scheme of things, this is a pretty large reduction.
The BoC followed the U.S. with a rate cut to soften the blow of coronavirus. In a written statement about the announcement, the bank said that prior to the outbreak, Canada’s economy had been operating “close to potential with inflation on target.”
However, “COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply, and supply chains have been disrupted. This has pulled down commodity prices, and the Canadian dollar has depreciated. Global markets are reacting to the spread of the virus by repricing risk across a broad set of assets, making financial conditions less accommodative. It is likely that as the virus spreads, business and consumer confidence will deteriorate, further depressing activity.”Based on what I’m reading, the BoC is ready to cut rates further due to Coronavirus.
We’re also now at all time lows for fixed rates… Please see below.
It’s a horrible thing that the world is going through… The economy is suffering because of coronavirus. However, the silver lining is that it means money is becoming “cheaper” for borrowers and we’re doing our best to help our clients take advantage of these developments.
What Does This Mean For YOU?
Are You in the Process of Purchasing or Transferring Your Mortgage?
Rates are falling and it doesn’t seem like there’s a bottom yet. We’re doing our best to catch up with the rates and give all of our clients new rates as they come down.
Have a Mortgage Already?
Variable Mortgages: Sit tight – we don’t know if the banks will follow suit and decrease their prime rate by 0.50% or by less than that amount.
If you have a variable rate, it may also be a good time to transfer to a fixed rate since the fixed rates are low vis-a-vis the variable rates.
Fixed Rates: This may be a good time to transfer your mortgage to a lower rate. Please reach out to us – we would be honoured to see if we can save you money.
**Fixed rates are now at record lows and are continuing to plunge…
Please check out below on how fixed rates move.