In an unusual move, the Bank of Canada has declared they are holding the overnight rate at a low .25% until June 2010! This isn't usual for the Bank of Canada to plan to hold a rate for this long. The Bank of Canada did this to give confidence to the banking sector as a stimulus for the economy. Those who have variable rate mortgages will be happy about this announcement. The Prime Lending rate followed suit to an unprecedented low of 2.25%! Fixed rate mortgages are also dropping. A 5-year fixed currently is at 3.69%.

 

What this means is, if you bought a $300,000 house last spring on the then 5-year rate of 5.39% with a 25 year amt, your payments would have been $1,812. If you bought it today with the same amt and with the new low 5-year term rate of 3.69%, it would save you over $17,000 over the life of the term with payments of only $1,528. That's an interesting change in interest rates.  

 

Laura Chanin

 

 

 

p.s. Keep the evening of June 10th open for an important presentation at the beautiful Hotel Vancouver. More on this later.