Bank of Canada rate cut to mean cheaper borrowing and lower interest on savings

The Bank of Canada located in Toronto has released a statement indicating that they are reducing their lending rate by half of one percentage point. This reduction will result in lower rates for mortgage borrowers, but a lot of it depends on how the local institutions will handle the funds. Financial experts in the UK are saying that if a change isn’t seen in areas such as mortgage rates, then it is a direct result of mismanagement of funds.

Key Takeaways:

  • Concerns regarding the novel coronavirus were instrumental in Canada’s decision Wednesday to cut the country’s key lending rate.
  • The instituted half a percentage point drop is supposed to lead to potentially lower mortgage rates.
  • However, the savings is contingent upon the financial institutions, which can choose to profit or pass on the savings.

“He said the rate cut is a sign that there could be a recession and people should factor in maybe not getting the raise they’re expecting or even getting laid off.”

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