The Bank of Canada which is the National Bank for the entire country and establishes national financial benchmarks set the interest rate for borrowing at 1.25 percent which is a 50 basis point drop. This is in response to financial pressures as a result of the uncertainty surrounding the COVID-19 outbreak which has snarled most financial markets around the world. This change in interest rate will need to unfold in the market place before it affects home borrowing. There are several things one can do in this situation depending on their borrowing status like refinance, pay higher mortgage amount, or consolidate.
- For anyone shopping for a new home, this action will likely save you thousands on your next mortgage.
- If you currently have a variable rate mortgage, don’t let your bank reduce your monthly payment amount.
- Consider putting extra money towards retirement, consolidating debt, and/or conducting home renovations.
“We need a little more time to tell, exactly how the banks will react to the lower rate, typically we should see a decrease in both Fixed and Variable Rates”