22 February 2008
Mortgage Rate Upddate
Posted by Ryan Coffey under: Uncategorized .
Lots of news coming in lately about things that the various government organizations are doing to make buying more affordable. Cutting the lending rates again is just one. If you’re not sure why this is significant for you, go to my mortgage calculator and put in the price of a home, see what the monthly payment would be, then reduce or raise the interest rate by .5%. Now think of how much difference this will make over the years.
Check out Michael’s email and the article he sent me below.
Ryan
Hey Ryan,
Rates have remained steady and Bank of Canada likely to maintain their position of a rate cut of a quarter of a % for the next meeting. For variable rates, this is good news! On the fixed side, our best 5 year fixed is still 5.64% on a special.
Hope all is well, more reading below for the curious!
Michael
( tag on logo for website )
Michael Ledingham - Licensed Mortgage Broker
Tel # 250-755-3014 Ext:224
TF # 1-877-750-3014
Fax # 250-755-1608
Email: m.ledingham@vericoselect.com # 101- 1801 Bowen Road, Nanaimo B.C. V9S 1H1
Nathan Vanderklippe
19/02/2008
National Post
FP1
(c) 2008 National Post. All Rights Reserved.
VANCOUVER – Standing before a crowd of pinstriped West Coast business leaders in a gilded Vancouver meeting hall, Mark Carney, governor of the Bank of Canada, took to the podium for his inaugural speech yesterday and restated his commitment to trimming interest rates in the near future.
But anyone expecting a dramatic coming-out party from the new governor likely left disappointed, as Mr. Carney delivered a speech on globalization that trod ground already well covered by the country’s central bank.
His comments left little doubt that the 42-year-old former investment banker intends to steer the Canadian economy in much the same way as his predecessor.
“This speech could have been given by David Dodge, there was nothing much new in terms of the interest-rate policy ahead,” said Avery Shenfeld, senior economist with CIBC World Markets.
Mr. Carney did repeat, virtually to the letter, comments he has previously made on the need for a cut to the bank’s target overnight lending rate.
“In line with our base-case projection and the associated risks, the bank, [has] said that further monetary stimulus is likely to be required in the near term,” he said.
“The timing and degree of that stimulus will be determined at future fixed announcement dates, after we have conducted a thorough analysis of, and applied our judgment to, all information at that time.”
Economists read that statement as assurance the bank will trim at least 25 basis points, if not 50, from the bank’s target rate when it makes its next announcement on March 4. A series of furious cuts by the U.S. Federal Reserve, which slashed its rate by 225 basis points between September and January, has left the U.S. rate at 3%, a full percentage point lower than Canada’s.
Fears that the difference between the two is weighing down the Canadian dollar, not to mention worries that a likely U.S. recession will pull Canada with it, have led some commentators to push for significantly greater cuts from Mr. Carney, who acknowledged those issues in his speech.
Yet he also noted a possibly countervailing push from globalization-driven gains in Canada’s terms of trade, which he said “could lead to stronger domestic demand growth than we had assumed.” The high Canadian dollar’s downward push on retail prices, especially among car and book sellers, could also provide a “greater and more persistent downward pressure on prices than we had assumed,” he said, while affirming the bank’s commitment to holding the country’s inflation rate around 2%.
In his speech, entitled “The Implications of Globalization for the Economy and Public Policy,” he compared today’s enmeshing of world economies to the time of the Romans and cited a series of numbers showing how Canada has benefitted — especially by gaining new, higher-skilled jobs, even if it has come with the pain of losing old elements of the economy.
For example, he said, though Canada lost 320,000 manufacturing jobs since 2002, it has actually gained 382,000 jobs in other goods-producing sectors. He did, however, note that the process of retraining workers for new jobs is likely to blame for “disappointing” declines in Canadian productivity growth. He also intimated that governments need to tear down barriers to movement of workers across the country through “policies [that] do not frustrate market-based adjustments, but rather are aimed at promoting flexibility in markets, particularly in labour markets.”
As for his reticence to tip his hand on anything new regarding bank monetary policy, or, indeed, to even rephrase what he has already said, Mr. Carney told reporters being boring is just part of the job.
“Look, as the central banker I don’t mind repeating things,” he said. “In fact, that’s some of the art.”