On Tuesday, April 21st 2009 the Bank of Canada did the unexpected and announced a further 0.25% drop in the key overnight lending rate. The current interest rate is now 0.25%, an all-time record low which the Bank hopes will stimulate the economy by encouraging spending.
In addition to this announcement, the BoC also signalled it’s intention to leave the rate untouched until Spring 2010.
Canada’s Banks followed suit quickly, lowering their prime interest rate to 2.25%. This is the number that holds importance to many Canadians holding loans and mortgages. If you have a variable rate mortgage, your interest rate will be tied to the prime rate.
The result of the BoC move is that thousands of Canadians will have more money in their pockets. Many homeowners will choose to put this savings down on the equity of their home, while others will spend it elsewhere.
We’ve seen a big increase in activity in the Vancouver real estate market since the beginning of February, 2009. As I have written on this blog many times before, the largest segment that appears to be moving this market are first time home buyers.
It was falling interest rates which was the first impetus that began to rejuvenate the Vancouver real estate market. I expect that this move will only inspire more buyers to come into the market…and the fact that this historically low interest rate will be available for another full year appears to be a very good thing for the Vancouver real estate market.
Here are some current media articles on the Bank of Canada move:
- Vancouver Sun article on the Bank of Canada move
- CBC article on the lowered interest rate
- Another CBC article on the subject
Please Donate
On June 22nd, 2009 I will be attempting to break the record for the most ascents of the Grouse Grind for charity. The Royal LePage Shelter Foundation is an incredible organization which is there to help women and children suffering from domestic abuse. Of every dollar donated, 100% goes directly to those in need (Royal LePage covers all administrative costs of the charity).
Donate to the Royal LePage Shelter Foundation
More Info on Vancouver Real Estate
If you’d like to learn more about the Vancouver real estate market generally you can check out this page.
If you are thinking of buying or selling, or just have questions, contact me here or send me a quick email.
Copyright © 2009 by Sebastian Albrecht, Vancouver Realtor with Royal LePage Vancouver ”Bank of Canada Lowers Key Interest Rate to Historic Low”
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