Possible Prime Rate-cut Looking More Likely

[Hubster]

TAVIA GRANT

Globe and Mail Update

November 16, 2007 at 2:49 PM EST

"A growing number of economists now expect the Bank of Canada to cut interest rates in the coming months as a strong dollar takes a bite out of trade.

Weaker-than-expected reports on international trade and manufacturing over the past week show the Canadian economy likely withered in the third and fourth quarters, they say.

At the same time, the strong currency is reducing import prices and causing retailers to cut prices on their goods — putting a damper on inflation.

“We now expect that the Bank of Canada will need to cut its policy rate by 25 basis points on each of its next four decision dates through April,” said Ted Carmichael, chief economist at J.P. Morgan Securities Canada on Friday. That would bring the rate to 3.5 per cent from the current 4.5 per cent.

Previously, most economists had expected the central bank would stand pat for the foreseeable future. But opinion started to shift last week, with Merrill Lynch Canada saying the probability of a rate-cut in December had tilted to a greater than 50-per-cent chance."

Article here

[thelefteyeguy]

hehe...3 days late?

[Hubster]

Talking to me?

[SMC23]

Does this mean we can expect mortgage rates to follow?

I'm at 5.99% now so by spring does that mean my rate will be at 4.99%?

[stewpy]

Does this mean we can expect mortgage rates to follow?

I'm at 5.99% now so by spring does that mean my rate will be at 4.99%?

If you have a variable rate mortgage yes. If it is fixed, no. At 5.99 I am guessing it is fixed. My variable is 5.25% and I am gonna ride the downward wave

[Daboss]

How soon after a interest rate drop do banks post updated mortgage rates?

My home is closing on Dec 1st, and I wondering if there is a way to push out the closing by a week so I can taking advantage of a rate drop on my closed mortgage.

[SMC23]

If you have a variable rate mortgage yes. If it is fixed, no. At 5.99 I am guessing it is fixed. My variable is 5.25% and I am gonna ride the downward wave

You are right it is fixed for 5Yrs. PLease help me get out. How can i do this??

[Hubster]

How soon after a interest rate drop do banks post updated mortgage rates?

My home is closing on Dec 1st, and I wondering if there is a way to push out the closing by a week so I can taking advantage of a rate drop on my closed mortgage.

The major bank's will all reflect the new Prime rate, if there is one, by the next business day. Lenders will typically allow a one time rate drop seven days before closing - after that you are almost always locked in.

If you are going to be in a Variable rate mortgage (closed can be Variable or Fixed), they will go with the Prime rate at that time. Dependent on the lender - it will adjust monthly or every 3 months max.

If this is a newly built home your builder may extend the closing date if they have some legitimate reason to do so. If it is a resale home, then you will have much more work on your hands as all parties and representatives would have to agree to the new date.

[Hubster]

You are right it is fixed for 5Yrs. PLease help me get out. How can i do this??

Not understanding you - what is there to get out of - your Fixed mortgage???

Nothing wrong with 5.99% for 5 years Fixed. It doesn't get tremendously better out ther these days. Certainly nothing that would be worthy of breaking a mortgage contract.

We need further explanation of what your issue is!


Sorry - I keep forgetting about the multi-quote option

[pitz]

My home is closing on Dec 1st, and I wondering if there is a way to push out the closing by a week so I can taking advantage of a rate drop on my closed mortgage.

If its fixed, there won't be a rate drop per se. Unless conditions improve in the MBS market, and a bank wants to underwrite it.

If you believe in falling Bank of Canada policy rates, the solution is to get a variable rate mortgage, linked to the prime rate.

[grant]

I sure hope the rate holds up til at least the end of the year, or else i'm going to have to eat some crow.

[watungga]

I sure hope the rate holds up til at least the end of the year, or else i'm going to have to eat some crow.

Rate holds up? You mean you hate it when it goes down?

[matradley]

I dislike it when the rates decrease - I lose out on monies on my savings accounts. :/ Other than that, all power to the people on mortgages. The decrease in the interest rates is only going to provide another way for the housing marking to increase exponentially more than the actual homes are worth again.

[watungga]

I dislike it when the rates decrease - I lose out on monies on my savings accounts. :/ Other than that, all power to the people on mortgages. The decrease in the interest rates is only going to provide another way for the housing marking to increase exponentially more than the actual homes are worth again.

Wow! I didn't notice this scenario as I am now living on debt. For one thing, actual homes can go up as long as there are buyers out there. I doubt it will rise up exponentially as the labor wages and cost of living stays the same.

[iamdogdog]

I dislike interest rate going down because I think low interest rate is one of the reasons that house price went up significantly last few years.

Result: Many of my friends can't afford to own a property (Toronto and Markham area).

When price of house is up that much, I simply think that the only two group that benefits from it are GOVERNMENT and INVESTORS.