Are lower interest rates good news?

The Bank of Canada cut its key interest rate by a quarter of a percentage point earlier this week. This is the second rate reduction this year (the reduced it by the same amount in January). The current rate is 0.5%.
The big banks will likely resist lowering their prime rates by the same amount. In January, when the Bank of Canada reduced its rate by .25 points, the big banks lowered their prime rates by only .15 points. Moves in the bank prime rate affect variable rate mortgages and lines of credit. The current bank prime rate is 2.85%.
This isn’t necessarily great news for the Canadian economy.
The damage done due to falling oil prices, the slow growth in the manufacturing sector, and the lower Canadian dollar were the primary factors in the rate reduction. Plus, the dollar will likely decline further.
That being said, a lower interest rate is great news for Canadian homeowners and homebuyers.
They can use lower rates to pay down their mortgage faster, save in long-term interest costs, or reduce their monthly payments. Some simple yet powerful strategies could be saving you thousands of dollars over the life of your mortgage.
We have the expertise to help you sort through all the mortgage options that exist. If you or someone you know could benefit from our guidance, please contact us.