Toronto, Canada, June 10, 2015 – Canadalend.com , the leading low-cost, private mortgage solution provider in the country, is weighing in on the Bank of Canada’s decision to keep its overnight lending rate at 0.75% and how weak first-quarter economic data suggest additional rate cuts are still possible. Canadalend.com is also commenting on how the low-interest-rate environment will impact homeowners looking to refinance.
The Bank of Canada announced recently that it is keeping its key lending rate at 0.75%, noting that inflation is in line with projections and consumption remains stable, even with the negative effects of lower oil prices. While central bank governor Stephen Poloz is concerned about the U.S. economy, he is confident the Canadian economy will rebound in the second quarter, which would take the need for additional interest rate cuts off the table. (Source: “Bank of Canada maintains overnight rate target at 3/4 per cent,” Bank of Canada web site, May 27, 2015; www.bankofcanada.ca/2015/05/fad-press-release-2015-05-27/.)
“That might be a little optimistic, since both the Canadian and U.S. economies were hit harder than analysts had forecast in the first quarter,” says Bob Aggarwal, president of Canadalend.com. “Canada’s economy contracted for the first time in nearly four years in the first quarter, which is also the most since the 2009 recession. Meanwhile, the U.S. economy contracted 0.7% in the first quarter.”
Aggarwal explains that Canada’s gross domestic product fell 0.6% in the first quarter as a result of lower oil and gas activity. That said, rebounding oil prices have seen the Canadian dollar rally significantly and a rising Canadian dollar could threaten the fragile economic recovery. To prevent this from happening, the Bank of Canada may be forced to cut its key interest rate to zero, not to prevent a recession but to stimulate sluggish growth.
“The ultra-low-interest-rate environment will continue to benefit those looking to refinance their mortgages . For starters, by refinancing, homeowners can get a loan at an even lower interest rate. They might even want to increase or decrease the length of their mortgage term,” Aggarwal concludes. “Before making a decision, it’s very important to understand the basics of refinancing. Contacting the independent, licensed agents at Canadalend.com will help homeowners choose the most suitable refinance option.”
Canadalend.com is one of the largest, most trusted private mortgage brokers in Canada, with skilled, independent, licensed professionals helping Canadians coast-to-coast. Canadalend.com provides its clients with residential and commercial mortgages, home equity credit, debt consolidation, and addressing financing and refinancing concerns. To learn more about Canadalend.com, visit the company’s web site at www.Canadalend.com .