The Bank of Canada's lack of movement on prime is the best action or "non-action" to take at this time. Mark Carney's most important comment was: "there are too many unknowns". World markets are struggling and we are greatly affected by their ability to do business with us. Especially when it comes to selling our goods. The value of our dollar determines if our customers can buy from us. Our biggest trading partner to the south is expected to flounder for well into 2012. Shifting our business to other markets takes time. It will take a good act of balancing growth and maintaining what we have.
This translates into interest rates will remain at their lowest ever and may even drop further. Currently variable rate: prime minus .75% = 2.25% or 5-year fixed @ 3.59%
Those who have their feet firmly planted on the ground (good credit, proven, reliable income and some savings) and know what they want to do can take advantage. Home purchase, debt consolidation, access to equity for investment are all more realistic. (Variable rates are still the way to go for now as fixed rates continue to drop.)
Variable rates can be locked in at any time for terms of 3, 5, 7, 10 years or longer for protection against the invevitable higher rates in the future. Long term planning for long term plans.
Everyone's position is different and deserves a review.
#2 - 1810 Third Ave.
Prince George, BC V2M 1G4
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