Warning by the Bank of Canada

By Elli Davis, December 12, 2009

As the governor of the Bank of Canada, Mark Carney, said, the current, very low interest rates are very likely not going to maintain their current level for a long time. Thus it might be a big risk for those Canadians who are not able to afford higher payments in the future to borrow now, when the rates are so cheap.

Even though the current situation attracts many people to borrow, they should, according to Carney, seriously consider whether they will be able to pay for their loans in the future, when the rates go up. The level of the key lending rate of the Bank of Canada in 0.25 percent at the moment, and the bank has promised to keep it low at least until the end of the second quarter of 2010.

This situation is actually very intriguing, since the bank at first lowered the interest rates and therefore encouraged people to borrow and spend, but now its representatives are warning the public about the effects of borrowing. Seems a little confusing.

You might also like

1. Bank of Canada advises consumers to be responsible
2. Economic Outlook of the Bank of Canada
3. Unchanged Interest Rates
4. Interest Rates Stay the Same
5. Regent Part Gets a Bank!

Posted in Toronto Real Estate News | No Comments »