Bank of Canada Lowers Interest Rates

The bank of Canada has reduced their key lending rate by ½ a percent and more cuts may be coming as Canada prepares itself for the impact of a potential US recession. The next meeting is scheduled on Apr 22, 2008. With “core” inflation running at about 1.4%, well below the 2.0% target, there was room for a “monetary stimulus” and a ½ point reduction.

This cut has is great for people that have variable rate mortgages or lines of credit because the rate is directly tied to the prime rate. We'll have to wait to see the impact the prime rate drop has on longer term fixed mortgages.