I often get asked what are the best interest rates or the lowest interest rates available.  Here is your answer to that question.

As of Feb. 4,2010

The lowest rates I currently have available are:

5 year Fixed rate of 3.72%

5 year Variable/Adjustable rate of Prime -.35%

(which is currently 1.90%)  This is amazing

Now keep in mind that these rates are not available to every applicant or on every property.  There is always fine print attached to deals like this, so give me a call and let me take a look at your situation and see if these rates are a fit for you.

The Bank of Canada has decided to kept borrowing costs at a record low 0.25 per cent today and reiterated they'll probably stay there through the middle of next year, while expressing optimism that economies around the world are on the mend. ``Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010,” said Governor Mark Carney.

The stable interest rates are contributing to investor and homebuyer confidence.  It is inexpensive to borrow and finance right now and much of the Canadian economy continues to remain strong.

If you are thinking of finding a sound place for your investment dollars, Canadian real estate is probably one of the most solid choices you can make.

Recent actions from the Bank of Canada point to the fact that they are sticking to their policy of holding the prime rate at its current low level until next year.  They also caution though that the low rate cannot last forever and the consumers should not make financial decisions believing that the rates will not be increasing eventually.

Here is an article from todays thestar.com

Be careful, low rates won't last, says top banker

Mark Carney says people should manage `for a longer horizon'

OTTAWA–Bank of Canada Governor Mark Carney is warning homebuyers against taking on too much debt because today's low interest rates will not last forever.

"People should manage their affairs prudently in anticipation that, at some point, rates will return to a more normal level," Carney said after releasing his quarterly economic review.

"Obviously, rates are exceptionally low," he said, noting that the central bank has used its interest-rate-setting influence to drive down consumer borrowing costs to record lows to help stimulate economic activity.

At the same time, Carney said, the bank has "given pretty clear guidance on how long we expect they (interest rates) will have to remain at these levels. People should manage their affairs for a longer horizon." He reaffirmed his promise that, barring an outburst of runaway inflation, the bank will keep its trend-setting overnight rate at 0.25 per cent until next summer. Assuming the economy is recovering by mid-2010, the bank is expected to begin raising rates.

The bank now estimates that Canada's economy will shrink by 2.4 per cent this year before rebounding with 3 per cent growth in 2010 and 3.3 per cent in 2011.

Carney said the housing market is showing strength and he has "some concern" that low rates and increasing demand by homebuyers could create an artificial price bubble of the kind that plunged the United States into a severe recession when it burst in 2007.

But the debt burden in Canada has not reached the alarming levels faced by U.S. consumers before the recession, he said.

"Canadian consumer balance sheets are starting from a much stronger position than U.S. consumer balance sheets" were in ahead of the economic downturn, Carney told reporters.

The quarterly review indicated the economy is on the mend but the recovery is being slowed by the unexpectedly strong value of the loonie on exchange markets.

Carney, who said Canada's currency is being driven by investors bailing out of the U.S. dollar, kept up what appears to be an effort to throw speculators off balance.

"Intervention is always an option," he added.

"Markets should take seriously our determination to set policy to achieve the (2 per cent) inflation target. Markets sometimes lose their focus. We don't lose our focus."

The bank governor did not give specifics on how it might take the unusual and risky step of intervening.

On Tuesday, by repeating his pledge not to raise interest rates until next summer, Carney seemed to have succeeded in catching markets off guard, with the loonie dropping nearly two cents against the greenback.

CIBC World Markets economist Avery Shenfeld said Carney seems to be engaged in talking down the value of the loonie. "By dampening expectations for early interest rate hikes, he's taken a little bit of a shine off the Canadian dollar."

On Thursday, the dollar shed 0.16 of a cent (U.S.), closing at 95.44 cents.

The bank said the loonie has established itself on exchange markets at about 96 cents, much higher than the 87 cents forecast by Carney a few months ago.

If investors keep shying away from the U.S. dollar, a rising Canadian dollar could "act as a drag on growth" in Canada, he said, especially if consumer and business demand takes longer to rebound globally.

Are Canadian Interest Rates heading up?  YES

The question is how much and how fast.   The conference board of Canada predicts that the rate will move next year and fairly quickly.  Here is a write up from CBC news about the issue.  This is something that anyone who is interested inf financing or refinancing real estate should be aware of.

.

Conference Board predicts 4% bank rate in 2 years

The Conference Board of Canada said Friday it expects the Canadian economy will grow 2.9 per cent in 2010 and the Bank of Canada will raise its target for the bank rate to four per cent by 2011.

The rate is now 0.25 per cent and Bank of Canada governor Mark Carney has committed to keep the rate there until the spring of 2010.

Conference Board predicts the bank rate will reach 4% by 2011. (CBC)

The Ottawa-based think-tank also predicted growth of 3.6 the following year.

The prediction was on the higher end of many forecasts but consistent with what Bank of Canada expects.

The board's analysis concluded Canadian consumers — encouraged by low interest rates — are becoming more confident and willing to spend.

While private business investment will pick up, it said, about $106 billion in profit has disappeared from corporate balance sheets in Canada over the last nine months, and tight cash and lending will hold back a strong recovery in private investment until 2011.

The Board said government stimulus measures worldwide have rescued financial markets and are expected to continue to have an effect into 2010.

The Board concluded the U.S. economy "has hit bottom," and that while the U.S. economy is growing, it will show little strength until 2011 because of low consumer spending and tepid private investment.

The following article by Virginia Galt, published in the Globe and Mail, details the situtation that the Bank of Canada faces.  The Canadian dollar keeps rising as the price of comodities increases and the Canadian economy continues to leave many of its problems behind.  As the dollar rises it puts pressure on the Bank of Canada to raise rates to prevent inflation. 

Will Canadian interest rates go up next week?   Will the Bank of Canada stick to its previous position that they would leave rates alone until middle of 2010?  As a real estate professional this is an issue that I speak about daily with my clients.

Here is the full text of the article.

Virginia Galt

Globe and Mail

Makes you wonder why any customer would get a mortgage from one of the banks instead of using a mortgage broker?  My rates beat RBC by almost 2 percent!!!!  This is an insane amount and could be hundreds of dollars per month and tens of thousands of dollars you would pay extra to take a RBC mortgage.  Insane!!!!

Look at these rates, mine are waaaaaaayyyyyy lower than these.  Call me.

RBC Royal Bank changes residential mortgage rates

TORONTO, Oct. 9 /CNW/ - RBC Royal Bank announced today that it is increasing its residential mortgage rates effective October 10, 2009.

    The changes are as follows:

    Fixed Rate Mortgages

    Six-month open              6.45 per cent     (increase by 0.10 per cent)

    Six-month convertible       4.65 per cent     (increase by 0.10 per cent)

    One-year open               6.45 per cent     (increase by 0.10 per cent)

    One-year closed             3.80 per cent     (increase by 0.10 per cent)

    Two-year closed             3.95 per cent     (increase by 0.10 per cent)

    Three-year closed           4.45 per cent     (increase by 0.10 per cent)

    Four-year closed            5.29 per cent     (increase by 0.35 per cent)

    Five-year closed            5.84 per cent     (increase by 0.35 per cent)

    Seven-year closed           6.80 per cent     (increase by 0.20 per cent)

    Ten-year closed             6.95 per cent     (increase by 0.20 per cent)

    Variable Rate Mortgages

    Variable Closed             RBC Prime + 0.00% (no change)

    Special Fixed Rate Offers*

    ----------------------------

    Six-month convertible       4.15 per cent     (increase by 0.10 per cent)

    Four-year closed            4.24 per cent     (increase by 0.35 per cent)

    Five-year closed            4.54 per cent     (increase by 0.35 per cent)

    Seven-year closed           5.35 per cent     (increase by 0.20 per cent)

    * The rates indicated are special discounted rates and are not the

        posted rates of Royal Bank of Canada. To calculate a rate discount

        compare the Special Offer rate against the posted rate for the

        applicable term.

        Special Offers may be changed, withdrawn or extended at any time,

        without notice. Not available in combination with any other rate

        discounts, offers or promotions

While this news does not affect us directly in North America, it does send a global signal and should serve as a wake up call for some.  Read this breaking news....

The recent history of interest rate hikes

Australia's interest rate hike yesterday was said to be the first by a G20 country since the financial crisis began. When was the last rate jump, and by which country?

The last rate hike among the Group of 20 was in Indonesia, where the key rate was boosted by 0.25 percentage points to 9.5 per cent in early October, 2008.

The Indonesian central bank was trying to take a bite out of rising inflation, even though almost everyone else in the world was cutting rates to try to stem the burgeoning financial crisis.

The previous G20 upward move was at the European Central Bank, which had pushed up interest rates by a quarter of a point in July, 2008, to 4.25 per cent.

When was the last time the Bank of Canada raised rates?

You have to go all the way back to July 10, 2007, when the Bank of Canada boosted the benchmark overnight rate by 0.25 points to 4.5 per cent.

The next change was a quarter-point cut to 4.25 per cent in early December of 2007, and it has been all downward since then. There have been nine more cuts, taking the overnight rate to its current level of 0.25 per cent.

By Julian Beltrame (CP) – 11 hours ago

OTTAWA — The Bank of Canada's efforts to spark a rebound in the domestic housing market may be working too well.

A new TD Bank report shows house sales and prices have defied gravity during the severe economic recession and are poised to end 2009 at higher levels than they were before the downturn hit Canada last fall.

Economists credit the central bank's policy of slashing interest rates the past year with reviving a dormant housing market - perhaps too much, too fast - leading to speculation that bank governor Mark Carney may have to reverse course and raise rates earlier than expected.

"We're not calling what we see presently a housing asset bubble," says TD economist Grant Bishop,

"We think it will moderate, but should it fail to moderate, it will no doubt be concerning to the bank."

Talk about exit strategies as the global economy improves has been building for months, particularly since most governments have ramped up spending beyond comfort levels and central banks have cut rates to the bone. Low interest rates, along with a loosening of controls, is largely blamed for the U.S. housing bubble earlier this decade that eventually triggering the global financial crisis.

U.S. Fed officials have recently begun to speculate about the proper time to raise the policy rate from zero, and European Central Bank policy-makers have also sounded more hawkish on interest rates.

On Tuesday, Australia went beyond talk by increasing the policy rate by a quarter point to 3.25 per cent, citing rising home prices in that country as a key concern.

Australia benefits from a resources-based economy that ships many of its products to China, Japan and other Asian countries.

The Bank of Canada has issued what it calls a conditional commitment not to raise its policy rate of 0.25 per cent - the lowest practical level - until at least July, but last week Carney went out his way to stress the pledge had plenty of conditions.

Devoting three paragraphs on the subject in a speech in Victoria, Carney concluded the section by stressing: "In short, it is an expectation, not a promise. If circumstances affecting the outlook for inflation change materially, the conditional commitment would change."

In Europe, the two leading central banks are expected to keep interest rates unchanged Thursday and damp down any talk that borrowing costs will soon rise in the wake of the move by Australia's central bank to lift rates.

Analysts say the European Central Bank, which controls monetary policy for the 16 countries that use the euro, and Britain's Bank of England will keep benchmark interest rates unchanged at historic lows of one per cent and half a per cent.

Unlike Australia, the eurozone and British economies remain in recession, though upcoming figures may show a modest pickup in growth over the final months of 2009.

'We continue to believe the ECB remains very comfortable with notions of keeping the policy rate at a low level for a prolonged period of time," said Royal Bank of Scotland economist Silvio Peruzzo.

'However, the rhetoric is likely to turn gradually more hawkish in recognition of the macroeconomic outlook, which is evolving more positively than the ECB expected," he added.

Copyright © 2009 The Canadian Press. All rights reserved.

Just read this great article regarding Canadian credit cards and the rule changes that are coming into effect soon.  While I agree that they do not go far enough, it is at least a step in the right direction.  This great article was posted on the blog section of yourmoney.ca and was authored by Kerry Taylor.  I am going to go back to the site and check out more of their stuff, but for now here is the original article and a link to it as well.

http://blog.yourmoney.ca/2009/10/new-credit-card-rules.html

Do the new credit card rules go far enough?

Paying off your credit card bill just got a little bit easier. Maybe.

On January 1, 2010 a series of new rules will take effect that force banks to clarify payment details on your credit card statement and provide a standard grace period to pay off your plastic.

Under these rules, credit card companies must also give you advance notice of interest rate increases, stop credit limit increases without your consent, and limit debt collection practices.

But you'll have to wait until next September before the biggest change kicks in, when banks must give you a mandatory minimum 21-day interest-free grace period on all new credit card purchases when the outstanding balance is paid in full.

Interest rates and fees still high

Critics of the credit card regulations say the changes do little to help consumers.

"Skyrocketing high interest rates and the growing number of superfluous fees are the biggest hindrances for consumers," said New Democrat MP and consumer protection critic Glenn Thibeault in a statement. "If the government wants to protect Canadian credit card users, it must go all the way and implement substantial regulations that would put a cap on interest rates and eliminate many of the excessive fees that consumers are being charged."

Thibeault proposes that capping credit card rates at five per cent above prime would help "Canadians who are stuck paying interest rates as high as 25%" and would provide better protection from gouging, giving real relief.

Your new statement

Expect your credit card statement to look different in the new year when lenders must add a summary box that describes all fees and shows you how long it would take to fully repay the balance if you only make a minimum payment every month.

For example, under the new rules a summary box may show that a $5,000 credit card balance at an 18% interest rate would take 11 years and two months to pay off if you only make minimum payments. The total interest paid is about $2,873 and the total tab is $7,873.

But you don't have to wait for these new changes to see how interest rates and minimum payments bust your budget. Check out this Credit Card Calculator to get the facts today and see how many years it will take to payoff your balance. Results may shock you.

For more information on the changes coming to your credit card, see the regulations in the Canada Gazette.