Will the Prime drop again in April??

[qhong]

I think on 21st of April, bank of Canada will announce a new interest rate. I asked friends around me. It seems to be time we are not sure. Last time, most of us were pretty sure it gonna drop. How about this time?

[Octavius]

I think on 21st of April, bank of Canada will announce a new interest rate. I asked friends around me. It seems to be time we are not sure. Last time, most of us were pretty sure it gonna drop. How about this time?

Frankly, I don't think so.

The rate is already about as low as it can go (I think it's at 50bp right now...). An extra 25 or 30 (or more) basis points really won't make any difference.

In addition, inflation is increasing at a faster rate right now (at least according to the National Post...).

I think the rate will remain where it is right now. I don't forsee another cut.

Then again, I don't know anything ;)

[NUTS]

I think on 21st of April, bank of Canada will announce a new interest rate. I asked friends around me. It seems to be time we are not sure. Last time, most of us were pretty sure it gonna drop. How about this time?

dont think so - its nowhere to go but to zero from here.

If you're suggesting a 0.25 cut - then I suppose that its possible, or we could see a 0.25 - 0.50 increase

[badmus]

I think I read in the globe and mail that the Boc said last month's cut would be their final cut, but I think even if it is going to go down any further it would be later in the year

[qhong]

then maybe it's time to lock your mortgage rate. I'm thinking about getting a 5 yr fixed close , instead of variable close.

[angel_wing0]

i doubt it's going to drop anymore...2% would be heaven but i doubt boc will go THAT far.

[liorsyncro]

It's hard to say. There may be another rate cut (personally I think there will be one) but it won't do anything. Dropping it to zero will largely have a symbolic effect. The next phase I expect will be more quantitative measures, and they will come gradually in Q2 when the banks start reporting losses on credit debt. The subprime mess is behind but now is where things really start to spread out.

[liorsyncro]

i doubt it's going to drop anymore...2% would be heaven but i doubt boc will go THAT far.
They may go that far, but it's really up to the banks to pass it to the consumer. The ted spread is well over 100 bps, triple what it used to be when things were "normal" and credit was flowing, perhaps a bit recklessly. Therefore, there's still a fair amount of nervousness in the credit market, banks are paying more to borrow, and this thing doesn't look like it's going to be resolved until the Americans pull everyone else out with them.

[LWNTHK]

I think Government know dropping another .5% will not do anything to the problem we have. So I think they will do something else. (or do nothing but just keep on talking). So the prime rate will not drop. However I think there may be room for Long Term Fixed (3 to 5 year) % Mortgage to be dropped (0.25 to 0.5 %) before April. We'll see.

[NUTS]

off the wire, here's one that will never happen in Canada - or will it?

http://www.thisismoney.co.uk/mortgages/mortgages/article.html?in_article_id=480899&in_page_id=58

[speedyforme]

I doubt it since things don't look AS grim based on current news.

Damn.

[brunes]

I think people who are saying that the rate "can not go lower" need to take a step back and look at other places in the world, where the rate is at 0.1% or lower.

http://www.fxstreet.com/fundamental/interest-rates-table/

The Canadian prime rate has tons of room to move; the BOC has actually been conservative with their cuts compared to other places. A 0.25 bp cut would not surprise me at all.

[LWNTHK]

I think on 21st of April, bank of Canada will announce a new interest rate. I asked friends around me. It seems to be time we are not sure. Last time, most of us were pretty sure it gonna drop. How about this time?

Although I don't agree with this. But some people may do.

"The always vocal Garth Turner calls fixed-rate mortgages “dumb, extreme and costly.” He says “Why the hell” would you lock in now when you can do so later “with a phone call when it becomes apparent” rates are going up.

Currently you can get one close to the 3% mark. This rate may actually decrease by a quarter point over the next few months, when the central bank cuts its key rate an equal amount, as job losses (and unsold Chryslers) mount"

http://www.greaterfool.ca/2009/03/21/how-not-to-borrow/

[mecassa]

i think that they are done lowering prime

[ilusa]

I doubt it,

[jcon]

Really what they seem to be leaning towards is making more money available. The rates are already enticing, but there seems to be a lack of funds available.

I would expect the BOC to move on the 'availability' front rather than the 'rate' front.

[onlineharvest]

then maybe it's time to lock your mortgage rate. I'm thinking about getting a 5 yr fixed close , instead of variable close.

Please remember that fixed rates are not directly affected by the BoC rate, but rather, the bond market. They can (but not necessarily), move in the same direction. Frankly, I find it difficult to trade a 1.5-1.8% mortgage rate (having a Prime minus product that is), for what would be at best, in the mid 3%

But if you were looking for a NEW rate, I'd say fixed are looking more attractive now than a variable, Prime + 1% product.

[onlineharvest]

I think on 21st of April, bank of Canada will announce a new interest rate. I asked friends around me. It seems to be time we are not sure. Last time, most of us were pretty sure it gonna drop. How about this time?

I expect another cut. I believe (but recently it seems like it is heads or tails) that any kind of 'positive' notions we are getting regarding the economic state are short lived. Sure, Canada appears better off than most but I don't think we're out of the woods yet.

All the same rationale for 'why is it necessary to go this low' could have applied prior to the last cut as well. If they don't cut but leave it the same, I'd still be happy. But I wouldn't be suprised if I saw a rate cut, either in April or down the line.

[jmc0]

I think on 21st of April, bank of Canada will announce a new interest rate. I asked friends around me. It seems to be time we are not sure. Last time, most of us were pretty sure it gonna drop. How about this time?
I don't think so, but I am hoping it'll goto zero :D [BoC just do it, make it 0]