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By: Rory Armstrong

Will the Bank of Canada Cut Interest Rates Again?

Tags: Mortgage Rates, Interest Rates, Economy, Housing Activity, Housing Affordability, Lower Rates

In an effort to offset the slump in oil prices and to boost economic activity, the Bank of Canada reduced interest rates in January.  With lowered interest rates, the cost of borrowing is brought down and spurs spending in all sectors, especially when it comes down to big ticket spending such as mortgage financing and housing sales.

Debt and home affordability has been the hot topic for quite some time.  With the cost of home ownership and household debt on the rise, is it a wise idea to continuously keep the cost of borrowing low?  Some would argue that the Bank of Canada is doing disservice by allowing the cost of borrowing to stay so low, others would argue that responsible Canadians will benefit because lower rates equates to lower monthly payments which equates to more money in the bank.

What's you take on this?  Any way you look at it, the economy is a big machine that needs to be fed one way or the other.