Interest Rate Lowered to 1.50%

The Bank of Canada on Tuesday cut its key lending rate by 75 basis points to 1.50%, more than many economists had expected. This is the lowest since 1958.

Lower interest rates, if passed on by the commercial banks, encourage businesses and households to borrow and spend for expansion and consumer goods, thereby stimulating economic activity.

The interest rate cut today by the Bank of Canada was this biggest cut since October 2001.

The record low for Canada’s key rate was 1.12 percent in 1958, a time when it was based on treasury yields rather than actions by policy makers.

The bank's next scheduled date for setting interest rates is Jan. 20.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada Hints of Possible Interest Rate Cut

Bank of Canada governor Mark Carney said in a speech recently that the Canadian economy has deteriorated more quickly than he had anticipated, hinting strongly he will cut interest rates at the next meeting on December 9.

This is also the first time that the Bank of Canada has conceded that the Canadian economy could be headed for a recession. "Starting from flat growth in the first quarter of 2009 and the second quarter of 2009 ... recession is a possibility for Canada," commented Carney.

The technical definition of a recession is two or more consecutive quarters of negative economic growth. The Canadian economy contracted in the third quarter ended and is expected to contract again in the current quarter ended Dec. 31.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
http://www.ginaburgio.com/

Each VERICO Broker is an independent owner operator.

Many Canadian Banks Scheduled to Soon Report Q3 Results

Many Canadian banks are scheduled to begin reporting their 3rd quarter results, starting on Nov. 25 with Bank of Montreal.

Some analysts are expecting Canada's six big banks to report an average profit decline of 15 percent for Q3, the biggest drop in 6 years.

The Bank of Canada, the country's central bank, stated on Oct.23 that the Canadian economy, the world's 8th-largest economy, will slow to 0.6 percent this year, the lowest since 1991.

With the country suffering from weak demand in the US and lower prices for commodities, we will soon have the Q3 results from the Big Six Banks... and it will be interesting to see if they provide any indication of how they project their results will be like in the months to come. One thing can be expected however... if banks continue to report poor results, they may consider holding onto a portion of any future rate cuts in the near term from the Bank of Canada by not adjusting their prime lending rates by the same amount.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

TD Bank 1st to Move to Adjust Rates

Three times this month Toronto-Dominion Bank, Canada's second-largest bank, has been first to lower its prime rate following decisions by the Bank of Canada (the central bank) to lower its overnight rate. Toronto-Dominion's biggest rivals followed suit the same day.

For example, on Oct.8, TD Bank was the first to announce a cut that day with a statement at 1 p.m., followed by Canadian Imperial Bank of Commerce (CIBC) 43 minutes later. Royal Bank of Canada, the country's largest bank, was next at 2:32 p.m., followed by Bank of Nova Scotia and Bank of Montreal.

Two days later, the banks reduced their rates again following the federal government agreement to buy as much as C$25 billion of bank mortgages. TD was first, announcing a 15 basis-point cut at 12:31 p.m., followed by Scotiabank at 1:23 p.m.

The Canadian Banks broke with tradition on Oct. 8, lowering their prime rate by 0.25%, short of the Bank of Canada's 0.50% cut.

TD Bank led again on Oct. 21. following a 9 a.m. Bank of Canada announcement of a 25 basis-point cut. TD cut its prime rate 35 basis points at 4:15 p.m. Canada's five other largest banks followed over the next 48 minutes.

What does all this mean for the consumer? At the end of the day, none of these banks gain much advantage by cutting first because new rates don't go into effect until the next day.

Canada's six largest banks are now offering the same prime rate of 4 percent.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Mortgage Rates

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com

Each VERICO Broker is an independent owner operator.

Cdn Gov't to Purchase up to $7.0 Billion of Mortgages

The Canadian Gov't announced today that they will, via their CMHC crown corporation, purchase up to $7billion of insured mortgage-based securities maturing in 2013.

The gov't purchased their first round of mortgages worth $5billion last Thursday.

This is forming part of the Cdn gov't $25billion plan to help banks weather the credit crisis and free up cash for lending.


Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
www.ginaburgio.com


Each VERICO Broker is an independent owner operator.

Canadian Banks are Not Expected to Adjust Prime Rates

Many economists in Canada are expecting the Canadian Banks to hold their Prime Rates, despite the Bank of Canada decision today to drop the overnight lending rate by a quarter point to 2.25%.

The Canadian Banks earlier this month followed a similar trend when the Bank of Canada lowered their rate to 2.50% and the Banks did not pass on the full extent of the cut when the Banks lowered their Prime Rates at that time.


Some economists forecast that the Bank of Canada will lower their overnight lending rate to 2.00% by year-end.


Prime Rates are used as a benchmark to set most consumer loan rates in Canada, such as mortgages and lines of credit. Unlike Canada, many US banks peg mortgage rates off LIBOR, the rate on inter-bank borrowing. That means US banks can match a central bank cut and drop prime rate with little impact on the profitability of their consumer loan portfolios.





Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
http://www.ginaburgio.com/









Each VERICO Broker is an independent owner operator.

Bank of Canada Lowers Rate to 2.25 percent

The Canadian Central Bank cut rates today by a quarter point to 2.25%.

This rate cut today by the Bank of Canada was left than the half point cut expected by some economists. The reaction to this was also seen by the Canadian Dollar... falling to a three-year low following today's announcement.

It will be interesting to see how various Canadian financial institutions react today to the news... in terms of their prime rates and mortgage rates.

The Central Bank commented however that it would likely have to lower rates further to combat the effects of the global financial crisis. "In line with the new outlook, some further monetary stimulus will likely be required to achieve the 2 percent inflation target over the medium term," the central bank said in a statement announcing the lowest overnight lending rate since September 2004.

The Bank of Canada also commented on the US Recession, stating, "The global economy appears to be heading into a mild recession, led by a US economy already in recession."



Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
http://www.ginaburgio.com/

Each VERICO Broker is an independent owner operator.

Canadian Central Bank Expected to Lower Rates

The Bank of Canada is expected to lower its overnight lending rate by as much as a 0.50% tomorrow. If so, this will be the second time in two weeks that the Bank of Canada has taken action to lower rates as part of its efforts to help tame the global financial crisis.


Their overnight rate influences the prime lending rates charged by the chartered banks in Canada. It can affect borrowing costs on variable-rate mortgages and lines of credit.
It will be interesting to see how the Banks react.


The last time the Bank of Canada announced a half-point cut on Oct8, not all the chartered banks passed on the full effect to customers.


Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com
http://www.ginaburgio.com/





Each VERICO Broker is an independent owner operator.

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Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com







Each VERICO Broker is an independent owner operator.