More good news for people holding a variable mortgage and those individuals currently looking to buy property - the Bank of Canada announced another reduction to their overnight lending rate from 1.5% to 1%. Most of the banks are following suit with a half a percent reduction to their prime rates from 3.5% to 3.0%.

If you are a first time buyer or investor, this summer is a good time to be looking at buying property. The inventory is actually very high quality and available inventory is competing on price to find the right buyer. At this moment in time the supply is high and demand is low. To see an up to date graph on Supply vs. Demand read the market forecast.

The Bank of Canada announced today that the overnight target rate will stay at 3%. This means that prime will likely remain at 4.75%. They state the three factors affecting the economy are:

The Government announced on July 9 that they will no longer back new 40 year amortized mortgages or 100% financing. As of October 15, 2008, insured mortgages will require 35 year amortization or less, minimum of 5% down, a minimum credit score and new loan documentation. The new rules were put into effect to protect and strengthen Canada’s housing market as a result of the housing troubles in the United States. To read more visit: http://www.fin.gc.ca/news08/08-051e.html.