Monday, December 14, 2020 / by Ernie Arrizza
If you've been living under a rock for this past year, you might not be paying attention to what is holding this economy right now. It's the interest rates. Money is cheap to borrow, everybody that qualifies is doing so. The interest rate is staying where it is and as the bank of Canada has stated, it will stay there for some time or even go lower.
What this means... more borrowing, more demand, more debt. Is this a good thing? Possibly. Housing could get out of control and out of reach for middle income people. Debt could sky rocket to a point where people cannot ever pay back. People will further be living on credit and not saving money for a rainy day.
On the flip side, we are seeing people put away financial help from the government, applying for lines of credit and waiting to use it and applying for loans that will help people stay afloat until this economy gets back to full strength. We are also seeing some people invest in their own properties, move up to bigger properties, and invest in their own businesses that are thriving during the pandemic.
Right now some people are dreading hearing those words from cp24, the bank of Canada is raising the interest rates!