Canada Finance Minister Jim Flaherty: “If we see further evidence that there is excessive demand in the housing market or that there’s an indication that people are taking on obligations that they will not be able to handle in the future when interest rates rise, then we will take some action.”
Canada’s economic leaders are worried that low interest rates are luring consumers into amassing huge amounts of debt that they may not be able to pay back when interest rates rise from their historic low levels.
Canada’s central bank lending rate is 0.25 percent. Mortgage rates are about 4.5 percent, while five-year consumer loan rates for items such as automobiles are about 8 percent.
Recently, Canada’s Finance Minister Jim Flaherty and the governor of the country’s central bank, Mark Carney, have sent warning signals that the days of low-interest borrowing may soon end.
Read the full article, “Days of low-interest borrowing may soon end in Canada, economic leaders say” (Dec 28, 2009).