Many people these days are concerned about interest rates. While past performance does not predict future performance, I thought it would be helpful to review this prime rate chart for Canada:
- Currently, prime rate is at 5.95%. Prior to current, the last time prime rate was in this range was Nov/07, some 15yrs ago. It was 6.25%. While we don't know if we have hit the ceiling on our prime rate, please notice back in 2007 the trend in prime rate after reaching it's high. It is a nice downward trend.
- Prime rate reached a low of 2.25% in April/09. In March/20 prime also reached a low of 2.25%. In Feb/22 prime rate was 2.45%. The chart reveals that since 1940 prime rate has never been lower.
- August/81 prime reached a high of 22.75%.
We will all draw our own conclusions on interest rates, but I believe this chart puts interest rates into perspective. We have had a great run on low rates compared to what history tells us. You may be worried about affordability but please pause for a moment and ask yourself how did people afford their payments when the rates where higher than today!
Please feel free to reach out if you have any questions for me.