The latest rate cut means consumers buying a house can borrow for as little as 3%

interest on their loan if they are willing to buy into the Bank of Canada's

statement Tuesday that it won't be changing rates until June, 2010.

If you don't believe the bank will hold steady on its promise, you can lock into

five-year, fixed-rate mortgages for as low as 3.85% on a discounted basis -- the

lowest rate in Canadian history.

Mr. Tal did say mortgage refinancings have risen dramatically in the past few

months as Canadians who might have borrowed at 5.75% just over two years ago

are ready to eat any interest rate penalty because a five-year rate mortgage is now

so low.

The penalty to break an existing mortgage is the greater of three months interest

or what is called the interest rate differential. The interest rate differential is the

lost interest between your current rate and market rates.

Mr. Tal says while there is not much lower for variable-rate mortgages to go, the

gap between short-term money and long-term money is still significant enough

that the temptation is not to lock in.

John Turner, the director of mortgages at the Bank of Montreal says he's never

seen anything like what is going on in today's market.

"There is a possibility of another drop," says Mr. Turner. "But does your tummy

feel good about something that has a higher possibility of going up than going

down any further."

He is convinced these lower rates will boost the housing market. The 13.7%

decline in home sales in March was the smallest year over year decline in six

months. "I think there is a segment of the market that couldn't afford a home

before," said Mr. Turner.

Don Lawby, chief executive of Century 21 Canada, said while rates are declining,

banks are getting tighter with how they hand out credit.

"If you are self-employed, the banks are demanding more documentation.

Appraisals are getting harder too. It's not what you bought the house for but what

it's appraised for," said Mr. Lawby, who also heads up a mortgage broker

business. "There is not a lot of subprime out there for people with any credit

problems in their history."

For more information please contact:

Beata Kosc Sales Representative Re/max Ultimate Realty Inc., Brokarage

416-487-5131 or beatakosc@rogers.com