Homeowners never had it so good before

Homeowners never had it so good before
With interest rates touching an all-time low in the last five decades, homeowners are all set to make hay, well up to a point of course. These low interest rates have turned renters into buyers, at least, in Canada. The banks are ready to waive off even the 5% down payment one has to make before buying homes.

This has happened, according to some financial experts, largely due to the arrival of foreign banks, such as HSBC, ING Direct and so forth which are based outside Canada. They are reportedly offering loans on low-interest along with high-deposit savings accounts. This has apparently forced the local Canadian banks to bring down their interest rates on home loans.

On the flip side, bankers also seem to be having a field day with more and more consumers applying for home loans.

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Even in Britain and other countries, mortgages are reported to be becoming cheaper. The interest rates on credit cards are also being reduced. This is because of the new regulations which have been instituted in order to reduce credit risk.

Ian Linnell, who heads the European bank coverage of the rating agency Fitch, feels that the implementation of Basel II rules in 2007 will make more banks join the race residential mortgage lending. Credit card interest rates are also expected to fall to an all-time low due to these rules.

"Under Basel II the residential mortgages sector is a real winner, and the main beneficiary will be the consumer," says Linnell. Basel II is expected to release an additional amount of ₤370 billion for lending by 2007 in Britain alone.