Carry trade is a trading strategy that involves
borrowing at a low interest rate and investing in an asset that provides a higher rate of return.
Another may view pulling cash out of home equity as a way
borrowing at a lower interest rate than he or she could get with a personal loan.
Because mortgages are traditionally the least expensive form of borrowing (because the loan is secured by your house), you might be able to
borrow at a low interest rate to repay your higher interest rate credit card and other debts.
A TD Investment Secured Line of Credit uses your eligible investments as security so you may be able to
borrow at a lower interest rate than on an unsecured line of credit.
A registered mortgage will generally allow you to
borrow at lower interests from both the private and banking sector.
When the aforementioned funds rate is held low, banks have more money they can readily lend and consumers can
borrow at lower interest costs.
If you qualify, you may be able to
borrow at a low interest rate to repay your high interest rate debts, such as credit cards.
Not exact matches
The
low -
interest - rate environment has allowed it to
borrow to fund operations
at levels that are about half the 10 percent
interest rate the company paid for its financing more than a decade ago, says Clark Balderson, the company's chairman and chief financial officer.
It's not as if it's expensive to
borrow and invest, what with
interest rates in both countries
at near all - time
lows.
But what many fail to consider is that when ordinary Canadians are unable to afford real estate — even when
borrowing at unusually
low interest rates — the market will adjust.
The case for
lower interest rates is weaker, but most forecasters still expect the Bank of Canada will wait
at least a year to raise
borrowing costs.
With
interest rates
at sustained record
lows, there has never been a better period for governments to
borrow money to pay for new transit, schools and hospitals — an opportunity the U.S. government has mostly missed.
This is because most private student loan lenders offer extended repayment plans and variable
interest rates that seem
lower at the onset of a loan refinance, saving borrowers money on their monthly payment as well as on the total cost of
borrowing over time.
So why are all political parties afraid of
borrowing money
at historically
low interest rates to pay for needed infrastructure spending that might actually pay for itself through higher productivity and higher income, without any cost to the taxpayer?
Achievement of these goals was considered by the HRC as very challenging, even aggressive, given the expected modest economic growth for 2007 for the financial services industry, the impact and duration of the on - going flat / inverted yield curve (meaning short - term
interest rates that are virtually equal to or exceed long - term
interest rates, thus
lowering profit margins for financial services companies that
borrow cash
at short - term rates and lend
at long - term rates), potentially higher credit losses, fewer available high - quality, high - yielding loans and investment opportunities, and a consumer shift from non-
interest to
interest - bearing deposits.
So why are all political parties afraid of
borrowing money
at historically
low interest rates to pay for needed infrastructure spending that could pay for itself through higher productivity and earned income, without any cost to the taxpayer?
Why shouldn't a government
borrow to make new investments when ten year, thirty year, and fifty year
interest rates are
at historically
low levels?
«The biggest challenge is delevering, but it presents the opportunity of
borrowing at a
lower rate of
interest,» Gross said, noting that investors must be sure that the assets they're buying this year are creditworthy and present
low risk exposure.
The federal government can
borrow at a much
lower interest rate than the other jurisdictions, given its strong credit position.
Mr. Buffett singled out a driver of the acquisition boom: Acquirers could
borrow money
at low interest rates to finance their deals.
Today, they reflect the flow of international
borrowing where
interest rates are
low and lending
at a markup where credit is tight — and then hedging this arbitrage, and jumping on the bandwagon to speculate on which way currencies will go.
[303][306] In January 2012, the U.S. Treasury
Borrowing Advisory Committee of the Securities Industry and Financial Markets Association unanimously recommended that government debt be allowed to auction even
lower,
at negative absolute
interest rates.
Thus, if we look
at bonds from a historical perspective,
interest rates are very
low — which is great for those
borrowing money — but not so great for those that wish to see higher rates of
interest, and return, on their money.
Bernanke publicly acknowledged this week a policy conflict with the Treasury over its move to lock in
low borrowing costs, which is working
at odds with the central bank's efforts to
lower long - term
interest rates.
Whereas in most markets an increase in short - selling puts pressure on the lending market and pushes up the
interest rate
at which short - sellers can
borrow the underlying stock, the ready supply of gold loans from central banks seeking to earn some return on their gold holdings has, until recently, helped to keep lease rates
low, generally in the range of 1 — 2 per cent (Graph B3).
These involve the investor
borrowing at the short end of the yield curve, particularly in those countries where rates have been very
low, such as the United States, Japan and Switzerland, and investing either further out along the yield curve or in countries where
interest rates have been relatively high, such as Australia and the United Kingdom.
Although I don't pretend to understand all the «ins & outs» of banking, public financing, etc., it seems to me to be self - evident that if Canadian governments
at all levels were able to
borrow,
at low or preferably no
interest rates, to finance infrastructure projects and other issues such as health care and education, rather than indebting Canadians in perpetuity in order to pay big
interest payments to the greedy Big Banks, it would ultimately be in the best
interests of most ordinary Canadians.
This is evident in a number of developments, including: increased demand for higher - risk assets; the increase in «carry trades» — a form of gearing where funds are
borrowed short - term
at low interest rates and invested in higher - yielding assets, often in other countries; growth in alternative investment vehicles such as hedge funds; and growth in alternative investment strategies such as selling embedded options (see Box A).
Selling gold short has therefore been an alternative to the «yen - carry» trade which saw market participants fund investments in various markets by
borrowing yen (
at almost zero cost due to the
low interest rates in Japan) and selling it for other currencies, mostly US dollars.
It has turned its debtor position into a lever,
borrowing at no
interest charge (to the extent that its currency circulates abroad) or
at low interest (mainly from central banks in countries that have no other use for their surplus dollars.
When the pace of inflation eases over a longer period and
interest rates are still
low, this is a good time to
borrow at a
low cost.
Companies that hold passive investments can generally
borrow funds
at lower interest rates than would otherwise be the case.
Debt consolidation.If you're struggling with credit card debt,
borrowing against your equity can be extremely attractive because of the
low interest rates — much
lower than any you'll find on a credit card — using a HELOC to pay off other debts will give you an easy single payment
at low interest rates.
The banks are trying to win back their losses by arbitrage operations,
borrowing from the Fed
at a
low interest rate and lending
at a higher one, and gambling on options and derivatives.
The federal government would
borrow on behalf of this Crown Corporation by issuing 30 - year bonds
at historical
low interest rates (around 2 %).
The Liberals embraced the recommendations of many economists, including ourselves, that with a sustainable fiscal situation, they could strengthen long - term economic growth by undertaking infrastructure spending financed by
borrowing at historically
low interest rates.
However, he said, «even
at lower rates, the amounts you
borrow to pay for school can mean that you pay thousands of dollars extra in
interest.»
Thanks to mortgage
interest rates coming down for 30 + years, qualified real estate investors can
borrow money
at 30 + year
lows.
Now we are seen as one of the safe havens — able to
borrow money
at lower interest rates than
at any time in our history.
«They also look
at interest rates, and we are currently
borrowing money
at some of the
lowest interest rates in British history.
«Today, Scotland has a currency which takes into account the needs of Scottish economy as well as the rest of the United Kingdom when setting
interest rates and it can
borrow at rates that are among the
lowest in Europe.»
«Everything runs smoothly as long as we keep on
borrowing ever more money... To keep people buying
at ever higher prices requires even
lower interest rates.»
Those who argue we should spend more want us to
borrow more, driving up our deficit and our debt and putting our hard - won credibility and
low interest rates
at risk.
ILDC also issues tax exempt debt which allows local non profit and governmental organizations to
borrow funds
at a
lower interest cost.
Mr. Cuomo's budget proposal would let municipalities and school districts address rising pension costs by
borrowing more now — which will mean paying more later on, as
interest rates, now
at historic
lows, are sure to rise.
The university has a better credit rating than the state, which means it can
borrow money
at a
lower interest rate.
The refunding, which is similar to refinancing a home mortgage, pays off existing debt by
borrowing money
at a
lower interest rate.
(Yet,
at today's
low interest rates for municipal bonds, this would be the perfect time to
borrow the money to make that investment.)
This means you will be able to
borrow more money
at a
lower interest rate.
Someone with a good credit report will be offered the
lowest interest rates on loans and credit cards, while people with bad credit reports will face high rates, if they're able to
borrow at all.