Interest rates on mortgages and loans have been cut by local banks, following Wednesday’s move by the US Federal Reserve, which should make borrowing cheaper.
The US central bank said it was lowering rates for the first time in four years by half a percentage point, to reduce inflation while keeping unemployment in check.
Butterfield said it was following suit by cutting its interest rates for residential mortgages, consumer loans and corporate loans to 8%, from Friday.
Cayman National Bank also announced that it was cutting interest rates on lending to 8% also from Friday. No announcements have been made yet on interest rates on savings and investments.
Jerome Powell, Federal Reserve chairman, said the move was “strong” but that it was needed as price rises ease and job market concerns grow, according to a BBC report.
“We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with disinflation,” he was reported as saying at a press conference following the Fed meeting cutting the interest rate.
Mark McIntyre, managing director of CIBC Cayman and British West Indies, told the Cayman Compass that the bank was cutting its lending interest rates by 0.5 percentage points to 8%, effective from Monday. “It’s good news for borrowers, not such good news for investors,’ he said, adding he expected savings rates to come down over time.
The news will be welcomed by homeowners on flexible mortgages as well as potential buyers, as the cost of borrowing money should fall.
In the US, mortgages are now at their lowest level since early February 2023.
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