"Borrowers should think carefully about their personal risk level given the pros and cons between fixed and variable rates," said Rangasamy. "An option that borrowers can consider is diversifying their debt portfolio by using a combination of fixed and variable rates. This allows them to benefit from both types and to spread their risk over different time periods. For example, a borrower could have a variable rate loan for a short-term project, and a fixed rate mortgage for a long-term investment."
However, diversifying also adds complexity to managing multiple loans or mortgages, and may require more attention and monitoring. Therefore, borrowers should consult with their financial advisors and lenders to find the best solution for their specific situation and goals.
Rangasamy said that the interest rate cut is a good opportunity for farmers, agribusiness operators and food processors to take advantage of the lower borrowing costs, but he also cautions them to be prudent, and to have a contingency plan in case of unexpected events or changes in the market.
"There are still risks with regards to both the global and domestic economies which, if they materialize, can have repercussions on Canada's inflation and therefore interest rates. That's why it's important to stay informed, stay flexible and stay prepared," Rangasamy said.
Learn more about interest rates by visiting FCC. Producers who want to review or establish their financing strategy can contact the nearest FCC office at 1-800-387-3232.
By sharing agriculture and food economic knowledge and forecasts, FCC provides solid insights and expertise to help those in the business of agriculture and food achieve their goals. For more economic insights and analysis, visit FCC Economics at fcc.ca/Economics.
FCC is proud to be 100 per cent invested in Canadian agriculture and food. Our employees are committed to the long-standing success of those who produce and process Canadian food. FCC provides flexible financing and capital solutions, while creating value through data, knowledge, relationships and expertise. FCC offers a complement of financial and non-financial products and services designed to support the complex and evolving needs of the industry. As a commercial Crown corporation, FCC is a stable partner that reinvests profits back into the industry and communities it serves. For more information, visit fcc.ca.
Source : Newswire.ca