The Connection Between Lower Interest Rates and Anti-Money Laundering (What?)
2024-11-14 | 07:14:54
The Connection Between Lower Interest Rates and Anti-Money Laundering (What?)
October 2024
Early this month, the Bank of Canada lowered its key interest rate by 25 basis points to 4.25 per cent. Hurrah! This is the third interest rate cut since June, and the first time the central bank has posted three consecutive reductions since the global financial crisis in 2009.
If lower interest rates prompt you to consider making your move, here’s what you should know:
- To avoid complications during the down payment verification process, it is advisable for you to consolidate funds into a single account ideally, well in advance of purchasing a home. This preparation should start 90 days before making an offer.
- The chosen account does not need to be a chequing account. If you’re concerned about loss of interest, the money can all be parked in a high interest savings account, or even a cashable GIC to maintain interest earnings.
- For both conventional and insured mortgages, you must ensure all of the down payment funds and closing costs are traceable and well documented.
Why Do Funds Have to be Traceable?
In short, to comply with Anti-Money Laundering (AML) regulations. The Canadian Government is serious AML compliance. Earlier this year, Global News reported “An internal report from Canada’s financial crimes watchdog (FinTRAC) found that most banking and real estate companies FinTRAC audited last year are not following the country’s anti-money laundering laws, sparking calls for greater oversight and higher fines.“
If you have questions about mortgage financing (and these days, who doesn’t?) connect with me, Tracy Irwin, Mortgage Broker. No strings attached, simply helpful information and mortgage solutions that open doors!
