Fake Cheap, I'm kind of a peak oil doomer. ;) So I actually do think the economy and interest rates are going to stay low for the forseeable future. I think the low oil prices globally are from a global economic contraction in response to increasingly scarce and expensive resources. I think we're in a bit of a vicious cycle, where global economies slowed down from high oil prices, which slowed demand, which depressed oil prices. But now that prices are low, and are--for Canada and the US, anyway--below the costs of production, businesses are going to start also contracting (which we're already seeing in Alberta pretty dramatically, and I don't know about you, but I know a lot of BC trades people who have been working in AB for the last years who are going to be coming home looking for work that isn't there), causing layoffs, and decreased consumer spending. I expect this to slowly contract our economy this year, and I don't think that the US economy is going to be able to keep going crazy as more and more shale gas companies start laying off and going out of business, with ripple effects through to the stock market.
I don't know if this will all happen quickly or slowly, but I do think the recent BOC rate cut has the potential to be duplicated. I don't know how low mortgage rates themselves will go, but I'd rather be tied to the prime rate at this point.
I should add that part of all this is my experience over the last 7 or so years; we've been hearing forever that rates are going to start going up at any moment, and it just hasn't materialized. The reason we have 2 mortages is that we started with a variable rate on a condo that at one point went down to 1.75%! We wanted to hold onto it, so when we sold and bought our house, we just added a new one, as that rate was no longer available, lol. Anyway, we started with variable rates here again, and then when rates DID rise a little, we bought the hype that this was it, and rolled into a fixed at 3.65%. Guess what? That was the peak, and rates have only gone down, and now I'm stuck! ;) We did a "blend and extend" to bring the rates down a little, but that just stuck us with a fresh 5 year slate. So now I'd just love to have the flexbility back, and probably ride out the volatility for a while.
Hah--that was the long version! Thanks for the question.