The Bank of Canada slashed its key interest rate by three quarters of a percentage point to 1.5 per cent this morning -what does that mean for us? First off it doesn't mean anything in terms of your credit card interest rate --those are going up. Most have jumped by one percent or so.

Car loans or mortgages could be lower -- but not necessarily. If you were looking to buy a home and can now "just" get in with the lower rate I'd caution against it. You may not be able to afford the home when interest rates go back up. Think long term.

You might wonder why if the Bank of Canada rate is 1.5 percent -why you can't get a longer term mortgage for much less than 4. Fixed rate mortgages are in a different market -- rates are determined by how much a bank has to pay to borrow the money to lend you over the length of the term. Variable rates will reflect the drop -- you might see variable mortgage rates in the 2.5 to 3 per cent range.

Benchmark interest rates haven't been this low since 1958, so if your mortgage is coming up for renewal in the next six months, keep a close eye on the rates it may be worth renewing early. If you have a variable rate -- use the savings you'll get with a lower interest rate to dump more money against your principle. With many variable mortgages this is automatic.

When you renew your mortgage -- if the interest rate is lower --don't fall into the trap of taking a lower payment. This is critical. To get the full advantage of lower interest rates - you must keep your mortgage payments the same. If you reduce your payments to reflect the lower rates - you will waste some or all of your potential savings.

The lower rates may make it hard to find bargains in real estate. Many developers have been lowering prices to boost sales. As mortgage rates fall -- developers may stop dropping their prices. They won't have to give buyers a deal because lower rates do the work for them -- and make buying more affordable. Bottom line for buyers -- to take full advantage of falling house prices and lower interest rates you need to bargain hard -- with the home seller on price, and with your bank on your mortgage rate.

With a report from CTV British Columbia's Chris Olsen