News Articles
Kelleway Mortgage Architects
Bank of Canada
October 21, 2008
Glen's Summary. The Bank of Canada (BoC) did move rates this morning. It decreased the overnight rate (i.e., considered to be the wholesale rate of lending) which means that the prime rate also went down to 4.25% . The prime rate is what the BoC suggests that lenders use as their short term lending rate. BUT as we saw with the last coordinated rate reduction on October 8, even though the BoC reduced its rate by 1/2 percent, the major charter banks only reduced theirs by 1/4 percent.
So when you see a posted prime rate by the charter banks (e.g,, TD prime rate, Scotia prime rate or "your bank's name" prime rate) do not expect it to automatically match the BoC rate. At this time there are a few lenders whose prime rates do not match the current BoC prime rate.
highlights Expect most lender to have:
1) their new secured lines of credit at prime + at least 1%
2) all new floating rate mortgages priced at prime + 3/4 % or higher
PDF link to Bank of Canada Rate Announcement
Glen's Summary. The Bank of Canada (BoC) did move rates this morning. It decreased the overnight rate (i.e., considered to be the wholesale rate of lending) which means that the prime rate also went down to 4.25% . The prime rate is what the BoC suggests that lenders use as their short term lending rate. BUT as we saw with the last coordinated rate reduction on October 8, even though the BoC reduced its rate by 1/2 percent, the major charter banks only reduced theirs by 1/4 percent.
So when you see a posted prime rate by the charter banks (e.g,, TD prime rate, Scotia prime rate or "your bank's name" prime rate) do not expect it to automatically match the BoC rate. At this time there are a few lenders whose prime rates do not match the current BoC prime rate.
highlights Expect most lender to have:
1) their new secured lines of credit at prime + at least 1%
2) all new floating rate mortgages priced at prime + 3/4 % or higher