Bank Of Canada Cuts Interest Rates
The Bank of Canada has cut its interest rate three times in March 2020. Each rate cut was 50 BPS (half a percent).
That is cool and all but what does that really mean to you? How is this going to impact you? Will your mortgage rate change?
The Nuts & Bolts
- It means that lenders will typically also lower their PRIME rate
- Right now this is PRIME rate only – what does that mean?
- It means that if you have a variable rate mortgage your rate (and monthly payment) is going to go down
- On average it will equal about $27 for every $100,000 of mortgage money that you have for every 50 BPS that the rate lowers
- What if I have a fixed rate?
- Right now this does not impact you
- Your rate is the same
- This is PRIME rate only
- My lender hasn’t lowered their prime rate yet?
- Banks are often the first to lower their rates
- Most banks currently have their prime set to 2.45%
- Monolines (RMG/MCAP/First National/Street Capital/RFA…) are often slower to respond
- Many Monolines are just now lowering their prime rate (effective April 1st) to 2.45%
- We expect Monolines to also pass along interest rate cuts but they are almost always slower than the banks
We Are Always Watching The Rates
This means we will always get our clients the absolute best possible and sharpest rates available. If you have any questions and would like to discuss your mortgage specifically please give me a call. I always return my calls within 90 minutes and would love to hear from you.