Bank prime rate reduced. Variable mortgage rates reduced.
Bank prime rate reduced. Variable mortgage rates reduced.
Most banks have made the announcement that following the earlier announcement from the Bank of Canada this morning that they were lowering their overnight rate by 0.75%, banks are lowering their prime rate by 0.50%, to 3.50% from 4.0%. As mentioned in my post earlier today banks may not match the full 0.75% reduction by the Bank of Canada as it has become more expensive for banks to lend their money out, thus, eroding their margins. So by them holding on to that 0.25% will help sustain their margins.
This reduction in the banks prime rates will affect those who have a balance outstanding on lines of credit and variable rate mortgages. Clients may either see a reduction in their regular payment or have more of their principal paid off with each payment depending how the bank handles a change in their prime rate.
For more information on this or any other related topic please feel free to contact me at any time at (604) 603-2520 or Maury@MauryLum.com.
