BOC drops rates 1.50% in 4 weeks
For the 3rd time this month the Bank of Canada has reduced the overnight rate by 0.50%. For variable mortgage (and line of credit/loan) holders, watch lender communications for reduced prime rates.
The overnight rate is now at 0.25% … very close to zero. If these rate drops continue will we follow Europe who has negative interest rates? Steven Poloz rejected the idea saying that the Bank has no intention of cutting rates any further.
Prime rate started the day at 2.95% (for most lenders), and by the end of the day lenders had already announced their reduced prime rates. Prime rate now sits at 2.45% with most Canadian mortgage lenders.
Read the Bank of Canada’s full release here: BANK OF CANADA ANNOUNCEMENT
The Bank of Canada rate drops are mainly benefiting all existing variable rate mortgage holders. Those looking for new variable rates should act fast as banks have been removing the discounts off of prime.