Borrowers got what they were asking for. It just wasn’t as big as they were asking for.
The major banks cut their prime rates by just 15 basis points today, to 2.85%. It’s the first time ever that Canada’s official bank prime will have changed by less than ¼% (at least back to 1935 when the Bank of Canada started publishing this data).
RBC showed leadership by being first out of the gate with its prime rate announcement. Then came BMO 50 minutes later, follow by the rest of the pack.
This all comes after TD Canada Trust worried borrowers last week, telling them it wouldn’t cut prime rate at that time.
With continued talk of Canadian housing imbalances, the evolving oil shock and the Bank of Canada’s surprise rate cut, there’s been no shortage of opinion on the consequences for borrowers.
For those who might have missed them, below are two related articles from www.Bloomberg.com that include comments from CAAMP President & CEO Jim Murphy:
Wait a minute. Weren’t rates supposed to go up this year?
If it wasn’t embarrassing enough to be a rate forecaster before, it is now. Today’s surprise Bank of Canada rate cut proves for the umpteenth time that “experts’” long-term rate predictions are not only futile, but potentially costly.
Here are 5 things to know about the Bank of Canada’s policy move:
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Lead generation is the name of the game when you’re trying to grow a mortgage business. But leads are expensive, so when someone creates an innovative way to generate inexpensive prospects, it’s worth a look.
Centum, one of the top mortgage broker franchisors in Canada, says it has just that. It launched its “15-Minute Mortgage” widget today to all of its 2,300+ agents. The Web-based interface (one of the first of its kind) lets a homeowner pre-qualify themselves in just minutes.
Here’s how it works…
This has been one spectacular swan dive in the 5-year Canadian bond yield. We ended Thursday at 1.01%, an all-time low and just a “beep” above the psychological threshold of one percent.
If you’ve been watching this waterfall in yields over the past two months, you may well be wondering, “If bonds lead fixed mortgage rates, when will we finally see some rate love from lenders?”
In the past, when long-term yields have moved 15-20 basis points, lenders have adjusted fixed rates accordingly. But today is a different world. The banks, which control over three-quarters of the mortgage market, will be “ruthless” at protecting earnings, analyst Peter Routledge told the Financial Post.