BMO wasted no time today in becoming the first big bank to announce it was lowering its prime rate by 1/2%.
BMO's press release came out just 2 minutes after the Bank of Canada's 9:00am ET announcement.
RBC, TD, CIBC, and Scotiabank followed a bit later in cutting their prime rates to 3.00% as well.
The move will naturally be applauded by borrowers. Canadians started a virtual riot the last time big banks didn't match the BoC's rate cut in December.
In BMO's case, the news may be tempered somewhat due to the recently reported increase in its line of credit rates. However, BMO's cut set the tone for the rest of the market so that's a positive.
interesting 5yr. rate change by BMO…
http://biz.yahoo.com/cnw/090120/bmo_mortgage_rates.html?.v=1
So much for the full .5???
Yes!
Terry the article you linked to references BMO’s 5-year fixed rate mortgage. The BoC announcement and subsequent rate cuts affects variable rate products only.
Terry,
Fixed rate mortgages are not tied to the BoC’s Prime Rate in the same way that Variable rates are.
See the many posts on this blog about the relationship between fixed rates and Bond yields.
Yes! more money in my pocket
Whoot!! I don’t remember who bashed 40 years mortgages, but mine is now reduced to 20 years within 9 months just from the rate drops!
Hey kyle I’m in the same boat but didn’t realize it until you said it. Haha.
Bob,
My point wasn’t any connection between the two but the fact that BMO was VERY fast to lower their 5yr. fixed to an interesting level given that prior to the rate announcement this morning, the rate was .3% higher.
Hey Kyle,
That is great!
Especially since there is NO chance that the rate will go back up again in the next 20 years! And since there is NO chance that when you refinance in 4 years you will have negative equity.:-)
Terry, good to see the 5 yr fixed rates are still coming down. Thanks for posting that.
Congratulations to everyone with a variable mortgage, especially to those of you with prime minus. Enjoy it while it lasts, just be very careful to watch for when prime starts to rise. If you need stability due to your income type or other reasons you will want to lock in before the rates get too high. A mortgage broker should have regular contact with you to update you on rate changes. Check out http://www.klickit.ca to find a specialist in your area.
Hi Dave,
It’s all a game everybody plays :) Also, its a 5 years game, not 20. Also, not every places depreciates in value u know? I can’t say I am immune, but its pretty good forecast 5 years time. 40 years was just a tool to be use by people who are able to use it anyway.
I just looked at ING variable rates over several years and it seems it was last lowered, from 4.5-4.3%, 5 days ago. Has anyone heard if ING is cutting their rate again due to yesterday’s BoC cut?
So far today I haven’t seen a new rate sheet from ING.