The Bank of Canada has matched economists’ forecasts and dropped rates again, this time by 1/2%.
Even better, Canada’s big banks have acted quickly to match the cut. BMO chopped it’s prime rate to 2.50% just one minute after the BoC’s announcement. RBC matched the cut 3 minutes later.
In its prepared statement today, the Bank of Canada said this:
- It has seen “weaker-than-expected activity in major economies” since January.
- There’s been “a sharper decline in Canadian economic activity” than the BoC “projected.”
- Canadian economic output might not start improving until “early 2010.”
- The effects of prior rate cuts will likely kick in during the 2nd half of this year.
The BoC left the door open for another rate cut, saying:
“The target for the overnight rate can be expected to remain at this level or lower at least until there are clear signs that excess supply in the economy is being taken up.”
Like in its previous statement, the Bank said it will carefully judge “to what extent further monetary stimulus will be
required to achieve its 2 per cent inflation target in the medium term.”
The Bank also suggested it has other tools besides rate cuts to jumpstart Canada’s economy. “In its April Monetary Policy Report, the Bank will outline a framework for the possible use of such measures.”
Here is the complete text of today’s announcement.
Canada’s key lending rate has now fallen 4% in the last 15 months. It now sits at an all-time low of 0.5%.
The Bank of Canada’s next interest rate meeting is April 21, 2009.
Last modified: April 29, 2014
CIBC matches as well…
http://www.newswire.ca/en/releases/archive/March2009/03/c5389.html
Wow. Super fast. (9:02am)
Rob it looks like you had this post ready to go way before 9am and must have been pounding refresh on CNW. 1 minute BMO, 4 minutes RBC. LOL. Now CIBC as well.
You got it Jim. Our F5 key is almost broken.
Nothing prepared–just lots of updates since 9:02.
TD drops too…
http://www.newswire.ca/en/releases/archive/March2009/03/c5394.html
But look what you’ve done. Now people will be looking to CMT as the place to go for up to the second prime rate news after a Bank of Canada FAD decision. No pressure. Good job.
Jim
Remember National uses Marketwire not CNW.
They just went.
http://www.marketwire.com/press-release/National-Bank-Financial-Group-TSX-NA-956588.html
Nice, great news!
Thanks for the update!
1.5% intrest im paying…
on my 20 year 325000 mortgage for 20y is now at 11 years, i hope i get prime -1 in 5 years again
Scotia is late to the party. Hopefully they show up.
Yeah, another couple thousands in my pocket!
If only it was more than my stock losses I’d be even happier
Scotiabank is always late to the party with interest rates.
Scotia has also cut 1/2%…
http://cnw.ca/en/releases/archive/March2009/03/c5448.html
Prime rate at all 6 big banks is now at 2.50%.
I’m so glad I didn’t lock in back in July when some people said the sky is falling (when I can lock in at 5%) :D Prime will have to jump up to 5.5% (3% increase) before I’m paying that much. Don’t know how fast that will happen, but I’m sure paying down my mortgage a lot faster than I anticipated!
Defintely good news and its creating some good cash flow I can use for maintence updates to my properties that I wouldn’t have considered otherwise.
So… anyone has a good advice for someone who needs to sign a mortgage right now? Fixed or Variable?
1 Year fixed. In a year, it’s likely the good variable discounts will be back.
Bank offer me 5 years fix rate with 2.69 for 2 years, rest of 3 for 4.69. it’s good to sign?
which bank is that?
what is the going 5 year rate on the street with discounts?
depends on the borrowers qualifications and the features they want
here’s a starting point if you’re well qualified:
http://www.globeinvestor.com/servlet/Page/document/v5/data/rates?order=a&pageType=mortgage_closed_short&sort=IR5YR&page=0
i was able to get 4.04 not sure if i should lock in tomorrow or not!
When it comes to mortgages greed is bad. If you have a great rate lock it up.
which banks are offering 4% 5 yr lcoked?
I have mtg with Scotiabank @4.85 fixed and 3.5 years remaining. I requested bank to caculate penalty if I pre-pay 100,000.Here is Manager’s asnwerS;
Please be advised that if you prepaid $100,000 today against the subject
mortgage the pre-payment penalty would be $4137.61. This is based on Interest Differential calculations outlined in your Cost of Borrowing Disclosure Statement you received when you signed for the mortgage in 2007.
The replacement mortgage rate used is the 4 yr posted rate (5.69% today) minus the discount of 1.99% you originally received on your mortgage.
I hope this answers your question. (Please note that mortgage rates can
change at any time, and such changes may increase or decrease this penalty
figure.)
Do I have any option to get benefit of low prime rate ?
Hi Everyone,
Thanks very much for posting.
As a general policy, CMT avoids making borrower-specific recommendations in the forums. There are too many details that need be discussed before suitable recommendations can be provided.
For any questions specific to your personal situation (like should I refinance?, should I go fixed or variable?, etc.) you may be best served by calling or emailing a mortgage planner you trust. You can often get the answers you require with just a brief phone call.
For more general questions we’re always happy to oblige–time-permitting!
Cheers,
Rob
We have a great variable rate of prime MINUS 0.6 I am in love with my rate but nervous about not locking in since I can get a 5 yr rate of 4.39 %… any suggestions on what to do ?
I was offered the 4.39 last month from CIBC before the rate drop…….
I have papers being sent to me for 4.25 5 year fixed. On a renewal that officially begins in June. I am happy with 4.25 but wonder if it could be lower given this announcement….
ING is posting 4.15% so every bank should be able to match that.
Does anyone predict another rate drop in late April or do you think fixed as gone as low as possible?
CanEquity has much lower rates then ING. They are posting 4.09%
http://www.canequity.com/
Everyone has that rate and some brokers have much better.
I am transferring away from broker due to the fact they always want to charge something for any simple request. The bank I’m dealing with is agreeing to waive appraisal, legal, fees for a home equity credit line etc. I’ll ask for the 4.09 but they might not be able to go that low in combination with the rest.
Judy any broker worth their salt can easily beat that. You’re probably talking to the wrong broker or are quoting old information.
No because I am switching and they are covering all fees.
I actually ended up with 3.99 but the bank couldn’t match. I really wanted to switch and get my home equity credit line (at prime)but I went for the 3.99.
Hi Judy
You can still get a readvanceable LOC with a fixed rate for under 4%. Any broker should be able to find it for you.
The LOC rate is around P+1% or so however. No one has prime on LOCs anymore.
Pete
I do have a credit line with a good rate (prime + 1) but RBC was offering prime to me, it’s a secured line of credit (Home equity line of credit). THey were also absorbing the costs to secure it which is one of the reasons they couldn’t come down in the rate.
I actually checked with RBC and what they told me: “We haven’t offered the HELOC at Prime since October 15 2008”!
im scared of buying a place right now because i can barely afford the 4.3 interest rate i was given , but what happens after five years when my term is up , does anyone forsee the interests rates to go up, after five years ? because of the econmic slump?
Hi Calvin,
In that case there’s a good chance you shouldn’t be buying. Home ownership is great but not if it entails financial worry. Talk to a good mortgage professional and tell them your concerns. There’s definitely a chance that rates could be higher when your term is up.
-Rob
I have it in writing the entire offer from RBC .. I can’t speak about what others were offered .. hwoever, I decided to stay with present lender due to the 3.99%.
Judy,
I am confused!
A HELOC @ P would have given you a 2.50% rate (at today’s prime).
I tried to follow your posts, and it sounds like you went with a HELOC @ P+1 which theoretically should put you at a 3.50% rate.
However, you say that you ended up with a 3.99% rate!
Am I missing something?
I called another RBC mortgage specialist and he again said that there are no HELOC’s being offered at Prime, only at Prime + 1.
Which province are you in? Maybe that plays a role in all of this!