All major banks have now lowered their prime rate from 3.0% to 2.85%. We were expecting them to cut their rate by .25% to follow the Bank of Canada but they have decided to take a more “balanced” approach. How does this affect you?
Variable Rate Mortgages and Lines of Credit:
Variable mortgage holders and clients with lines of credit will see their rate drop by .15%. Mortgage holders will normally receive confirmation of the rate drop in the mail within a month. Along with the rate drop, your payment will drop slightly but I suggest you keep the payment as is. The extra money will go directly towards the principal of the mortgage and payoff your mortgage faster.
Fixed Rate Mortgages:
This move does not impact clients with fixed rate mortgages. Your rate is locked in for the term. For clients looking to make a change to their mortgage in the near future, we are starting to see fixed rates trickle down a little bit, but nothing too significant yet.