Prime Lending rate decrease! Word is in and all variable rates have decreased! This is the first time in over 4 years, that we see a change in the Prime lending rate! We have now seen the outcome of the latest Bank of Canada decrease to their overnight lending rate. Now even though this is great news for homeowners and future home owners who have or will have variable rates, there is one thing to take note of. The banks have decided not to match the BoC 0.25% decrease, which is an uncommon practice.

Usually the Banks match the change to the overnight lending rate – which was decreased by 0.25% less than a week ago. However this time, the Banks have decided to pocket some of this decrease, by only offering the consumers a 0.15% decrease to the Prime lending rate. Mortgage rates have been quite low in Canada for over five years, and the interesting thing is, is that just when you think mortgage rates have hit rock bottom, they continue their decent even further. The Banks have therefore decided, that it won’t be profitable to match the 0.25% discount, and that is the reason why the Banks have not passed the full savings onto their clients.

Any decrease is welcome, and if you’d like to know what this means for the variable rate that you currently have, or may start to consider the advantages of a variable rate mortgage, then give Team Levine a call! We’ll be happy to answer all of your questions, and navigate you through the pros and cons of the variable mortgage rate!