The Bank of Canada, made a surprising decision today by changing their overnight lending rate. The BoC overnight lending rate is directly correlated to the prime lending rate. This surprising move was a decrease by 0.25%, which brought the overnight lending rate down from 1% to 0.75%. This was actually the first change since September 2010! The overnight lending rate has been stable for over four years, however the economic uncertainty, and the plummeting oil prices, is what the Bank of Canada attributes to their decision.
For over the last 4 years, while the BoC overnight lending rate was at 1%, the prime lending rate has been at 3%, normally a decrease in the overnight lending rate is matched by an equal decrease to Prime. We should find out within the coming days whether the banks decide to match the 0.25% and pass those savings onto the consumers.
This finalises this version of the Mortgage Monitor, please check teamlevine.ca regularly in order to find out how this move affects the Prime lending rate.