Prime Rate Falls to 2.95%, Some Banks Increase Variable Premiums + MORE Mar 20th

There have been many changes lately and there will be many more to come. As this is a critical and fast-moving situation, I wanted to get these updates out and will be updating you regularly as we all work through this.

We’ve all heard about the Bank of Canada rate cuts.  Two one-half percent rate cuts in less than two weeks. Unprecedented. And while common logic would dictate that mortgage rates would fall, that’s not exactly happening.

Bank stocks are down about 30%. Investors are worried. When investors get worried the banks look to increase their profit margins. This isn’t anything new. Forget about posted mortgage rates.. I’m talking about the actual rate you get when you negotiate your mortgage.  We call these wholesale rates.

Wholesale mortgage rates have increased by between 0.3% and 0.5%.  Variable rate pricing has also increased. Let me explain. Bank prime rate has gone down from 3.95% two weeks ago, 2…

Canada’s big banks announced this week that those struggling due to the COVID-19 crisis will be able to defer their mortgage payments for up to six months. The coordinated announcement came from the Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank and TD Bank, and will be granted on a case-by-case basis to assist those disrupted by the COVID-19 pandemic. “These measures are an important first step and underscore the resilience of Canada’s financial system and […]

For the second time in two weeks Canada’s prime rate has fallen by 50-percentage points. Following the Bank of Canada’s emergency rate cut on Friday, RBC led the way in passing along the full 50 bps of rate cut on Monday, with most of the other big  banks soon following suit. That lowered the country’s prime rate—which is the basis of all floating mortgage rates and lines of credit—from 3.45% to 2.95%. “Central banks are providing low cost funding (by […]

Welcome to today’s update.  

Canada and the banks announced a six month deferral of mortgage payments.  I have been fielding many calls on how this works and the answer is different for each financial institution.  I will be posting updates as they become available. Some of the financial institutions have not yet come out and said they will give a full six months of deferred payments, while others have. It’s still early but I will keep you informed as the details roll out.

Another update on the rates. Fixed rates are up again slightly. Variable rate pricing for new applications has increased as well. Most financial institutions are now offering variable rates at prime (Prime: 2.95%) or just minus .05%. No surprise as stock market jitters is spooking everyone.

This will pass and we will come out okay on the other side of this. That’s my message.  We’re all in this together and we will come out of it together. Call or message me if you need anything…