On March 27, Bank of Canada announced that it is cutting interest rate by 50 basis points to ¼ percent. The decision to cut rates was taken due to the abrupt decline in world oil prices and COVID-19 economic pressures. After the rate cut, the bank rate is ½ percent and the deposit rate is ¼ percent.
In response to the rate cut, Canada’s Big Banks have announced that they are reducing Canadian prime lending rate by 50 basis points from 2.95 per cent to 2.45 per cent.
New Canadian prime lending rates
- CIBC: 2.45 per cent effective March 30, 2020.
- BMO Bank of Montreal: 2.45 per cent effective March 30, 2020.
- Toronto-Dominion Bank: 2.45 per cent effective March 30, 2020.
- Scotiabank: 2.45 per cent effective March 30, 2020.
- RBC Royal Bank: 2.45 per cent effective March 30, 2020.
- National Bank: 2.45 per cent effective March 31, 2020.
Mortgage Rates – March 30, 2020
- TD Mortgage Prime Rate: 2.60%
- BMO Prime Mortgage Rate: 2.450%
- RBC Prime Rate: 2.45%
What this means to you:
If you have a home equity line of credit, your interest payments will reduce as the rates are pegged at the prime rate plus a margin. For example, if your line of credit is Prime +0.15%, then effectively from Monday, your new rate will be 2.60 per cent from 3.10 per cent.
If you are under the variable mortgage plan, then your monthly mortgage will reduce depending on the rate of each bank’s prime rate. TD Mortgage Prime Rate is 2.60% down from 3.10% on March 29.
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