When the Bank of Canada (BoC) reduced its key interest rate by 25 basis points to 0.75 percent, it certainly was a bold move that made a lot of people sit up and take notice. At first, consumers were waiting hopefully for Canada’s Big Banks to drop their prime rates by the full quarter point on loans and mortgages, but that did not happen.
Instead the benefit of lower interest rates has only been marginally passed on to bank customers, who have seen a drop by 15 basis points. The spread between the BoC interest rate and the prime rate in Canada has increased by 10 bps.
Variable Rate Mortgage and Home Equity LOC Holders Saw Cut
Big Bank customers who already hold a variable rate mortgage or a home equity line of credit that is based on the prime rate, have been able to get a benefit from the change announced by BoC.
For other consumers who are interested in acquiring mortgage financing this spring, the recent interest rate cut underlines the fact that it makes sense to shop around and consider sources other than just the Big Banks when it comes to getting a mortgage. There may be an alternative lender who can offer a more attractive rate to someone looking to buy a new home or refinance a mortgage up for renewal.
If you are interested in looking at all of your options for obtaining mortgage financing, contact Mark Price, mortgage broker. He has relationships with a number of lenders and can shop the market for you to find the best rates and terms for your personal situation. Give him a call today!