In a change of pace from the last rate announcement, on Wednesday the Bank of Canada dropped their overnight rate by 0.25%. This decision was in response to the recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada.
This is the first rate change we have seen since September 2010 (when the rates went up .25%). That’s a stretch of 4.5 years that we have benefited from a low prime rate on mortgages.
What does this drop in rate mean? A few things really.
1. We anticipate the banks will soon drop the prime rate to 2.75%.
2. Our clients with variable rate mortgages can take advantage of this low rate
Curious about how this drop may affect your current or future mortgage? I am always here to answer any questions you may have. Click here to leave your contact and I can direct you to one of my reliable mortgage specialists.
Macdonald Reatly Ltd.