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PostPosted: Wed May 25, 2016 9:13 am 

Joined: Fri Feb 01, 2008 2:35 pm
Posts: 527
After predictions of a potential rate cut by the spring, it's seeming almost certain that this will not be happening. The Bank of Canada announced this morning that they will be maintaining their overnight rate, which is the rate prime is based on. The announcement came at 10am this morning. (May 25th). This comes as no real surprise.

For now, the prime rate remains 2.70%.

The discounts off prime have been shrinking since late summer, however you can still get a variable rate as low as prime -0.55%. Most banks are have started to increase their discounts, however they are still only at around prime -0.30%. Pretty big gap.

Prime rate and fixed mortgage rates are unrelated. While variable rate mortgages and lines of credit are affected by prime rate, fixed mortgage rates are determined by bond yields which have declined steeply since the beginning of the year.

5 year fixed mortgages have now fallen as low as 2.39%

You can read the announcement here: http://www.bankofcanada.ca/2016/05/fad- ... 016-05-25/

The next interest rate announcement will be on July 13th, 2016

Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)

Follow me on Twitter! http://www.twitter.com/paulmeredith

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