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Bank of Canada rate

Discussion in 'TRIBE Main Forum' started by madnezz, Dec 9, 2008.

  1. madnezz

    madnezz TRIBE Member

    So they cut another 3/4 point today, making the BOC rate 1.5%, which is wild. Now let's see if the banks will follow... if they do, variable mortgages (like ours) are going to be practically free...

    Bank of Canada chops borrowing costs to 50-year low - CBC

  2. Chris

    Chris Well-Known TRIBEr

    Let's see how much banks pass the "savings" to the consumers, not much movement there. Only thing I have been seeing is reduced lending, tighter lending, and increasing interest rates amongst credit products.
  3. madnezz

    madnezz TRIBE Member

    Well, so far they have followed suit, although reluctantly. I think our rates are as they should be based on past cuts. If this one gets passed on to the consumer, we're going to be saving several hundred a month...!
  4. Bass-Invader

    Bass-Invader TRIBE Member

    i hope this makes the dollar drop vs the pound
  5. Incrimin8

    Incrimin8 TRIBE Member

    bring the cut on

    money in my pocket money in my pocket!
  6. Eclectic

    Eclectic TRIBE Member

    Can someone please explain how this affects Joe Sixpack?

    i.e. Me

    Thanks, I never get all this bank stuff.
  7. Teflon

    Teflon TRIBE Member

    If you have a fixed rate mortgage nothing will happen.

    Variable mortgage rates will be cut if the banks pass on the rate cut, which they should.

    I know someone with a 3.75% variable rate. If they pass on the cut it should go to 3 or 3.25.

  8. madnezz

    madnezz TRIBE Member

    Our two mortgages are variable and are currently 3.0% and 3.1%. If the rate cut gets passed on by the banks, we'll be down to 2.25 and 2.35.... :eek: If that actually happens, we could be saving nearly $500 a month!
  9. Chris

    Chris Well-Known TRIBEr

    wicked news!!!!!!
  10. Mrs. Pink

    Mrs. Pink TRIBE Member

    we'll see, i doubt if banks will be willing to cut rates again. it would be great for consumers, but i'm just not sure if banks will be inclined to cut rates again......hope they do, my virm mortgage is already below 3%.....be nice to have another cut.
  11. OutcastTO

    OutcastTO TRIBE Member

    It's looking like the banks might drop their rates .5 percent...which is still pretty nuts.
  12. madnezz

    madnezz TRIBE Member

    yeah, TD has agreed to a half point cut, which is pretty good.
  13. justin surdit

    justin surdit TRIBE Member

    When VRM's drop, try keeping your payments the same. Helps pay down the mortgage.
  14. kyfe

    kyfe TRIBE Member

    That's a pretty sweet rate, I have a variable and we're locked in till April 09 (rate locks every 6 mths) @ 4% as our rate renewed on Oct 1 when the banks prime was 4.75. We've been ahead of the game over the past 4 years so i really cannot complain.

    I'm trying to find a way to get the bank to drop it before April, but I'm not having much success.

    any suggestions?
  15. DJ Doublecross

    DJ Doublecross TRIBE Member

    Yeah I thought the payments stayed the same no matter what? Or maybe I chose to set mine up that way, I forget.

    If RBC agrees to cut a half point as well, I may consider locking in!
  16. kuba

    kuba TRIBE Member

    Drop what, their pants?

    They can't unfortuantely. But moving forward while rates are rising yours will also be locked in.
  17. kuba

    kuba TRIBE Member

    Locking into what? a 5 year fixed at 5.5% or so?

    now that would be stupid.
  18. DJ Doublecross

    DJ Doublecross TRIBE Member

    Isn't the fixed rate tied to Prime as well? If the lending rate is 3.5%, would fixed be as high as 5.5? I haven't looked into it.... my open variable rate is Prime -0.25%.
  19. kyfe

    kyfe TRIBE Member

    that's the way it's been explained to me. I'm now trying to use it as a point of leverage for future negotiations and to have them address the silly fees they charge for my direct investing account. hopfully I can get something more out of them. We are now in the open period of our mortgage so maybe there is another way?

    BTW thanks again for hooking us up, you've saved D & I thousands.
  20. madnezz

    madnezz TRIBE Member

    The fixed rates are not tied to prime which is why they're whatever the banks want them to be.

    Fixed rates have been going up and up while variables have been dropping.
  21. Subsonic Chronic

    Subsonic Chronic TRIBE Member

    For real. Take advantage of the opportunity to pay more on the principle.
  22. kuba

    kuba TRIBE Member

    kyfe, you are just a number, nothing more

    If you had $M in assets, maybe they'd do it

    but otherwise regular dudes like you and I don't matter and no, they won't get out of their agreement til april 09 (is that when your deal expires or when your rate freeze does?)
  23. DJ Doublecross

    DJ Doublecross TRIBE Member

    Ah that makes sense. For some reason I thought the fixed was still tied to prime (but Prime +% obviously) and whenever you lock in, you stay at that rate for the whole term. So if Prime became very low, you could lock in at a fairly low fixed rate. I suppose that wouldn't make much sense for the banks though.
  24. kyfe

    kyfe TRIBE Member

    I hear you but it can't hurt trying, I know the mortgage isn't going to change till April and that's cool because although I take a shortfall now I will make it up when it locks again so it's really good protection to have.

    the freeze is up in April 09, the Mortgage in October 09 at which point I may consider locking in. It's far to early right now and if there's another drop in the new year I don't want to miss that benefit.

    however I'm still suprised fixed rates are over 5%. once they hit 4% if it happens is when I'll give locking in a serious look.
  25. kyfe

    kyfe TRIBE Member

    Rob, it's tied to the BANKS prime lending rate which as someone said is usually a point or two higher than the bank of Canada, or at least that's my understanding of it.

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