Bank of Canada rate

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

 

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.

 

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...!

 

i hope this makes the dollar drop vs the pound

 

bring the cut on

money in my pocket money in my pocket!

 

Can someone please explain how this affects Joe Sixpack?

i.e. Me

Thanks, I never get all this bank stuff.

 

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.

WOW

 

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.... If that actually happens, we could be saving nearly $500 a month!

 

^^^^^^^^
wicked news!!!!!!

 

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.

 

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

 

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

 

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

 

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?

 

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!

 

Drop what, their pants?

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

 

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

now that would be stupid.

 

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%.

 

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.

 

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.

 

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

 

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?)

 

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.

 

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.

 

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.