There have been three headlines this month that looked the same:
Bank of Canada lowers interest rate
That’s right, three times in ONE month. To be even more specific, three times in 23 days!
The first two rate changes were both 50 basis points, or half a per cent. So was the most recent one, on Friday, dropping the Bank of Canada’s overnight rate to 0.25 per cent.
After the first two rate changes, Canada’s five major banks cut prime lending rates by half a per cent, and that story was the same after the third one on Friday. That leaves the prime lending rate at 2.45 per cent.
What does that mean if you’re looking for a mortgage?
The jury is still out, but one analyst (ratehub.ca) pointed out that on home that cost $500,000, with a 10 per cent down payment, a 5-year, variable rate of 2.60 per cent amortized over 25 years could reduce monthly payments by $333 because of the latest rate change.