Toronto Real Estate News

Prime Lending Rate Lowered

As expected the Bank of Canada lowered the prime lending rate by ¼%. This is great news for variable rate clients. Prime is now at 4.5% which is considerably lower than the 5 year fixed discounted rate of 5.05% which is currently available.

With the spread between short and long term rates widening to the benefit of those with variable loans, this is a great time to consider refinancing using a variable rate product.

There are many variable products out there. Some offer prime less .60bps (basis points) and incorporate other features like teaser rates and cash backs. All of this can add up to significant savings over the term of the mortgage.

Over the past 5 years prime has averaged at 6.00%. Even if prime increased over the next 5 years, clients would still be ahead with a VRM mortgage. Prime would have to rise to 7.22% assuming a level increase over the 5 year period for the 5 year fixed mortgage, before it would be advantageous from a savings perspective.

For more information go to: http://www.mortgagecoach.ca

Susan Pimento
The Mortgage Coach
Phone: (416) 405-8698
Fax: (416) 690-3318
email: