Thursday, April 16, 2020

The Bank of Canada reduced the prime rate to 1/4% on March 27, 2020 - this is all in response to COVID-19 crisis in a effort to help with reducing interest payments paid by Canadians during this crisis.

The Bank of Canada has reduced the bank rate twice in the past 30 days, both times by 0.5%.

The current overnight rate is 0.25%

As of April 16, 2020 the Bank Prime Rate (rate charged to average customer) was 2.45%

The Bank of Canada Prime Rate is currently 0.25% and the current Prime Lending Rate is 2.45% The Bank prime rate is typically about 2% higher than the overnight rate, but for the past few years the banks are not passing along this entire amount and this is why the current bank lending rate to their prime to customers is 2.45% 

The major banks in Canada typically charge their best customers 2% to 2.2% above the Bank of Canada Prime Rate. Today, it's 2.20% above prime, which means that the Bank Prime or Prime Rate that we see is now 2.45% 

Bank Prime Rate means "best" and this is the rate that banks charge their absolute best customers for loans, which is usually only other lending institutions.

Changes in the Bank of Canada prime rate influence changes in other interest rates, including variable interest rate mortgages. This "bank rate" rate fluctuates based on economic conditions.

Mortgage Interest Rates over time
Toronto Real Estate Board (TREB) Average Prices and Graph
Click Graph to see Average Prices over time

For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1
BUS. 905-828-3434
FAX. 905-828-2829

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