On January 2015, the Bank of Canada cut the prime rate by 0.25%. But the BIG SIX BANKS didn’t cut the Prime rate as they normally do. Instead, they waited a week… tried to justify why they couldn’t cut the rate… and finally caved in and cut it.. but ONLY by 0.15%.
That’s right, they pocketed the remaining 0.10%. And in case you haven’t heard, the BIG SIX BANKS have been posting record profits, year after year after year after year after year. In 2016, the 5 most profitable corporations were:
It took a full week for the Banks to cut their Prime rate. Public pressure was too much to handle. Now, you’d think they would have learned something from this. I mean, Canadians are a conservative bunch, but everyone has their breaking point.
Fast forward to July 2015. The Bank of Canada surprised the experts with another rate cut by 0.25% (not yours truly by the way, I was calling for a rate cut). And what did the BIG SIX BANKS do? Yup, you guessed it. They cut the Bank Prime rate by just 0.15% and pocketed another 0.10%. Are you kidding me?
The hypocrisy is too much. The Bank’s coffers are getting fatter with record profits while forcing us to accept a rate diet. Come on Canada, make some noise. This just isn’t right! Bank Prime should be 2.75%, not 2.95%.
Having said all this, I still like Variable rate over Fixed rates. 2.22% Variable sounds way better than 2.89% fixed. On a $300,000 mortgage, that saves you around$2300 per year. Stop and pause before jumping into Fixed rates. Remember who is winning and who is losing.
Want more advice? Speak with an unbiased professional. Speak with an experienced Mortgage Broker.
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Steve Garganis 416 224 0114 firstname.lastname@example.org