TORONTO - Several Canadian banks lowered their residential home lending rates slightly on Monday, dropping the posted rate on a benchmark five-year, fixed-rate mortgage by 0.15 percentage points to 6.1 per cent.
Royal Bank (TSX:RBC), National Bank (TSX:NB) and Scotiabank (TSX:BNS) announced the same decrease on Monday, which followed similar moves on Friday by Bank of Montreal (TSX:BMO) and TD Bank (TSX:TD).
The decrease, in all cases, apply to fixed-rate mortgages, which are set at the discretion of the banks and do not affect variable-rate mortgages, which are tied instead to a bank's prime rate.
That is set in relation to the key overnight rate set by the Bank of Canada and currently stands at an all-time low of 0.25 per cent.
Banks generally make special offers to preferred clients that will deviate from the posted rate, often undercutting it by as much as several percentage points, depending on the terms.
In the case of variable rate mortgages, a set amount of interest paid above or below the prime rate is usually set at the time the mortgage is signed.
The changes reflect recent interest rate drops in the bond market in the wake of the $1 trillion European bailout package to ease the continent's debt crisis.
No comments:
Post a Comment