Why Mortgage Posted Rates Are Still So High?
By ebizniz on April 4, 2008 - 4:54pm
Since June 2007 when Canadian Prime rate was raised from 6.0% to 6.25%, the credit seized-up in August forced the central banks of Canada to ease-up and cut interest rates from 6.25% in November 2007 to 6.0% in December followed by a further cut in January to 5.75%.
Canada followed the US aggressive cut in interest rates last month and made another rate cut from 5.75% to 5.25%. The next rate setting meeting by the Bank of Canada on April 22 this month is expected to result in another 0.25% to 0.50% reduction.
So far, Canadian Prime Rate had fallen 1.0 full percentage point, but Canadian Banks are slow to reduce their posted mortgage rates. Prior to the rate reductions, Canadian posted mortgage rates by Canadian Banks and credit unions were from 7.35% for 1-year term to 7.49% for 5-year term. Currently, the posted rates for 1-year and 5-year are at 7.15% and 7.19%.
The reason for the small reduction in the posted rates may be attributed to Canadian Banks taking advantage of the higher interest rate spread to beef-up their balance sheets. Some Canadian banks were reported to be badly affected by their subprime losses.
It is difficult to understand why local credit unions are not passing on the lower cost to home owners as they were not reported to have loan problems like the major Canadian Banks. It will take a while for Canadian Banks and mortgage lenders to pass on the lower cost to home owners.
How many regulars who read and/or contribute to blogs here
are interested in your real estate propaganda?
I would say not very many at all. Most of us aren't here to be educated or brainwashed on the subject of real estate. We don't give a rat's ass about real estate, because that's NOT what this blog is about. Take your sales pitches and your infomercials someplace else - for example, to your own website instead of this one. The webmasters of this site have done everything short of hitting you over the head with a two by four to get you off here, and you still keep coming back.
What the hell's the matter with you anyway? Are you stupid,
or what?
Hi there,
In response to the "Why Mortgage Posted Rates Are Still So High?" I thought I'd just mention that rates have come down quite a bit in the past month after the BoC cut rates again.
Some of the credit unions have come down more inline with the specialist lenders, and you can compare mortgage rates of the banks versus credit unions here.
Kelvin