If the Bank of Canada raise the prime lend rate to 8.8, does that effect mortgage rates? ?
I have a fluctuating mortgage - NOT applying for a new one. Also, the U.S. enjoy lowered interest rates by 1/2 points. How does THAT effect our mortgage rates??
Answers:
Variable mortgage rates in Canada are usually set to adjust up and down with the bank's prime rate. As of today, Oct 16 2008, Scotiabank's Variable Rate Mortgage's interest rate is set to 5.25%. It's Prime Lending Rate is 4.25%, and the Bank of Canada's prime business rate is also 4.25%.
If the Bank of Canada rate be to rise to 8.8%, rates on your variable mortgage would certainly rise. Assuming your mortgage rate jump from 5.25% to 9.8% (1% above prime), your monthly payment on $100,000 would jump from $596 to $881.
On the other paw if rates were to drop by 1%, from 5.25% to 4.25% (1% above prime), your monthly payment on $100,000 would drop from $596 to $540.
As we've see in the news, over the closing couple weeks, banks do not have to adjust their rates alike amount as the Bank of Canada.
Hope that helps!
BTW, check out my website for a Canadian Mortgage Payment Calculator
http://mortgage-shopper.info/Canada/mort… Source(s): http://www.scotiabank.com/rates/mort_rat…
http://www.bank-banque-canada.ca/en/rate…
the U.S will not affect you, but the Canadian raise contained by prime lending should not affect your already existing rates however since your mortgage is fluctuating it might rise just for the company to create more money
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Answers:
Variable mortgage rates in Canada are usually set to adjust up and down with the bank's prime rate. As of today, Oct 16 2008, Scotiabank's Variable Rate Mortgage's interest rate is set to 5.25%. It's Prime Lending Rate is 4.25%, and the Bank of Canada's prime business rate is also 4.25%.
If the Bank of Canada rate be to rise to 8.8%, rates on your variable mortgage would certainly rise. Assuming your mortgage rate jump from 5.25% to 9.8% (1% above prime), your monthly payment on $100,000 would jump from $596 to $881.
On the other paw if rates were to drop by 1%, from 5.25% to 4.25% (1% above prime), your monthly payment on $100,000 would drop from $596 to $540.
As we've see in the news, over the closing couple weeks, banks do not have to adjust their rates alike amount as the Bank of Canada.
Hope that helps!
BTW, check out my website for a Canadian Mortgage Payment Calculator
http://mortgage-shopper.info/Canada/mort… Source(s): http://www.scotiabank.com/rates/mort_rat…
http://www.bank-banque-canada.ca/en/rate…
the U.S will not affect you, but the Canadian raise contained by prime lending should not affect your already existing rates however since your mortgage is fluctuating it might rise just for the company to create more money
Related Questions: