The Bank of Canada announced today another ½% cut to its’ overnight lending rate in order to try and minimize the potential effects from the coronavirus. This was an unscheduled rate cut as they normally would not have held a meeting at this time. It remains to be seen as to whether or not the banks will pass this along to consumers or if they will keep this discount to themselves. We will know more on this early next week.
If they do pass along the discount to consumers then essentially there will be a drop in the Prime rate down to 2.95%. This will affect variable rate mortgages only at this time.
Fixed rates have dropped recently as well however they are not tied to the variable/prime rates. There have been a couple of lenders that have indicated they are making small increases to their fixed rates at this time.
The government is also making available $10 billion to businesses through a credit facility program. This is to help offset the effects of a reduction in business from the virus spreading across the country.
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