Below you will find the confirmation all of our realtor partners and variable rate mortgage clients received today as a follow up to the newsletter we sent yesterday morning announcing the Bank of Canada changing their overnight target rate from 1.25% to 1.50%.
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Prime Lending Rate Increasing
With the Bank of Canada news from yesterday beginning to settle in, most lenders have adjusted their prime lending rates to reflect the changes made to the overnight target rate. To see Dominion Lending Centres Chief Economist Dr. Sherry Cooper's opinions, you may click the link seen here.
All lenders have so far mirrored the 0.25% increase with a handful of lenders yet to make any changes. This 0.25% increase moves the prime lending rate from 3.45% to 3.70%, with the exception of TD Canada Trust who previously had a prime lending rate of 3.60%. TD Bank is currently using a 3.85% prime lending rate, 0.15% higher than everyone else.
It is important to monitor your new monthly payments and adjust accordingly. Most lenders will automatically adjust your interest rates and increase your monthly payments. Some, such as TD Bank, will not increase the monthly payment, only increasing the portion of the payment going towards interest and decreasing the portion of that same payment going towards paying off your principal.
For every $100,000 in mortgage money you have outstanding, a 0.25% increase to your variable interest rate mortgage is just over a $12.50 increase to your monthly payment on a 25-year amortization. Just over $13 if you are on a 30-year amortization.
If you have any questions, if want to discuss your own personal mortgage and it's new changes, or have someone who may also need this information, please, do not hesitate to call either Kevin or Ryan and we will be happy to answer your questions!
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