SILVER LINING - Prime to drop from 3% to 2.5%

[Thomas Beyer]

Amidst the doom and gloom, some silver lining for us real estate investors:

a likely drop in the prime interest rate from 3.0% to 2.5% ! So, LOC`s at 3.5% .. ain`t so shabby .. or even better for folks who got prime -0.9% until last fall !

http://www.theglobeandmail.com/servlet/sto...tory/WBmarkets/

 

[RobMacdonald]

The Central Bank is doing their part, the question now is will the major banks follow suit with the drop in prime?

 

[mortgageman]

QUOTE (RobMacdonaldCMT @ Mar 2 2009, 09:10 PM) The Central Bank is doing their part, the question now is will the major banks follow suit with the drop in prime?

I`m willing to be the fed`s are putting pressure on the banks to follow suit by dropping prime. The banks can`t plead poverty after the quarterly earnings results that came out last week.

 

[PaulPoulsen]

Does the Bank of Canada have it within their authority to force banks to lower their rates?

 

[Conrad5]

A Bank wanted to give me an LOC at a rate of prime + 6.5 today and I turned it down. Their reason was that it is difficult to get credit and that unless it is a secured LOC that is the best rate they have. I politely turned it down and told them that I dont need it. I find it hard to understand that despite all the money being injected into the Banks by the Central Bank in its effort to increase credit availability, these Banks feel it is their time to cut some pound of flesh from the consumer. Until today the highest rate on unsecured LOC I have with any of the Banks is prime +2 (all interest only), so why should I go for prime+ 6.5 which also include paying 3% of the used portion every month shoudl I used it?

 

[mortgageman]

QUOTE (PaulPoulsen @ Mar 2 2009, 10:08 PM) Does the Bank of Canada have it within their authority to force banks to lower their rates?

No of course they can`t force the banks to lower rates.
But I`m willing to bet that the Finance minister and others in the Finance Department chat with the powers that be at banks and say things like "Well, you want us to do something about (name whatever policy the banks want to see happen), we expect you to fall into line and pass on lower rates to consumers and businesses."
I would suggest CMHC`s purchase of what was the final figure, $50 billion?, worth of mortgages should buy some co-operation.

 

[Thomas Beyer]

QUOTE (caglah @ Mar 2 2009, 10:55 PM) ...Until today the highest rate on unsecured LOC I have with any of the Banks is prime +2 (all interest only), so why should I go for prime+ 6.5 which also include paying 3% of the used portion every month shoudl I used it?
Because times have changed .. did you get a better rate elsewhere ?

 

[GarthChapman]

Three of the big five have already announced the full 0.5% off their Prime Rates.

 

[jkcomm]

Anyone heard from CIBC about their prime rate?

James

 

[HeatherBrandt]

QUOTE (jkcomm @ Mar 3 2009, 02:23 PM) Anyone heard from CIBC about their prime rate?

James


"Canada`s major banks appeared ready to play ball with Carney: shortly after the announcement, Royal Bank (TSX:RY), Bank of Montreal (TSX:BMO), TD Bank (TSX:TD), CIBC (TSX:CM) and Scotiabank (TSX:BNS) announced that they would cut their prime rates by half a percentage point, in step with the central bank"

 

[TommyK]

Yep, soon after the BIG FIVE, HSBC Bank Canad also lowered their prime to 2.5%.

Come to think of it, don`t you find it fishy why most banks are jacking up unsecured LOC in March?

LOL