The Bank of Canada has raised its’ benchmark rate twice this year and in turn lenders have followed suit and increased the Prime Rate by .5%. The Prime Rate for lenders now sits at 3.7%. Variable rates can be still be obtained at rates as low as Prime – 1% (2.70%).

The Bank of Canada will next meet on October 30 and it is widely expected that they will increase the benchmark rate again and in turn lenders will increase their prime rate by .25% to 3.95%. This is something to keep in mind if you are in a variable rate mortgage.

Through all of this we must also remember that several years ago the Bank of Canada ended up dropping their rate twice for a total of a .5% drop. All of the major banks in Canada only passed along .3% of this discount to consumers. Therefore the current Prime rate should be 3.5% rather than 3.7%. This issue should be taken up with the banks and the government as variable rates are now rising and we have not seen any of this passed back to consumers.

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