After five-year bond yields fell in the wake of a surprise cut by the Bank of Canada last week Royal Bank of Canada is the first major lender to cut it’s prime lending rate from 3.0% to 2.85%, effective January 28, 2015.
The speculation is that other major banks are heading into change their mortgage price in the wake of the Bank of Canada’s surprise decision to cut interest rates.
Last week RBC offered a five-year fixed rate of 2.84%. That was below RBC’s posted rate of 4.84%. The bank also decreased its 3-, 7-, and 10-year rates. (Soruce:CanadianMortgageTrends.com),
Today reduction came in as surprise as only last week RBC joined other lenders standing pat on its 3% prime rate, which is tied to lines of credit and variable mortgages. Prime usually moves in cycle with the Bank of Canada rate, which was cut to 0.75 percent on Jan. 21.