Feeling cheated that the banks aren’t dropping prime rate as much as Bank of Canada?
Posted January 29, 2015 12:06 pm.
This article is more than 5 years old.
VANCOUVER (NEWS1130) – The banks’ decisions to not take the prime lending rate down to where the Bank of Canada cut it may have you feeling a little cheated.
But a finance professor argues the decrease is actually a good compromise.
“Seems like a pretty good compromise between not doing it at all and going all the way to dropping it by 25 basis points,” argues Andrey Pavlov with SFU.
“The prime rate is something that the banks determine themselves, so they could have kept it at the original three percent and not dropped it at all,” he adds.
This of course, affects all kinds of variable loans, like mortgages, lines of credit, and car loans.
Pavlov suggests if it is a disappointment, customers should demand loans that are tied to Bank of Canada rates.
The last time the Bank of Canada dropped its rate was almost six years ago, and the banks followed suit.
