Big banks pass on part of BoC rate cut

Big banks pass on part of BoC rate cut

Prime rate now stands at 2.7%


OTTAWA – Less than 24 hours after the Bank of Canada cuts its key interest rate, Canada’s big banks have partially followed suit.

The central bank cut its rate by a quarter percentage point on Wednesday to 0.5 per cent. The banks, in turn, cut their prime interest rate by 0.15 percentage points to 2.7 per cent.

It’s the second time the central bank cut its key rate this year. When it chopped the rate in January by a quarter point, the big banks passed on only a portion of the rate cut to their customers then, too.

Moves in the prime rate directly affect the amount charged on loans such as variable rate mortgages and floating rate lines of credit.

The Bank of Canada also downgraded its outlook for the Canadian economy.

How the Bank of Canada influences mortgage rates »