Royal Bank matches Bank of Canada with 50 basis point cut to prime interest rate

TORONTO — Royal Bank says it has dropped its prime lending rate by 50 basis points to 3.45 per cent, effective March 5.

The move matches the Bank of Canada’s decision Wednesday to drop its key lending rate by 50 basis points, which was itself a matching of what the U.S. Federal Reserve had cut a day earlier over the novel coronavirus.

The Bank of Canada said it cut its target for the overnight rate because COVID-19, as the virus is named, was “a material negative shock” to Canada’s already softening economic outlook.

The cut in the bank’s key rate is the first since the summer of 2015 and brings the rate to a level not seen since early 2018, while the bank had not dropped its rate by 50 basis points since the financial crisis.

The rate cut will make mortgages and other borrowing cheaper, but has also raised concerns it will further inflame already overheated housing markets.

Ratehub.ca says a homeowner with a five-year, $450,000 mortgage at a 2.6 per cent variable rate amortized over 25 years would save about $115 a month if the mortgage were to drop 50 basis points to 2.1 per cent.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta announces 98 new cases of COVID-19

City of Red Deer has no COVID-19-related deaths

The Red Deer Public Market will not open next month

It’s being postponed indefinitely to reduce public gatherings

Women’s Fun Run is ‘re-imagined’ for May 9

Families can register for free and do any activity at home

WATCH: Red Deer emergency call centre hours change starting next week

Hours at the City of Red Deer’s COVID-19 emergency call centre will… Continue reading

Alberta Health Services provides COVID-19 prevention tips

Alberta Health Services has a number of recommendations for people amid the… Continue reading

Alberta government website has latest COVID-19 statistics

Red Deer Advocate readers can stay up to date on the COVID-19… Continue reading

David Marsden: Hospital parking should always be free

If you need to visit a patient at a hospital or other… Continue reading

COVID-19 crisis distracting from flood-prone First Nation’s plight: NDP

COVID-19 crisis distracting from flood-prone First Nation’s plight: NDP

Judge sides with woman accused of spying for Russia, orders new hearing

Judge sides with woman accused of spying for Russia, orders new hearing

Ont. court upholds murder conviction in death of girl found in burning suitcase

Ont. court upholds murder conviction in death of girl found in burning suitcase

British cancelled, Masters to November in major rescheduling

British cancelled, Masters to November in major rescheduling

NFL going with virtual format for upcoming draft

NFL going with virtual format for upcoming draft

Most Read