RBC’s CEO Gordon Nixon announced on Friday that mortgage rates “can go lower, but they can’t go much lower.”
Although that’s great news for mortgage shoppers it’s not great for RBC’s shareholders as Nixon also soad that the widely expected rate cut by the Bank of Canada tomorrow would hurt RBC’s mortgage earnings. “What it does is squeeze our margins dramatically, particularly in our retail and mortgage portfolios,” he said.
Analysts are predicting a 0.25% to 0.50% to Canada’s main interest rate tomorrow and the big banks should follow the rate cute and decrease their Prime lending rates which will then lower variable mortgage rates.
Rates are currently at or near historic lows anyways so it will be a great time to take advantage if you’re in the market for a mortgage.
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