Mortgage payments going down!

Are you a homeowner? If so, do you have a fixed or floating rate mortgage? When we bought our condo apartment a few years back we went with a floating rate loan. The mortgage is from Maple Trust (a sub of BNS) and varies with Scotiabank prime. The bank's prime rates vary with the Bank of Canada rate. The "gamble" has paid off big time (especially recently).

The Bank of Canada has recently been reducing rates to ease the credit crisis and to ward off recession. The BoC's benchmark rate currently sits at 2.5% and Scotiabank's prime rate was re-set to 4.25% last week. Our mortgage bears interest at prime minus 50 basis points. So the current interest rate on our mortgage stands a paltry 3.45%!

There are suggestions that the Bank of Canada may lower its rate by another 80 basis points this week. If the chartered banks flow that whole decrease through their primes, our mortgage rate would drop under 3%. Amazing! I never thought I would see the day when you could borrow on a home mortgage for less than 3%!