mortgage simple definition: Prime Rate

Prime Rate

Prime Rate. Mortgage Rate Forecast Fed Rate Cut & 2019 predictions

Prime Rate video duration 2 Minute(s) 7 Second(s), published by Capital Forever on 22 09 2019 - 20:16:30.

What does prime rate mean? Prime rate is the basis for variable mortgage rates in Canada
How is this calculated? The official benchmark is calculated by the The Federal Reserve is meeting this morning to decide the future path of interest rates
Yahoo Finance's Brian Sozzi, Brian Cheung, and Alexis Christoforous .

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What does prime rate mean? Prime rate is the basis for variable mortgage rates in Canada. How is this calculated? The official benchmark is calculated by the Bank of Canada and generally follows the central bank’s rate changes. How is prime rate set? Canada’s benchmark for prime rate is published by the Bank of Canada each week. It’s calculated as a mode average of the Big 6 Banks’ prime rates. What causes the rate to go up or down? The prime rate usually follows the overnight rate. The Bank of Canada generally hikes the overnight rate, which increases the prime rate when it is worried that inflation could exceed its 3% high. The Bank of Canada typically cuts the overnight rate, which reduces the prime rate, when it is worried that inflation could go below the 1% low. Did you know? The all-time high was once 22.75% in August of 1981. The all-time low was 2.25% in April of 2009. How does prime rate affect closed variable mortgage rates? Closed variable rates are typically priced at a discount to prime rate. For example. Prime minus 0.50%. How does the prime rate affect open variable mortgage rates? Open variable rates are generally at a premium to prime rate. Example. Prime plus 0.75%.