Money Banks raise prime rate to 3.7 per cent

23:30  11 july  2018
23:30  11 july  2018 Source:

BoC rate hike has both pros and cons

  BoC rate hike has both pros and cons The Bank of Canada's latest interest rate hike means higher borrowing costs for consumers with variable-rate mortgages, loans or lines of credit, but it is also good news for savers and future homeowners. The decision to increase its benchmark interest rate to 1.5 per cent on Wednesday prompted all of Canada's Big Six banks to raise their prime rates, thereby passing the rate increase along to their customers.

Citibank raised its prime lending rate to 7 3/4 percent from 7 1/2 percent yesterday, the first increase by a major bank since June 1984. The move was immediately followed by the Chase Manhattan Bank , and other financial institutions were expected to act similarly today.

Bank of America raised its prime lending rate to 3 .75 percent , effective immediately. The prime rate is the rate at which individual banks lend to their most creditworthy customers, including large corporations.

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TORONTO - Canadian banks say they will raise their prime lending rate after the Bank of Canada increased its overnight lending rate to financial institutions.

Royal Bank, TD Canada Trust, BMO, and Scotiabank all say they will increase their prime rate by a quarter of a percentage point to 3.70 per cent, effective Thursday.

The rates had previously been set at 3.45 per cent.

The increase will raise the cost of borrowing for customers with loans linked to the prime rate such as variable rate mortgages and lines of credit.

The Bank of Canada raised its target for the overnight rate a quarter-point to 1.5 per cent Wednesday.

It was the central bank's fourth rate increase in the last 12 months.

Companies in this story: (TSX:RY)(TSX:TD)(TSX:BNS)(TSX:BMO)

Key steps to getting out of credit card debt .
Key steps to getting out of credit card debtCredit cards often carry interest rates in the double digits, some of the most crippling in the debt world, so anyone carrying a balance on one should make it their top priority to pay off — even if the big banks' decision to raise their prime rates doesn't directly impact credit card rates, said Credit Counselling Society president Scott Hannah.


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