HSBC Canada which is the 7th largest bank by assets is now offering less than 1% mortgage rate in its current advertisement.
The Bank’s website is showing a new 5-year variable mortgage rate of 0.99 % lower. This happened for 1st time in Canadian history in terms of bank-advertised rates.
The rate signifies a discount of 1.46% on HSBC’s current prime rate of 2.45%.
The prime rate is the interest rate financial institutions and banks uses as a benchmark to variety of their lending rates that also includes variable mortgage rates. Bank and Financial instructions tend to adjust their prime rate based on key interest rate from Bank of Canada which has been 0.25% since late March.
The new variable 0.99% mortgage rate means it could move up if The Bank of Canada hikes its rate and HSBC follows suit with its own prime rate but Canada’s central bank has promised to keep rates low until 2023 to keep borrowing cheap and help stimulate economic activity during the novel coronavirus pandemic.