[Source - CNW Group]
TORONTO, Oct. 10 /CNW/ - TD Canada Trust today announced that it haslowered its prime lending rate by 15 basis points to 4.35 per cent, effective,Tuesday, October 14, 2008. This morning the government announced that it will buy $25-billion ininsured mortgage pools to address Canadian banks' increased cost of borrowing. "We believe that this initiative will be put into effect in a way thatwill reduce our overall cost of funds and, as a result we are dropping ourrate today. As we've been saying, a number of factors go into decisions aboutrate changes. Financial markets are very turbulent, and funding costs arestill high. However, we anticipate that our cost of funds will decrease withthe implementation of this program, and therefore wanted to take action thatwill benefit our customers directly," said Tim Hockey, President and CEO, TDCanada Trust.
Showing posts with label TD Bank. Show all posts
Showing posts with label TD Bank. Show all posts
Friday, October 10, 2008
Wednesday, October 8, 2008
Canada banks go for smaller cuts to prime rates
[Source - Reuters - By Lynne Olver]
Canadian banks will pass along only part of a central bank rate cut to borrowers, with Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) being the first to announce on Wednesday it will lower its prime lending rate by 25 basis points to 4.50 percent.
That is only half of the 50 point cut in administered rates made by the Bank of Canada earlier on Wednesday, when it acted with other central banks to lower key lending rates in an attempt to shore up investor confidence and ease the effects of the global credit crunch.
The Bank of Canada dropped its overnight rate target to 2.5 percent.
Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research, Stock Buzz), Royal Bank of Canada (RY.TO: Quote, Profile, Research, Stock Buzz) and Bank of Nova Scotia (BNS.TO: Quote, Profile, Research, Stock Buzz) said they would make the same reductions as Toronto-Dominion, bringing their prime rates to 4.50 percent from 4.75 percent, effective Thursday. Other banks were likely to follow suit, based on past patterns.
The prime rate influences borrowing rates on other consumer and business loans.
"There's certainly no rule that states that they have to cut their rates in lockstep with the Bank of Canada," said Steve Foerster, a finance professor at the University of Western Ontario's Ivey School of Business.
Click Here to Read More on Reuters.com
Canadian banks will pass along only part of a central bank rate cut to borrowers, with Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz) being the first to announce on Wednesday it will lower its prime lending rate by 25 basis points to 4.50 percent.
That is only half of the 50 point cut in administered rates made by the Bank of Canada earlier on Wednesday, when it acted with other central banks to lower key lending rates in an attempt to shore up investor confidence and ease the effects of the global credit crunch.
The Bank of Canada dropped its overnight rate target to 2.5 percent.
Canadian Imperial Bank of Commerce (CM.TO: Quote, Profile, Research, Stock Buzz), Royal Bank of Canada (RY.TO: Quote, Profile, Research, Stock Buzz) and Bank of Nova Scotia (BNS.TO: Quote, Profile, Research, Stock Buzz) said they would make the same reductions as Toronto-Dominion, bringing their prime rates to 4.50 percent from 4.75 percent, effective Thursday. Other banks were likely to follow suit, based on past patterns.
The prime rate influences borrowing rates on other consumer and business loans.
"There's certainly no rule that states that they have to cut their rates in lockstep with the Bank of Canada," said Steve Foerster, a finance professor at the University of Western Ontario's Ivey School of Business.
Click Here to Read More on Reuters.com
Tuesday, October 7, 2008
TD to raise rates on mortgages, home equity loans
The latest victims of the growing financial crisis could be the standard discount available to consumers on variable mortgages, and home equity loans at prime.
In a move expected to be followed by other banks, all of which have been stung by higher funding costs, TD Canada Trust is raising rates on both types of loans, effective Oct. 7.
Rates on these products will rise to 5.75 per cent, a percentage point above the prime rate. Only last week, TD eliminated the discount on its variable rate mortgages, offering them at the prime rate of 4.75 per cent. During the housing boom of the past several years, consumers could often get their bank to drop the rate by half or even up to a full percentage point.
“While TD Canada Trust has endeavoured to not pass on the increases in rates to its consumers, this change reflects steadily increasing costs of funds in the current economic environment,” the bank said in a statement.
The percentage point increase raises the term interest cost on a $250,000 variable rate mortgage by $12,247.22 over five years, according to Royal Bank of Canada's online mortgage calculator. The difference is based on a 25-year amortization, a variable rate mortgage with a five-year term and bi-weekly payments. On that basis, the bi-weekly payment amount rises to $725.90 from $657.83.
The credit crisis and economic uncertainty have caused banks to stockpile their cash. That's driving up their short-term cost of borrowing from one another, and means margins on variable rate mortgage products are shrinking.
Rates on fixed-term mortgages went up last week too, as banks have passed on fewer of their savings from falling bond yields to consumers to consumers.
“The deterioration of global credit markets is beginning to squeeze the ability of even the strongest of financial institutions to raise longer-term funds, which could limit the provision of longer-term credit in Canada to businesses and households,” federal Finance Minister Jim Flaherty said in a statement Monday.
“Hopefully this isn't a permanent shift, but a short-term reaction to conditions the likes of which we really haven't seen before,” said Gary Siegle, regional manager at mortgage broker Invis.
With a discount, some customers can still get five-year, fixed-rate mortgages at 5.55 per cent, meaning a bi-weekly payment of $707.66 on a $250,000 mortgage amortized over 25 years. This means those looking for peace of mind in the current market turmoil aren't paying a premium to lock in, Mr. Siegle said.
[Source - LORI MCLEOD // Globe and Mail Update // October 6, 2008 at 8:46 PM EDT]
In a move expected to be followed by other banks, all of which have been stung by higher funding costs, TD Canada Trust is raising rates on both types of loans, effective Oct. 7.
Rates on these products will rise to 5.75 per cent, a percentage point above the prime rate. Only last week, TD eliminated the discount on its variable rate mortgages, offering them at the prime rate of 4.75 per cent. During the housing boom of the past several years, consumers could often get their bank to drop the rate by half or even up to a full percentage point.
“While TD Canada Trust has endeavoured to not pass on the increases in rates to its consumers, this change reflects steadily increasing costs of funds in the current economic environment,” the bank said in a statement.
The percentage point increase raises the term interest cost on a $250,000 variable rate mortgage by $12,247.22 over five years, according to Royal Bank of Canada's online mortgage calculator. The difference is based on a 25-year amortization, a variable rate mortgage with a five-year term and bi-weekly payments. On that basis, the bi-weekly payment amount rises to $725.90 from $657.83.
The credit crisis and economic uncertainty have caused banks to stockpile their cash. That's driving up their short-term cost of borrowing from one another, and means margins on variable rate mortgage products are shrinking.
Rates on fixed-term mortgages went up last week too, as banks have passed on fewer of their savings from falling bond yields to consumers to consumers.
“The deterioration of global credit markets is beginning to squeeze the ability of even the strongest of financial institutions to raise longer-term funds, which could limit the provision of longer-term credit in Canada to businesses and households,” federal Finance Minister Jim Flaherty said in a statement Monday.
“Hopefully this isn't a permanent shift, but a short-term reaction to conditions the likes of which we really haven't seen before,” said Gary Siegle, regional manager at mortgage broker Invis.
With a discount, some customers can still get five-year, fixed-rate mortgages at 5.55 per cent, meaning a bi-weekly payment of $707.66 on a $250,000 mortgage amortized over 25 years. This means those looking for peace of mind in the current market turmoil aren't paying a premium to lock in, Mr. Siegle said.
[Source - LORI MCLEOD // Globe and Mail Update // October 6, 2008 at 8:46 PM EDT]
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