down down down..but for how long ?

the bank of canada dropped their target rate by .50% this week - but the major chartered banks took approx 8 hours to follow suit. It would appear the major banks are trying to signal to the bank of canada - they do not want to drop rates any further - which tends to go along with my conspiracy theory - which says banks hate lending money below 6%.
the spreads on the bankers acceptance puts the current variable rate mortgages into a negative position - and the lenders are saying they must cut the spreads on the variable product.
they have already dropped from prime less .90 to prime less .60 as an average and it will likely drop further to prime less .25 - 40....which is likely a more reasonable spread. The banks got themselves into this mess by constantly trying to out do each other and increasing the discounts until they werent making any money...at least thats what they say.
now is likely still the time to take a variable product with a front end load over 6-12 months - but keep your eyes on the 5 year mortgage rates - currently around 5.50%..if they start moving up lock in and as they say in the movies.....forget about it......