Quote:
Originally Posted by GP_Matt
I wonder if there is grounds to go after the banks for misrepresenting how prime works.
I was told that it was tied to the BoC overnight rate when I signed up for my variable rate mortgage.
If they don't have to follow the BoC does that mean that they can raise prime tomorrow for no reason?
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Banks are unfortunately not misrepresenting themselves but the bank representative may have mislead you?
Prime is influenced by BoC rate but does not necessarily go up or down when the BoC rate changes as we have experienced a few times, as recent as last week.
Your mortgage agreement is Bank (insert bank name) Prime + or - the variable component is what you are agreeing too... more specifically the discount off of Prime.
Yes they could raise Prime if the lender felt they could get away with it, without the BoC increase. It is the lenders decision to do so...