Alas, today the big Canadian banks are finally seeing fit to lowering their prime lending rates by 0.15% to 2.85% from 3%. This move made after initially indicating, last week, that they would not change their Prime rates when the Bank of Canada (BoC) lowered it's Key rate by 0.25% on January 21st. The last time that the banks did not follow suit exactly with the BoC was in December 2008 when the BoC lowered it's Key rate by 0.25% and the banks did not lower their Prime rate at all. The banks are concerned about their profit margins on lending, but this seems to be without merit as bond yields skid down in the market and other consumer lending rates go up. Variable rate mortgages outstanding will see a 0.15% reduction in their rates, leaving more money in businesses' & consumers' pockets. It is yet to be seen how the banks will price variable and fixed rate mortgages going forward on new originations. The general consensus is that rates will remain soft and come down a bit more.