“With less than 2 weeks to our closing date we contacted Casey to arrange our mortgage for a home purchase. He truly was amazing and efficient. He managed to arrange our mortgage on time and at a very low rate. This was our first time using a mortgage broker and we would highly recommend Casey to anyone looking for a mortgage.”


Hamid & Fozia Sankhar, Milton, Ontario


“Honesty, integrity, and professionalism are the three words that come to my mind when I hear Casey’s name. He has provided my clients over the years with the highest level of service and they always thank me for introducing them to him. Casey truly goes above and beyond.”


Deborah Robinson, Real Estate Agent – Royal Lepage


“Working with Casey was an absolute pleasure from the beginning to the end.  Not only did he secure us a much better mortgage rate than the bank we’ve been with for over 15years, but he also helped us create a financial plan to help us to pay off our mortgage faster while creating wealth at the same time.  We’re very excited about working with Casey in the future and look forward to referring him to all of our friends and family.”


Peter & Lorraine Verners-Rufh, Oakville, Ontario


“Purchasing our first home was a little nerve racking at first, but after speaking with Casey we felt completely at ease as we new we were in good hands.  Unlike our bank who took more than 2 days to call us back, Casey was always available to answer our questions and concerns no matter when we tried to reach him. Casey you made our first home purchasing experience a very pleasant one, and we really appreciated your advice regarding our life insurance options as well.  Thanks for everything…you saved us a lot of time and stress!”


John & Allison Botero, Mississauga, Ontario


“I have nothing but amazing things to say about F1RST CHO1CE Financial Group. Not only are Casey & Wayne extremely helpful and patient, but they’ve always taken the time to explain all my available options and make recommendation that would help me best attain my goals. I would recommend F1RST CHO1CE to anyone looking to plan for their future.”


Wilfido Rodriguez, Brampton, Ontario


“My wife and I have been clients for several years now, and in that time, we’ve conducted numerous transactions with both Casey and Wayne from mortgage refinancing to life insurance to managing our investments. These individuals have demonstrated that they have superior knowledge of their respective products and are able to deliver them with exceptional customer service. I have found that this combination is a rarity these days, and as such, I whole heartedly recommend their service to both friends and family with confidence.”


Clifton Sookdeo & Shelly Sharma, Caledon, Ontario



 What is The Prime Rate?

The Prime Lending Rate in Canada is a guideline interest rate charged by banks on loans for their most creditworthy or “best” clients. The actual minimum rate, however, may differ slightly from lender to lender. Banks and lenders in Canada do follow the prime rate in order to remain competitive, but at the same time they may add their own monetary spread to the prime rate. For example, when the prime lending rates were high, many lenders in Canada were offering variable rates at prime minus .90 per cent. If the prime rate is low, lenders could potentially offer variable rates at prime plus a percent. This model of prime rate tracking allows lenders to remain highly competitive while still adhering to the fluctuating interest rate of prime.


Influences on the prime rate:

Canada’s prime rate is influenced primarily by Canadian economic conditions. The Bank of Canada adjusts it directly, depending on the state of the economy. The Bank of Canada therefore decides what interest rate prime should be set at and for how long. This is vital to the growth and stability of the country.

Economic ups and downs in a country like Canada directly affect the ability of banks, companies and consumers to spend money or to provide goods and services. These ups and downs are driven by various factors in employment, manufacturing and exports. All of these things, taken together, affect the inflation rate. When inflation is high, the Bank of Canada must act quickly to avoid an overheated economy. In this case, they react by increasing the prime rate, thereby making the act of borrowing money more expensive. This has the effect of cooling off the economy so as to control the rate of inflation. Likewise, in cases where inflation is low, the Bank of Canada will decrease the prime rate, so as to heat up the economy.

The prime rate only changes when the Bank of Canada decides it is necessary to boost the economy or to slow it down. In November of 2000, the Bank of Canada introduced eight fixed dates each year where they would announce any rate changes. Announcements for changes of many other Bank of Canada-influenced rates, such as the overnight rate target, also share the same dates. These dates do not necessarily guarantee any movement of the prime. They are simply dates on the calendar where the prime rate can be changed if required. There have been times over the last decade where the prime rate was not changed at all for long periods of time.


Effects of prime rate on consumers:

Canadian consumers and businesses alike cannot always pay cash for all things, therefore they must borrow in order to purchase more costly goods or services. This is where the prime rate is vital to the operation of any household or business. In one way, shape, or form, this interest rate affects almost everyone’s daily life, not just a borrower.

If you’re in the market for a particular product built by mass manufacturing, chances are that companies built that product using borrowed funds. These borrowed funds typically come from a bank or lender where the prime rate is used as the most basic and proportionate factor for calculating interest charged on the loan. Even if preparing to purchase a new vehicle, as a consumer, if you choose to finance your vehicle, the dealership’s financing department bases their auto loan rates on a calculation using the prime rate.


How the prime lending rate influences the mortgage market in Canada:

In the Canadian mortgage market, the prime rate is used for calculating and lending money on variable rate or line of credit mortgages.

A variable rate is typically a closed term, either 3 or 5 years in length. Usually, depending on the economy and availability of mortgage money during a particular cycle, variable rate mortgages will follow prime rate less a set discount. For example: Some variable rates will have a Prime Rate minus 0.10%. Today, the prime rate is set at 3.00% and the best variable rate is 2.90%

A line of credit will typically be based on prime rate plus a percentage or basis point count. A line of credit in Canada is a very popular form of borrowing and regardless of the lender you deal with, they all follow the prime rate lending model so there is very little variance from institution to institution. Regardless of whether it’s a variable mortgage or a line of credit, they are both heavily based on and follow the prime rate in Canada. When the prime rate changes, so too can the variable rate or line of credit interest calculation that is used for your loan. Making sure you understand the prime rate and how it is tied to our monetary system and the Canadian economy will make things easier when it comes to deciding what options you choose when borrowing money.






At F1RST CHO1CE Mortgage Solutions we’re passionate about sharing our knowledge, experience and unbiased opinions with borrowers who are looking for a trusted advisor to help them with their financing options.

ANY QUESTIONS?…Contact a Mortgage Advisor today!