Canada’s big lenders have slashed their prime lending rates following the Bank of Canada’s move to lower its overnight rate by 50 basis points on Wednesday.

Royal Bank of Canada was first out of the gate late Wednesday afternoon.  

RBC said in a statement it would cut its prime rate 50 basis points to 3.45 per cent, effective Mar. 5. The Bank of Canada cut its key interest rate by 50 basis points to 1.25 per cent earlier on Wednesday, a day after the U.S. Federal Reserve made an emergency 50-basis-point cut amid concern about COVID-19’s economic impact.

By early Wednesday evening, Royal’s Big Five peers — Bank of Nova Scotia, TD Canada Trust, Canadian Imperial Bank of Commerce, and Bank of Montreal — had all matched its move. 

National Bank of Canada confirmed Thursday it would also cut its prime lending rate to 3.45 per cent from 3.95 per cent, effective Friday.  

Banks use the prime rate to help determine interest rates on various loans, including variable-rate mortgages. 

Rob McLister, founder of mortgage comparison website, told BNN Bloomberg Wednesday that even with the Bank of Canada’s decision, the country’s lenders won’t be rushing to slash their fixed mortgage rates.

“They generally don’t cut mortgage rates significantly during market volatility,” he said in a television interview. “It’s highly likely rates will come down a bit in the short-term. But we might have to wait. Banks might keep some powder dry. They’re taking a hit with falling rates and an inverted yield curve.”

“We’ll have to wait and see.”