Bank of Canada Announcement

(July 14, 2016 )

This morning I received an email from a trusted Mortgage Broker that we work with.  Her name is Eva Neufeld and she is a Mortgage Broker with Mortgage Tailors.  There is some good information here that I wanted to share with you so I hope you don’t mind, I just copied the email below.  Don’t hesitate to call Eva or myself if you have any questions at all.

Good morning

As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate.At 10:00 am EST, Wednesday July 13, 2016, the Bank of Canada maintained their overnight rate which in essence means no change to the interest rate of your variable rate mortgage, line of credit and/or student loans.  This is still good news for the amount of interest that you will pay, but we also have to recognize that it is a reflection of the slow economy.So summer is here and there is nothing better than enjoying some time off with family and of course the warm outdoors.  But is your mind racing about other possibilities; maybe converting your RSP, TFSA or LIRA into mortgages for a higher return, buying a cottage or vacation home, renovations such as a new kitchen, finish the basement or maybe you have a bunch of debt you'd like to eliminate.  Now is the time to get serious about looking into these options... I's be happy to make those plans into reality and save unnecessary interest or even be the banker for a change!The Bank of Canada is still concerned with the financial vulnerabilities and regional divergences underway in Canada's economy.  It is still anticipated that rates won't start increasing until well into 2016 even early 2017.  Remember, that any increase in prime rate since 1992 has only been by 0.25% at any ONE time, so you won't see a large significant increase all at once.Fixed rates haven't changed at all since the last announcement, and are around 2.44 on a quick close and 2.49% for a five year fixed rate term.

Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise. It's recommend that you remain with your current variable rate product as the interest is lower than a fixed rate right now.  However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you.  I'll be in touch again for the next announcement on September 7, 2016.