As you know, a variable rate Mortgage and/or line of credit mortgage is based on the Prime Rate, 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 9:00 am EST today, July 12th the Bank of Canada did what we expected them to do… they increased their overnight rate.
What this means to you is that the prime rate on your mortgage or line of credit will likely increase .25%.
How much will it affect me?
- .25% = to $13 per $100k you owe per month on a mortgage.
What can you do?
- Stay the course, or lock into a fixed rate
What should you do?
- This depends on your situation, remember the variable rate still provides the flexibility of a low penalty and likely still an interest savings.
- If you would like to lock in, you will increase your rate between .50% to 1% for a comparable rate.
- Compare the cost and interest savings now vs. the comfort of no further increase
- If you CHOOSE to switch to a fixed rate, you may contact your lender, contact our office to book a call or e-mail us and we will look at the best option for you.
Remember: Fixed AND Variable rates are STILL very low and it is STILL a very good time to Re-Finance or Buy. This is only a .25% increase and basically matches interest rates from earlier this year!
Want more info?
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We have seen the fixed term rates fluctuate slightly and are still very low at around 2.64% to 2.99% for a five year fixed term.
As always, if you know of anyone else that could use this same type of ongoing advice and support recommend them to us we would love to help them as well.
Any other questions? Feel free to reach out and we'll respond at our earliest opportunity!