The overnight rate has been 1.75% since October and on Wednesday the Bank of Canada announced that it will remain unchanged. Speculators suggest that this will be the case for most of the rest of this year if not part of next year as well.
What this means for your mortgage
If your mortgage term is coming to an end you’re likely wondering what kind of rates lenders have to offer. The good news is that interest rates right now are most likely lower than they were when your term started. But if you aren’t close to renewal it may be worth it to pay the price of refinancing early. Breaking your mortgage with one lender in order to move to a lender with preferable rates comes with fees and penalties. But it may be worth it if you can save money in the long run. On the up side, many lender are willing to cover the fees for you or allow you to roll them into your mortgage rather than taking them out of your pocket right away. To find out what kind of penalties you could face, refer to your mortgage agreement, talk to your lender, or speak to one of our experts today.
The benefits of refinancing
Refinancing means closing your mortgage with one lender and opening a new mortgage with a new lender. This is done in order to get a lower interest rate, a lower payment, or to switch between a fixed and variable rate mortgage.
Refinancing your mortgage also means that you can potentially get access to some of the equity in your home. One option is to open a Home Equity Line of Credit (HELOC) which allows you to cash in on some of the value of your home in order to achieve other financial endeavours. Use the equity to renovate, invest, go on a trip, the sky is the limit.
Another reason for financing is to consolidate debt. This is especially useful when you’re grappling with other high-interest debt like credit cards. Rolling this kind of debt into your mortgage eases the burden of high monthly payments and allows you more freedom and flexibility.
Your Trusted Calgary Mortgage Broker is presently offering a fixed mortgage rate of 2.99% and a variable rate that is slightly lower. Locking in your rate now before rates go up sometime in the next 12 months is a good idea. Talk to one of our experts today to find out how to refinance or renew your mortgage.