Bank of Canada Announcement July 13 2016: As you know, your variable rate mortgage, line of credit and/or student loans are all 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.
Update
At 10:00 am EST, Wednesday July 13, 2016, the Bank of Canada maintained their overnight rate. In essence means no change to the interest rate on 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. We also have to recognize that it is a reflection of the slow economy.
Converting into mortgage
So summer is here and there is nothing better than enjoying some time off with family! Of course the warm outdoors are great too. But is your mind racing about other possibilities; maybe converting your RSP, TFSA or LIRA into mortgages for a higher return Or buying a cottage or vacation home? Maybe renovations such as a new kitchen, finish the basement or add a pool? Or you just have a bunch of debt that you’d like to eliminate. Now is the time to get serious about looking into these options… especially as rates are still at historical lows! Chat to me about your options … I’d be happy to make those plans into reality and save unnecessary interest or even be the banker for a change!
Economy
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 to the 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 really changed at all since the last announcement, and are around 2.59% to 2.69% for a five year fixed term.
Next announcement
Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I’d recommend that you remain with your current variable rate product as the interest is lower than a fixed term 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.
I wonder if I can ask a favour, if you hear a friend or family member talk about going thru a financially tough time – maybe I can help with some budgeting, credit counselling and debt consolidation options for them. Also do you have a friend or family member where buying their first home is on the “wish list”, would you mind passing my contact information on to them – this is very much appreciated.
Call Kelly Wilson for more info on your options. 613 266-3570 or email kelly@wilsonteam.ca
