Good morning

So school is back and the lazy days of summer are behind us…are you feeling a little gloomy… if so, let me cheer you up with some good news…

Prime rate remains the same

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.

Latest announcement

At 10:00 am EST, Wednesday September 7, 2016,the Bank of Canada again maintained their overnight rate which in essence means no change to your interest rate. I feel like I have been repeating myself over and over again as they haven’t increased the rate since July 2007 – nine years ago! You continue to benefit from low rates but I have a question for you… have you REALLY made the most of the low payments you have had? How much do you have saved up or how closer are you to your mortgage burning party because you have made extra payments on your mortgage? Or maybe you just got a little carried away and have some high interest credit card debt that you can’t seem to pay off in full each month.

Create a financial plan

Don’t worry, if you aren’t as far ahead as you would like to be, we can work together to create a plan to get you back on track… so back to school isn’t just for the kids…us adults can benefit from going to back to the drawing board with our finances, savings and future financial wealth goals. I’d like to offer you a 20 minute pro bono consultation to see what we can do to help hit those wealth goals and dreams for you and your family. Get a clear financial outlook,avoid expensive debt and it won’t be just the leaves that are falling in a month or two, but the amount of unnecessary interest and debt you have as well… let’s get you closer to that Mortgage Burning Party! It’s never too late to start planning. Maybe this doesn’t apply to you but you have a friend or family member that we could help, feel free to share this information with them.

Excerpt from the announcement

To continue with the Bank of Canada news, here is an excerpt of the announcement and what they had to say about their decision today:

“Global growth in the first half of 2016 was slower than the Bank had projected, although the Bank continues to expect it to strengthen gradually in the second half of this year. The US economy was weaker than expected in the second quarter, notably reflecting a contraction in business and residential investment. While a healthy labour market and solid consumption should remain supportive of growth in the rest of the year, the outlook for business investment has become less certain. Meanwhile, global financial conditions have become even more accommodative since July.

Canadian exports disappoint

In Canada, exports disappointed even after accounting for weaker business and residential investment in the US, adjustments in the resource sector, and cutbacks in auto production. The economy is expected to rebound in the third quarter as oil production recovers, rebuilding commences in Alberta, and consumer spending gets an additional lift from Canada Child Benefit payments.”

Potential rebound

The Bank of Canada is projecting a substantial rebound in the economy in the second half of this year. 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

Fixed rates haven’t really changed at all since the last announcement, and are around 2.39% for a five-year fixed 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, 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 October 19, 2016.

I wonder if I can ask a favor, going with my theme of “Let the sun set and the leaves fall along with Canadian consumer debt with our help” 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. In either of these cases, would you mind passing my contact information on to them – this is very much appreciated.

Kelly Wilson 613-695-9250 Top 1% Canada Mortgage Agent