While people are panicking over the mass shortage of toilet paper and stocking up, there is also something else to be considering acting fast on today. There is no better time than now to start shopping for a new mortgage or even renegotiating your new mortgage. Last week, Bank of Canada announced that Prime rate was reduced from 3.95% down to 3.45% primarily due to the current economic conditions with regards to the global crisis and Coronavirus.
We are noticing lenders across the board reducing their interest rates on fixed mortgages. Bond prices are starting to decrease as well. We see a window of opportunity here with helping our clients save money. In 2008, when Prime was 5.75%, Bank of Canada announced multiple rate cuts and in just over one year, Prime was reduced by more than 3% down to 2.45%!
What happened during that time was variable-rate mortgages originally started selling at Prime less 1% which then led lenders to cut back on their discounts and shift their products to Prime plus .80% all within a year. This was because the variable-rate mortgage was no longer profitable for the lenders. We are anticipating that this is going to repeat as interest rates start declining further.
If you:
- Are currently n a variable rate mortgage with a discount of perhaps prime less .50% or lesser discount (prime less .40% or prime less .20%).
- Have a home equity line of credit at prime plus .50% or greater.
- Have any high-interest credit cards or bills.
It is a really good time to see if you would qualify for a deeper discount off prime today. To break most variable-rate mortgages, the lender will charge a maximum of three months interest penalty along with a minimal discharge fee, however, we feel the savings would far exceed the penalty costs. There is also an opportunity if you are currently in a fixed-rate mortgage and are looking to explore some options with reducing your current rate. There is a very limited time to take advantage of the deep discounts off Prime that are available today. Feel free to schedule a time with me to go over your mortgage options. Don’t get left behind!
