Mortgage Intelligence

Oshawa's Mortgage News Desk!

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After the rate hike, what’s next?

On July 12th, for the first time in seven years, the Bank of Canada increased the overnight rate by .25%, withdrawing some of the stimulus that was needed after the oil price collapse and 2008 financial crisis. Variable rate mortgages and lines of credit will see higher rates and modest payment increases. Fixed-rate mortgage – which are based on the bond market – had already been trending slightly upward, although if you have a fixed mortgage, you aren’t affected until it’s time to renew. Keep in mind that this is a very small increase, and we’re still in an ultra-low rate environment and an incredibly stable market. We’ve also seen increases before to only see them decrease again. But rates have risen, so here are answers to the questions we’re getting:

Should I jump into the market now?  Actually, our advice is always the same: buy when you are financially ready. Don’t jump the gun just because rates “may” go higher.  But by all means, if you’re thinking about buying, we can arrange a pre-approval so you’re protected from rate increases while you shop around.

Should I lock in my variable rate mortgage ASAP? That depends. Your new rate with the hike is probably still less than current 5-year fixed rates, and you’ll still likely pay less if there is another .25% increase. So why pay more money than you have to? Stick with your original strategy of focusing on payment vs. rate. But if it’s going to keep you awake at night – or the few extra dollars are hard to find in your budget – then let’s talk about your conversion options. Remember though, you should be confident you’ll stay in a 5-year fixed mortgage for the full term. Breaking a fixed mortgage can result in some tough penalties.

What if my mortgage is coming up for renewal? Don’t feel rushed or pressured by a renewal letter or call. Let’s discuss your options. We’ll review your renewal offer together and we’ll shop around to see if it’s really the best deal available. Got too much other debt? This may be the time to roll it into a new mortgage to boost cash flow and save on interest costs.

Should we talk? Yes for sure. You should have confidence in your mortgage plan and that’s why professional mortgage advice is so critical.  We have access to a wide range of lenders and know the right questions to ask to assess your situation and make sure you have the best mortgage strategy. Contact the team at at 1 866 452-1100 to speak to an expert or apply online now!


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Are you ready for interest rate hikes ahead?

It’s time to evaluate your financial future


Image by courtesy of Fermanian Business & Economic Institute

Of recent times, there have been lots talk of economic prosperity in Canada this year and also speculation of interest rate hikes sometime in the spring of 2015. Central Bank rates are expected to rise to around 1.25 to 1.50 percent by the end of this year. For us consumers, this would mean higher borrowing costs and higher payments on debts such as auto and other consumer loans, lines of credit and variable rate mortgages. Indications of economic growth and interest rate hikes are intended to steer consumers like you & I to evaluate our financial future and plan ahead in anticipation of any changes.

One such payment to evaluate will be your mortgage. Make sure you tailor make your mortgage to your specific needs not just the interest rate. For example, pre-payment flexibility/penalty, amortization and overall debt exposure. The lowest interest rate may not always be the best option for you as it may tie you to a higher pre-payment penalty.

Please read the articles on CBC News and The Globe and Mail for more information.

If you are looking to get a first mortgage or refinance and need advice on options available to you, contact the team at today. To get pre-approved today, apply now through our secure online website or speak to one of our agents at (866) 452-1100.