Good morning ,
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
. At 10:00 am EST, Wednesday April 13th, 2016, the Bank of Canada maintained their overnight rate which 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, but we also have to recognize that it is a reflection of the slow economy.
As the weather warms up you might be thinking of some renovations, moving homeor taking advantage of the low interest rates and purchasing a cottage, rental property or somewhere for a family member to live in. Let’s chat about your options – it is never too late, or early, to start planning especially as it has been proven that real estate is an amazing long term investment! Chat to me about your options … I’d be happy to make those plans into realty.
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:
“After a slow start to 2016, the US economy is expected to regain momentum, but with a lower profile and a composition that is less favourable for Canadian exports. Financial conditions have improved, partly in response to expectations of more accommodative monetary policy in some major economies. Prices of oil and other commodities are off their earlier lows and slightly above levels assumed by the Bank in January, but remain well below historical averages. Nonetheless, the Bank expects deeper cuts to investment in Canada’s energy sector than were forecast in January. Meanwhile, the Canadian dollar has firmed, reflecting shifting expectations for monetary policy in Canada and the US, as well as recent increases in commodity prices. The Canadian economy’s complex structural adjustment to the oil price shock is ongoing and will
dampen growth throughout the Bank’s projection horizon. Still, it does appear that the positive forces at work in the economy are starting to outweigh those that are negative.
”The Bank of Canada is still concerned with the financial vulnerabilities as they continue to edge higher, in part due to regional shifts in activity associated with the structural adjustment 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 have only fluctuated a little since the last announcement, and are around 2.64% to 2.84% 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 May 25th, 2016.
I wonder if I can ask a favour, you might know someone who is unfortunately having a tough time right now with maybe too much debt or recent loss of income.There are many options to help using debt consolidation or access to some funds to get thru the tough times using the equity in their home. I have found recently that many clients who have mortgage renewals are currently being offered rates much higher than we can acquire. Please don’t sign your mortgage renewal, have them talk to me so I can save them some money. Don’t hesitate to ask them to reach out to me – I can provide a pro bonus consultation.
. Yours truly,
Eva Neufeld AMP