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 September 5, 2018, the Bank of Canada maintained their overnight rate which in essence means no change to your interest rate. This is good news since we have seen a few rate increases this year. I want to stress to you again; areyou REALLY making the most of these low interest rates?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?
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 ofunnecessary 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.
To continue with the Bank of Canada news, here is an excerpt of the announcement and what they had to say about their decision:
“CPI inflation moved up to 3% in July. This was higher than expected, in large part because of a jump in the airfare component of the consumer price index. Wage growth remains moderate.
The US economy is particularly robust, with strong consumer spending and business investment. Elevated trade tensions remain a key risk to the global outlook and are pulling some commodity prices lower. The Canadian economy is evolving closely in line with the Bank’s July projection for growth to average near potential. GDP growth is expected to slow temporarily in the 3rd quarter, mainly because of further fluctuations in energy production and exports.
While uncertainty about trade policies continues to weigh on businesses, the rotation of demand towards business investment and exports is proceeding. Despite choppiness in the data, both business investment and exports have been growing solidly for several quarters. Meanwhile, activity in the housing market is beginning to stabilize as households adjust to higher interest rates and changes in housing policies. Continuing gains in employment and labour income are helping to support consumption. As past interest rate increases work their way through the economy, credit growth has moderated and the household debt-to-income ratio is beginning to edge down.”
Fixed rates haven’t really changed at all since the last announcement and are around 3.19% to 3.49% for a five-year fixed term.
Recent data is reinforcing that higher interest rates will be warranted to achieve the Banks desired inflation target. They will continue to take a very gradual approach that will be guided by incoming data specifically the economies reaction to higher rates as well as NAFTA negotiations etc. Based on the anticipation that the prime rate will still remain low for a while 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 24, 2018.
I wonder if I can ask a favour, if you hear a friend or family member talk about going through a financially tough time – maybe I can help with some budgeting, credit counselling and debt consolidation options for them. In any of these cases, would you mind passing my contact information on to them – this is very much appreciated.
I’ll be in touch again for the next announcement on October 24, 2018.
Phone: (780) 244-0505