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Bank of Canada Maintains its Rate

05 Dec

With the wintery wintery weather and the beautiful colors and lights of the holiday season. I have some great news to add to your festive spirit!

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 December 5, 2018, the Bank of Canada maintained their overnight rate which in essence means no change to your interest rate. This is great news which I’m sure puts a smile on your face during this holiday season.

I wanted to spend a few moments again to discuss your personal financial situation. 2016, 2017 and 2018 have been quite the roller coaster for the real estate market. Both from a mortgage legislation stand point as well as the actual home prices and now a rising interest rate environment. I’m sure you might be confused on what this all means to YOU and your situation. You might be asking yourself how will all this impact you and your plans for borrowing funds in the future or even an upcoming mortgage renewal– whether it is refinancing to maximize the low interest rates and equity in your home, purchasing rental properties or moving up into a bigger home?  Call me now for a pro bono consultation to review your current financial situation and let’s start planning now for 2019!

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:

“The global economic expansion is moderating largely as expected, but signs are emerging that trade conflicts are weighing more heavily on global demand. Recent encouraging developments at the G20 meetings are a reminder that there is an upside as well as downside risks around trade policy. Growth in major advanced economies has slowed, although activity in the US remains above potential.

Oil prices have fallen sharply recently, reflecting a combination of geopolitical developments, uncertainty about global growth prospects, and expansion of U.S. shale oil production. Benchmarks for western Canadian oil – both heavy and, more recently, light – have been pulled down even further by transportation constraints and a buildup of inventories. In light of these developments and associated cutbacks in production, activity in Canada’s energy sector will likely be materially weaker than expected.

The Canadian economy as a whole grew in line with the Bank’s projection in the third quarter, although data suggests less momentum going into the fourth quarter. Business investment fell in the third quarter, in large part due to heightened trade uncertainty during the summer.

Household credit and regional housing markets appear to be stabilizing following a significant slowdown in recent quarters. The Bank continues to monitor the impact on both builders and buyers of tighter mortgage rules, regional housing policy changes, and higher interest rates

The Bank continues to indicate that rates will continue to rise despite the slower momentum, but the pace of these increases will depend on a number of factors. They want to monitor the effect of higher interest rates on consumption and housing as well as global trade policy developments. The persistence of the oil price shock, the evolution of business investment, and Canada’s economic capacity will also be closely watched!

Fixed rates haven’t changed much since the last announcement and are around 3.69% to 3.79% for a five-year fixed term.

In most cases, variable rate products are lower than current fixed term rates, however if this rising interest rate climate is making you anxious, locking in now might be a good option. Call me to book a pro bono consultation and let’s discuss your current financial situation. I’ll be in touch again for the next announcement on January 9, 2019.

I also wonder if I can ask you a favor. With our current rising interest rate climate, anyone you know who might be looking to jump into the housing market might be losing precious purchasing power the longer they wait. The more interest rates go up, the less they qualify for. My expertise in helping everyone get the right financing for their personal situation! Would you mind passing my contact information on to them – I’ll provide a pro bono consultation to provide some great options on how I can help – this is very much appreciated.

Yours truly,

Eva Neufeld
Mortgage Tailors

 

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