As you might have seen in the news, the Bank of Canada cut it's overnight rate to 0.5% from 0.75%. Here is what this change might mean to you.
If you currently have a fixed rate mortgage, your mortgage payments will remain unchanged. However, if your mortgage is coming up for renewal in the next 16 months, now is the time to talk to your mortgage broker and discuss what your options are to save more of your money.
If you have a variable rate mortgage, you may see your mortgage payments reduce over the next few months. The Variable rate is dependent on the lender’s Prime Rate. The Prime Rate is set at the discretion of each lender and is influenced by a number of economic factors, one of which is the Overnight rate.
For those who are thinking about opening a HELOC (Home Equity line of credit) to do an upcoming renovation or to put into a college fund – the cost to borrow may come down along with the variable rate.
If you have any questions about your home financing, feel free to contact me and I can help you work on a long term plan to reach your home ownership goals.