With the Bank of Canada holding rates steady this September, the same is not the case for the bond market, which impacts fixed rates. In every interest-rate market there are many factors leading to an increase and we are hoping to provide a little bit of clarity on what is happening and what it means to you and your loved ones. We tell you this in advance to be proactive to take care of you, as our mortgage family, so as you hear the news about the changes you have comfort we are here to lead with clarity.

At this time, we see fixed rates increasing as the bond market increases, and our economists anticipate an increase October 24^th  2018 from Bank of Canada for variable rates as well. This is largely due to the trade deal now being completed and the LNG deal approved.

Why do we note this information and how does it relate to you?

If you are in a variable rate, you will want to: 

1. Review your lock-in options by contacting us or your lender directly (every lender has different policies in allowing us to help or not). Knowing it’s unlikely the prime rate will reduce and fixed rates are on the rise, there could be a sweet spot to review your options now.
2. If you decide not to lock in, it’s time to review your discount to see if a higher one can be obtained elsewhere.

Locking in won’t be for everyone, especially if you are making higher payments and your mortgage is below $300,000, which most people fit and will continue on that path. Also if your discount is above .6 below prime you may want to wait and watch the market. Locking in will be around 1% higher rate than you are likely presently paying.  If knowing you can likely lock in around 4% now is most attractive to you, this may be your time.

If you are in a fixed rate:

1. If you obtained your mortgage in the last year, stay put.
2. If you are looking to move up the property ladder or consolidate debt, get your application in to us ASAP so we can hold options for up to 120 days.
3. If you are up for renewal this year or know someone who is, secure your options now with us to weight out the savings prior to renewal with us keeping a watchful eye on the market.

Keep in mind that if you or someone you care about has an average mortgage of $350k and got it a few years ago at 2.49% now a qualified applicant can expect about 3.89% which is a payment increase of $254 dollars a month, so increasing your payment now will protect your equity, and you from future payment shock.

Please reach out to us so we can help ensure you or a loved is on the right path in our ever changing market. 604-802-3983 or callateam@dominionlending.ca

Here to help, Angela Calla

Angela Calla leads The Angela Calla Mortgage Team with Dominion Lending Centres, and is an award winning #1 best seller of The Mortgage Code.

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