Last week, the Bank of Canada dropped their overnight rate by 0.50% and lenders have been responding.
If you have a variable rate mortgage, line of credit or a student loan, you will be informed directly by your lender shortly, if not already, on the change to your rate and payment(s), if applicable.
Barb Pinsent from Mortgages By Barb says “If you are affected, this is great news for you to go into the spring with confidence that you continue to save even more unnecessary interest.”
Things have been busy since the last announcement and here are some highlights:
Stress Test Changes:
Effective April 6, 2020 for all insured mortgages (less than 20% down payment), the rate used to qualify borrowers will now be the greater of the borrowers’ contract rate or the weekly median five-year fixed rate plus 2%. For some this will have a small impact but for others it could be the stepping stone to purchasing a home or considering moving up! Share this with anyone thinking of getting into the Fort McMurray market!
Rates Coming Down:
With the global concerns not only on the coronavirus but oil price declines and a weakened US economy the bond market has dropped as investors look for more secure investments. This drop in the bond market yield typically follows fixed term rate drops and we also saw the variables rates drop. This is great news if you are thinking of making a change that impacts your mortgage and it also means the lower qualifying rate with the stress test changes. Maybe it’s a great time to use the equity you have in your home for a debt consolidation to save you unnecessary interest.
Consumer Confidence & Toilet Paper:
Despite the above, consumer confidence might be ebbing lower as people are worried about the coronavirus. Whether you are looking for a bigger place to stash all that toilet paper or considering buying an investment property, seeking advice from a Fort McMurray mortgage professional like Barb is the best way to understand how this may look for your personal situation.
Based on the anticipation that the prime rate will remain low and maybe go even lower, Barb recommends that you reach out to understand how this could look for you,
“I remain with my clients through the life of their mortgage to ensure that they continue to stay up to date on industry changes and changes to mortgage rates. Plus, I am here to assist with new mortgages. As we step into the busy spring/summer market with the benefits of rate changes and a drop to the stress test rate, it’s the perfect time to be knowledgable with how a mortgage may look for you.”
If you would like to know what your new payment will look like, exploring investment opportunities or looking to move into your new home, reach out to Barb at 780.370.1490. The next Bank of Canada announcement on April 15th, 2020.