This week the Bank of Canada has again maintained their overnight rate. Not only does this mean variable rate mortgages, line of credit and student loans will remain unchanged, but new home buyers continue to have favourable lending conditions.
Since the last announcement, several changes have allowed home buyers to gain a better position and more confidence when entering the market. The new First Time Home Buyers Incentive Program that helps make owning a home more affordable has launched this week. This program is specifically designed to reduce monthly carrying costs. The Incentive enables first-time homebuyers to reduce their monthly mortgage payment, without increasing the amount that they must save for a downpayment. Check out if you are eligible and how this might help you save money on your monthly carrying costs here
Additionally, the qualifying rate has dropped as well which could also increase a borrowers purchasing power. Learn more about changes to the qualifying rate and what this means for you.
Barb Pinsent from Mortgages By Barb says “Fixed rates have dipped slightly since the last announcement and are around 2.39% to 3.19% for a five-year fixed term.”
Even though Canada’s economy is operating close to potential right now, escalating trade conflicts and related uncertainty are taking a toll on the global and Canadian economies. In this context, the bank will keep a very close watch on incoming data, with the potential to changing rate in the future – there is even rumblings they may drop rates if needed. Based on the anticipation that the prime rate will still remain low BUT fixed term rates have dropped, Barb recommends chatting to a Mortgage professional. “It may be worth switching to a fixed rate if your current variable rate mortgage is higher than a fixed term.”
Reach out to Barb on 780-370-1490 and she can calculate what your new payment would look like and let you know if a change may be suitable for you. The next announcement is October 30, 2019.