INTEREST RATES ARE ON THE WAY DOWN !!!
WHAT CAN I DO IF I AM ALREADY LOCKED IN?
Great news for Canadians! The Bank of Canada is expected to decrease their Prime Rate by .25%, possibly .50% when The Bank of Canada meets later this month. Prime rate is currently 3.50% and could drop to 3.00%. What does this mean for you, the consumer?
Those of you that have variable rate mortgages will immediately see a drop in interest rates by the full decrease. Lines of credit will also drop immediately. Fixed rate mortgages should start to decrease after the announcement. It is possible that we may see the 5 year fixed rates go down to the mid 4% range by the time our warm summer weather returns.
But what about those of us that are currently locked into a fixed rate that is higher than what the market is offering? It might be time for a mortgage tune-up. Borrowers should contact a mortgage broker, who can explore all of their options and recommend the best plan. It may be wise for some borrowers to pay the penalty, and either sit in a convertible product or open product until the rates subside. These products can be great places to sit and wait for the lowest rates to become available and then lock in and save yourself thousands..
A mortgage tune-up will weigh out the pros and cons of refinancing your mortgage now. In some cases, you could save $2,000 to $5,000 over the next 5-year term. On a 25-year mortgage of $100,000, a difference of 1.0% in the interest rate could save you $4,675.22. Put that money in your pocket, instead of the bank’s profit margins.
Send us your comments at Mortgage@RealEstateStop.com.
For further information, call us at (705) 256-5626, or visit us at “www.AlgomaMortgage.com”.
Real Estate/Mortgage Broker
Danny Alessandrini is an Accredited Real Estate and Mortgage Broker serving the Algoma District for 30 years.