For your information - September 2008
Well it was a short summer with less than spectacular weather, and the growth in our economy was equally uneventful. Inflation seems to be running at 3.4%, so no interest rate hikes are expected. Conversely, there is a lot of pressure on the Bank of Canada to lower interest rates to stimulate our businesses and exports. It appears recovery in the U.S. will take longer than expected, which is where the majority of Canadian exports go. Fortunately, Canada is better positioned than most because of our commodity based economy. Regardless, international demand will be less for Canadian goods and it is predicted our dollar could settle down to about 85 cents within the next year.
So what does this have to do with mortgages? The Bank of Canada had one of their 8 annual meetings Tuesday September 3rd where prime rate was left unchanged. Both fixed and variable mortgage rates really have little room to go up or down. Again, this is reinforcement to take a mortgage based on Bank Prime…in other words, a 5-year variable mortgage at about 4%. Even if it gets adjusted a couple of times a year, it is still outperforming fixed mortgage rates which are more like 5%. Not to mention, you can convert out of a variable mortgage at any point for FREE while you are locked into a fixed mortgage. The Bank of Canada meets again on October 21st and don't be surprised if they lower Bank Prime…naturally, I will keep you posted.
Zero percent down is coming to an end on October 15th. This option has been an excellent tool for those who want to invest their money elsewhere rather than in their downpayment. It goes without saying that we are disappointed this product will no longer be available, yet there are other options for those who would prefer to not commit any of their savings to buying a home. I can make sure you are aware of ALL the mortgage strategies to save money…a good interest rate is only part of a solid "Mortgage Plan". We also have to focus on pre-payment privileges, administration fees, compounding, tax-deductibility, amortization strategies, etc. When you want to learn more, feel free to contact me anytime.
…DO NOT let your Bank plan your finances. Please take responsibility for making independent, educated choices and that's where we can be a great unbiased resource!
Building wealth using a re-advanceable mortgage
Re-advanceable mortgages with home equity lines of credit continue to gain in popularity and are the fastest growing mortgage category. What makes this mortgage such a great fit for many Canadians is that those of us in our homebuying years are always juggling to find a balance between paying off our homes and investing for the future. Using a re-advanceable mortgage that includes a line of credit (LOC), we can actually do both. Click here to read more.
