With fixed rates that have risen from all time lows and not likely to decrease again, variable rate mortgages may be an option for you. Also, with the rate discounts looking good it may be time to think about going with a variable. Currently the best variables are as follows:
*Prime rate today is currently 2.50%
1) 5 year variable closed at Prime – 0.60% (1.90%) – offered by one lender with great pre-payment privileges.
2) 3 year variable closed at Prime – 0.65% (1.85%) – offered by one lender with great pre-payment privileges.
One factor when deciding if a variable rate mortgage is for you is to know that as the prime interest rate fluctuates so can your mortgage payments. This means with today’s prime rate still at a very low level and expected to increase about 3% over the next three years, your payment may increase substantially. In addition with the new qualifying rules brought in place recently by the federal government you now must qualify at the 5 year bank rate which is currently 5.99%. Therefore you will not be able to qualify for as large of a mortgage as if you went with a 5 year fixed rate mortgage.
Please contact us today if you can handle the payment fluctuations and are able to qualify for your purchase at the higher qualifying rate or to inquire further if the variable rate mortgage is right for you.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
Wednesday, June 16, 2010
Tuesday, June 1, 2010
Prime Rate Increased By 0.25% Today. Is There More To Come?
The Bank of Canada today announced the bank rate has been increased by 0.25% to 0.50%. With this announcement the lenders have subsequently increased their prime rate 0.25% to 2.50%. Over the past few weeks this increase was widely expected as the lenders have increased their fixed mortgage rates a few times during this period. Prime at 2.50% is still considered historically low however, the big question is, are there more interest rate increases expected in the future and when.
The prime interest rate will be increasing in the future. Most economists expect the prime rate to increase another 2% to 3 % over the next 2 to 3 years. With today’s Bank of Canada announcement it is very uncertain whether the interest rates will increase quickly in the short term, stay low in the short term and then increase faster in the future, or increase gradually over time. According to the Bank of Canada future interest rate increases will be dependent on a few factors: 1) How well our economy is growing. If Canada`s economy continues to grow at this fast pace, provided today`s increase does not slow down the economy, expect to see another interest rate increase at the next scheduled rate announcement in 6 weeks. 2) Inflation. If inflation is still increasing and is near or over the Bank of Canada`s 2% target also expect an increase in interest rate in 6 weeks. 3) How other global economies are faring, such as the United States and Europe. The Bank of Canada will have to look at these other global economies and how they are prospering. The degree of influence these global economies are having on Canada`s economy will be factored into the next rate announcement in 6 weeks. Looking at these three factors should help us answer the question of when and how fast the prime rate will increase in the future.
What does this mean to your mortgage rates? Historically speaking those who choose the variable rate mortgage over fixed rates saved more interest over the long term. However, you must remember this is over the long term so trying to time the market and flip between variable and fixed rates can be quite difficult and usually never works. In addition, with the variable rate mortgage, over time your payments will fluctuate. This means with the expected increase in the prime interest rate of 2% to 3%, your payments will increase as well and can be very substantial. If you are able to budget for your payment fluctuations, variable may work for you. If you do not like your mortgage payments changing during the mortgage term then a fixed mortgage is best where the payments do not change for the duration of the term you chose.
Whether you choose to go with a fixed or variable mortgage rate it can be a lot of information to process. You must remember that the decision should be based on your situation and what you and are comfortable with, not what rumours you are hearing is best. Remember there is no wrong decision when it comes to your mortgage no matter what someone tells you as they do not know your situation. We can help you to look at your situation and help you decide the best mortgage for you so contact us today.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
The prime interest rate will be increasing in the future. Most economists expect the prime rate to increase another 2% to 3 % over the next 2 to 3 years. With today’s Bank of Canada announcement it is very uncertain whether the interest rates will increase quickly in the short term, stay low in the short term and then increase faster in the future, or increase gradually over time. According to the Bank of Canada future interest rate increases will be dependent on a few factors: 1) How well our economy is growing. If Canada`s economy continues to grow at this fast pace, provided today`s increase does not slow down the economy, expect to see another interest rate increase at the next scheduled rate announcement in 6 weeks. 2) Inflation. If inflation is still increasing and is near or over the Bank of Canada`s 2% target also expect an increase in interest rate in 6 weeks. 3) How other global economies are faring, such as the United States and Europe. The Bank of Canada will have to look at these other global economies and how they are prospering. The degree of influence these global economies are having on Canada`s economy will be factored into the next rate announcement in 6 weeks. Looking at these three factors should help us answer the question of when and how fast the prime rate will increase in the future.
What does this mean to your mortgage rates? Historically speaking those who choose the variable rate mortgage over fixed rates saved more interest over the long term. However, you must remember this is over the long term so trying to time the market and flip between variable and fixed rates can be quite difficult and usually never works. In addition, with the variable rate mortgage, over time your payments will fluctuate. This means with the expected increase in the prime interest rate of 2% to 3%, your payments will increase as well and can be very substantial. If you are able to budget for your payment fluctuations, variable may work for you. If you do not like your mortgage payments changing during the mortgage term then a fixed mortgage is best where the payments do not change for the duration of the term you chose.
Whether you choose to go with a fixed or variable mortgage rate it can be a lot of information to process. You must remember that the decision should be based on your situation and what you and are comfortable with, not what rumours you are hearing is best. Remember there is no wrong decision when it comes to your mortgage no matter what someone tells you as they do not know your situation. We can help you to look at your situation and help you decide the best mortgage for you so contact us today.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
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