As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate.
At 10:00 am EST, Wednesday January 22nd, 2014 the Bank of Canada again did what we expected them to do … they continued to maintain their overnight rate. What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%. This is great news but don’t forget to make the most of the low payments you still have, as the rate will increase in the future.
Did you or someone you know blow their budget over the holiday season? Don’t forget I offer the lowest rate visa in the country with one of the best reward programs! Transfer your balance to a lower card and breathe a little easier by applying from my webpage at http://www.patriciacollins.ca/index.php/page/dominion-lending-visa. Or talk to me about consolidating your debt into your mortgage and dropping the rate on your high interest cards and loans even lower. I will be happy to talk with you and help you get back on track!
Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision yesterday:
“Inflation in Canada has moved further below the 2% target, owing largely to significant excess supply in the economy and heightened competition in the retail sector. Global growth is expected to strengthen over the next two years with the US leading this acceleration, aided by diminishing fiscal drag, accommodative monetary policy and stronger household balance sheets. The improving U.S. outlook is affecting global bond, equity, and currency markets. Growth in other regions is evolving largely as projected. In Canada, growth improved in the second half of 2013. However, there have been few signs of the anticipated rebalancing towards exports and business investment. Stronger U.S. demand, as well as the recent depreciation of the Canadian dollar, should help to boost exports and, in turn, business confidence and investment”.
Based on this news, the Bank still does not expect to increase their rate in the foreseeable future with any change most likely to occur late 2014 or even not until 2015! Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won’t see a large significant increase all at once.
Fixed rates dropped just slightly since the last announcement to around 3.39% to 3.59% for a five year fixed term.
Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, I’d recommend that you remain with your current variable rate product if you have a good rate as the interest is lower than a fixed term rate right now. However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is March 5th, 2014 at which time I’ll be in touch again.
I wonder if I can ask a favour – this is a great time for first time home buyers who are thinking of purchasing in the Spring to start with a pre-approval plan now to get them on track and save unnecessary interest. Also if you hear a friend or family member talk about going through a financially tough time – maybe I can help with some budgeting and debt consolidation options for them. In either of these cases, would you mind passing my contact information on to them – this is very much appreciated.
Have a wonderful weekend!
Vancouver Mortgage Broker