Thursday, August 20, 2015

Back to school Clever Lending Fall Update

Clever Lending Mortgage Rates & Bank of Canada Announcement

The Bank of Canada announced on July 15th that the bank has lowered the overnight rate target to 1/2 per cent. Banks and mortgage lenders have followed suit and lowered the prime rate to 2.70% to 2.75% depending on the institution. Your mortgage lender will contact you if your mortgage will be affected by the new lower prime rate.
*Rates and conditions, including prime and qualifying rates, are subject to change without notice.
10 Tips On How to Tackle Your Debt
  • Set a specific goal with a deadline
  • Set up an automatic monthly payment from your bank account
  • Make the payment more than the minimum and enough to meet the deadline
  • Pay off the debt with the highest interest rate first
  • Put your credit cards on ice
  • Trim your expenses
  • Refinance your mortgage to consolidate debt or lower payments
  • Take advantage of balance transfers
  • Reward yourself when you reach a milestone
Variable Rates Are More Expensive Than You Think
  • Today's variable rates are as low as 1.95% but 5 year fixed rates are as low as 2.54% *Rates are subject to change.
  • Many homeowners do not qualify for a variable rate mortgage because more income is required to qualify for a variable rate than a fixed 5 year rate. 
  • By the time variable rate clients hear about the Bank of Canada hiking rates it's usually too late. Fixed mortgages are priced off the bond market and traders start raising bond rates in anticipation of, and well before, Bank of Canada moves. 
  • Conversion rates from lenders are not the promotional rates. So if you are in a variable rate and want to lock into a fixed rate you will likely not be offered the promotional 2.54-2.69% 5 year fixed rate (based on today's promotional rates) and it will be difficult to negotiate a good fixed rate because they know you are "stuck" because you would have to pay a penalty to break your mortgage and/or move your mortgage to another lender. You must lock into a fixed rate that is longer than the term remaining on your variable rate mortgage.