The Interest Rates Of Mortgage In Canada Are About To Rise
Interest rates mortgage Canada is currently at an all-time low. For example, if you had taken a loan or a mortgage for seven years for your property, you would have to pay the interest at a rate of 5.25 percent only. These are historic lows for the economy. However, all this is about to change. Remember Mark Carney, the Bank of Canada’s Governor’s statement that the mortgage rates would begin to climb from July 2010 onwards? We are awaiting an announcement any time soon.
In fact, there is a lot of speculation in the market that the announcement about a rate hike for interest rates mortgage Canada might take place even before July. This is because the economy of Canada has been performing better that anticipated and the time seems appropriate to withdraw the incentives and increase the rate. Of course, the mortgage rate increase might have a negative impact on the housing market. But then again, there is so much demand right now that a .25 percent increase might be overlooked by most buyers. Only time will tell what happens.
Interest Rates Mortgage Canada – Benefit from Low Rates Now
If you are already on a mortgage, the increase will affect you because you will need to shell out more money on the increased interest rate. On the other hand, if you have been thinking of getting your mortgage refinanced or are planning to buy property, then this is the time to get busy. Take action now to gain from the low interest rates mortgage Canada.
Here Is A Five-Point Plan That Can Help You Gain Before The Interest Rates Mortgage Canada Go Up
- Gather Information: Find those mortgage documents and go through them carefully. Find out the rate at which you are paying presently. Take a look at the mortgage and when the refinance is due. What is the penalty if you break the existing agreement? You will need to know all this to decide your options.
It is also good to find out at the rate for new customers by your lender. Compare this with the other interest rates mortgage Canada of the competitors. This includes the specialty lenders and brokers too. Determining this will let you find out what the benchmark is for a competitive rate.
- Have A Talk With Your Lender Or Shop For A New One: To get a good deal, you will always have to ask for it. The fact that you have always made the payment on time and never missed on your repayments, proves that you are a loyal customer, and so you can ask for some reward (remember, there are many who default on their mortgage payments). Your clean track record might get you a good deal.
So call up the customer care and let them know that you might be switching over to a competitor because of better rates. Chances are that you might be offered a rate, which combines your existing rate and the one of a new product. This will surely bring down your rate and save you money.
There are many customers who do not think twice before signing a document. Never do this. Shop around for the lowest rate and ask for a good deal from the provider. The fact is that complacency is always costly. There are some lenders who are grabbing the market by offering great deals. And some of them are even offering cash back.
- Seek Professional Advice: The fact is that there are not too many people who understand the finer details of mortgage that well. For example, what is the difference between Fixed and Variable? Which one is better – monthly or bi-weekly rapids? There could be a lot of questions.
Approach an expert in mortgage and seek personal advice. Ask the expert to recommend the best product for your needs. The specialist can tell you whether you should refinance at the current rates considering the penalty that will be charged for breaking the contract. And he can, of course, help you in finding the most attractive interest rates mortgage Canada.
In a recent study carried out by the Canadian Association of Accredited Mortgage Professionals, it was found that an average person who renegotiated using a broker was able to reduce the interest by 125 points on an average. On the other hand, those who tried negotiating themselves were only able to get a low reduction.
- Get The New Interest Rates Mortgage Canada Locked In: If you are still undecided about switching the lender, think about whether you can get pre-approved by the new lending company, and ask for a lock-in of the low rates that you have been offered. In midst of pre-approvals, your rate will be locked in for 120 days and there will be no charge. You will then have 4 months to take a decision and shop around for some more interest rates mortgage Canada. The rates may climb before you take a decision, and you can be glad that your mortgage rates were locked.
This approach is also good if you haven’t yet found the property that you intend to purchase. When the offer rates are locked, you do not have to rush to find that property. A hasty decision is almost always a wrong decision.
- Pay The Principal As Down Payment: The fact is that you can save a lot of money if you pay off the principal as a down payment. After all, the less money you owe, the lesser you pay as interest. This was the traditional way the loan market worked, but with competition, there are some lenders who are waiving off the principal payment today. However, you should try to reduce the mortgage amount as much as you can.
Here’s another thing you could do. Switch over from the monthly repayment plan (most people repay once every month) to a bi-weekly payment system. This can save you a lot of money on your mortgage payments. Or if you maintain the same amount on your repayments, you could reduce the term by as much as three years. You could also consider making lump sum payments from time to time or make a double repayment on some months whenever you are comfortable doing it. This will help you reduce the burden.
The rising interest rates mortgage Canada can work for you if you plan in advance and if you plan it well. So do not sit back and wait for the news to hit you. Take action now.