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Bank Of Canada July 2017

BANK OF CANADA INCREASED THEIR RATE

The Bank of Canada announced this morning that they will increase their rate from .5% to .75%.

The basics: What does this mean for you.  For all my clients who are in a variable rate mortgage your payment will increase $10-20/$100,000 of mortgage you have.  We are more than happy to calculate your new payment, although if you are in a mortgage with balance around $400,000 – you can expect to see about a $40/m increase.  The math on this will vary depending on the rate you received at the time of your initial mortgage but this is a very good baseline to work from.

Since the announcement this morning there have been a few more things I noticed.  Oil went up in price, the dollar also had growth.  While a lot of people may initially get scared or not know what to think, this is the first time in 7 years the Bank of Canada has made this kind of announcement.  This means there is a lot of strength in our economy and we are growing as a country and we are going in the right direction overall.

For anyone in a fixed rate mortgage you may think, well this doesn’t affect me.  YOU ARE CORRECT, but the Bank of Canada rate does not just apply to mortgages.  If you have a student loan, a secured line of credit or any other loan that is based on the rate determined by the Bank of Canada then yes you will see some increases.

I’m more than happy to help anyone who wants more information, please note this is a very small increase and should we expect more in the future we should talk at that point.

Please enjoy your summer, enjoy the heat and know that yes this is a new concept for us right now but overall our countries economy is picking up and this is good news all around.

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MORTGAGE RATES ARE AVAILABLE AT https://cma.me/ChantelleTaylor
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For more info, please check out this link.

http://www.cbc.ca/news/business/bank-canada-interest-rate-monetary-policy-1.4200814

Yours truly,

Chantelle Taylor
Mortgages Are Marvellous
587-899-4356
crtaylor@tmacc.com
24/7 Mortgage Rates/Advice Available NOW! Download it – https://cma.me/ChantelleTaylor

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Bank of Canada Jan 2017

BANK OF CANADA MAINTAINED THEIR RATE

Firstly, a very Happy New Year to you and your family – if one of your New Year’s Resolutions was to get back on track with your financial goals and wealth growth plans, now is a perfect time. This is the first of many announcements this year about interest rate changes that will impact a majority of your current and future debt – from mortgages and lines of credit to credit cards and personal loans. My New Year’s Resolution to you is to help ensure that the impact of interest rate changes to you is minimal – advising you on ways to have more of your hard-earned cash stay in YOUR pockets and doesn’t line someone else’s – saving you thousands in unnecessary interest along the way – imagine what you could do with an extra $5,000 or $6,000 this year? You may have already heard that the impact of recent mortgage legislation and qualifying changes has already impacted the borrowing power of many home buyers and owners, and we have also seen fixed term rates rise slightly. Just today one of the default insurers, CMHC, announced that they will be increasing their default insurance premiums effective March 1, 2017 – this typically only impacts those with less than 20% down payment. Now, more than ever, the benefits of receiving a pro bono consultation from your mortgage broker is key to ensuring you make the right decision on your biggest financial obligation while protecting your biggest asset – your income! _________________________________________________________________________________________________ TODAY This communication is going to focus on what the Bank of Canada had to say today and how that impacts you – reach out to me for a pro bono consultation on what we can do now to meet your 2017 financial wealth and freedom goals and start to save you some unnecessary interest. Here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts Prime Rate. At 10:00 am EST, Wednesday January 18, 2017, the Bank of Canada again maintained their overnight rate which means no change to variable interest rate mortgages. This is great news to start the year off as you continue to benefit from low rates which for sure puts a smile on your face as the temperature outside is a little frosty. Given the assumptions the bank made in its forecast, they are expecting an upward swing in economic growth in 2017 anticipating to reach full capacity by mid-2018. It is still anticipated that prime rates won’t start increasing until well into 2017 but we are being given the heads up that they will start increasing eventually. 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 have increased slightly since the last announcement, and are around 2.69% to 2.89% for a five-year fixed term. Also, remember that the prime rates and fixed term rates are impacted by two different sets of economic drivers and so increases in fixed rates doesn’t always mean the same increase in prime rates and vice versa. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I’d recommend that you remain with your current variable rate product as the interest is still 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. I’ll be in touch again for the next announcement on March 1, 2017.

 

Thanks

-Chantelle

Looking to buy a home? Ways to save for the down payment

Looking to buy a home? Ways to save for the down payment

You’ve decided to get into the housing market, scouted out neighbourhoods, maybe even attended a few open houses – but now reality is setting in. You need a down payment to buy a home, and you have nothing saved.

Read on for strategies and tips for saving for a down payment.
Pay off your credit card debt

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Tips for paying off your debt and saving for the future Tips for paying off your debt and saving for the future

If you have credit card debt, pay it off before focusing your attention on home ownership. For one, once your debts are paid off, you’ll have more money freed up to put toward your down payment. If you try to secure a mortgage with too much debt you may not qualify.

Need help paying off your credit card debts? Try one of these methods.

READ MORE: Snowball or stacking? How to pay off your credit card debt
Get your priorities straight

If you have decided that buying a home is your top priority, then you will most likely have to cut back on other spending.

Big ticket items like cars and vacations may have to be put off as you stow away cash for your down payment.

Create a budget and take a look at how you spend your money each month. Things like dining out at restaurants and shopping for non-essential items are easy expenses to cut back.

Do you smoke? What better time to quit? Not only will you improve your health, regular smokers could save thousands of dollars a year by kicking the habit.
Downsize your lifestyle

Are you a two-car family? Now would be a good time to consider getting rid of one. Vehicles cost Canadians thousands of dollars a year in car payments, repairs, insurance and gas. If you have one vehicle, consider giving it up for public transit (although that’s not always a viable option in some parts of the country).

Another way to downsize your lifestyle is with your living arrangement. If you’re currently renting a two-bedroom apartment, consider moving into a one-bedroom until you can get your down payment together. Those who are really serious about saving up for their home purchase have even moved back in with their parents on a temporary basis.

If you and your partner are buying a home together but currently live in separate residences, move in together to cut your monthly expenses in half.

Embrace frugal living in other ways such as swapping fancy vacations for staycations, going to the library instead of purchasing books, and seeking out cheaper forms of exercise (compare the cost of running outdoors to a monthly gym membership or annual green fees).

If you happen upon any “found” or “free” money – such as work bonuses, raises or gifts – stow it away for your down payment and resist the temptation to spend it elsewhere.
Save 20%

Your goal should be to save as large a down payment as possible. The bigger your down payment, the smaller your mortgage loan, which means you’ll save thousands in interest charges over the length of your mortgage.

Your down payment must be at least five per cent of the purchase price of your home, however, if you have anything less than a 20 per cent down payment you’ll have to purchase mortgage default insurance, or CMHC insurance.

This insurance protects the mortgage lender should you default on your mortgage payments. Mortgage default insurance shouldn’t be confused with home or property insurance. It does not protect the homeowner and it is completely avoidable.

The amount you pay for this insurance is determined by the amount of the mortgage loan and the size of your down payment.

Say, for example, you wanted to buy a house listed at $250,000. If you only had five per cent ($12,500) saved for your down payment, you’d end up paying an additional $7,481 in mortgage insurance. But if you saved 20 per cent ($50,000) you wouldn’t pay anything in mortgage default insurance (you can try out this handy calculator here).

Because most people can’t afford to pay mortgage default insurance in cash, this cost is typically added to your total loan and amortized over the length of your mortgage.
Calculate how much you need

If your goal is to save 20 per cent, calculate it by dividing the price of the house by 100, then multiplying that by 20.

For example: $250,000 / 100 x 20 = $50,000

If you’re starting from scratch, $50,000 may be a big number to swallow. But if you have set out a reasonable time frame to save for your down payment, it becomes more palatable.

Say you want to buy a home in five years. Figure out how much you’ll have to save each month over those five years to get your 20 per cent. ($50,000 divided by 60 months = $833.33 per month -a significant amount to be sure).

Now that you know how much money you’ll need to save each month, you can consult your budget and your priorities to see where you can cut back.
Borrow from your RRSP

If getting to 20 per cent by pinching your pennies just isn’t a reality, you could choose to borrow money from your RRSP to put toward your down payment.

Canada’s Home Buyers’ Plan (HBP) allows first-time home buyers to borrow up to $25,000 from their RRSP to buy or build a home. You must not have owned a home in the last five years and you must repay the money within 15 years. For more information on the rules surrounding the Home Buyers’ Plan, consult the Canada Revenue Agency.

READ MORE: How to borrow money from your RRSP for a down payment

Some people may recommend opening up a line of credit or securing a bank loan for your down payment, but this decision shouldn’t be taken lightly. When you borrow money from your RRSP or bank to bolster your down payment, you are adding an additional debt on top an already hefty mortgage debt.

Some experts advise that if you cannot save enough money for a down payment, you may need to look closely at your finances to determine if you can handle the long-term costs of home ownership (including property taxes, insurance, maintenance, utility bills — all of which are in addition to your mortgage payments).

A final tip – just because you can get a mortgage doesn’t mean you can afford it. Make sure you are aware of all of the costs associated with buying and owning a home. You can reference this list as a start.

Did we miss a good tip? Add it in the comments below.

Follow the conversation online at Globalnews.ca/smartmoney and on Twitter, #GNSmartMoney.

BOC May 25th, 2016 Mortgage Rate Watch

As you know variable rate mortgages, lines of credit and/or student loans are all based on the Prime Rate.  Here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate.

At 10:00 am EST, Wednesday May 25th, 2016,the Bank of Canada maintained their overnight rate which in essence means no change to the interest rate. This is still good news for the amount of interest that you will pay, but we also have to recognize that it is a reflection of the slow economy.

Summer looks like it is finally on its way with the weather warming up; are you thinking of some renovations or consolidating some debts that don’t seem to be going away anytime soon?   It is never too late, or early, to start planning for the future especially as rates are still at historical lows!   Chat to me about your options
I’d be happy to make those plans a reality and save unnecessary interest along the way.

The Bank of Canada is still concerned with the financial vulnerabilities and regional divergences underway in Canada’s economy.  It is still anticipated that rates won’t start increasing until well into 2016 even early 2017.  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 haven’t really changed at all since the last announcement, and are around 2.49% to 2.99% 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, unless you feel otherwise, I’d recommend that if your mortgage is variable rate you remain with your current variable rate product 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. I’ll be in touch again for the next announcement on July 13th, 2016.

I wonder if I can ask a favor, if you hear a friend or family member talk about going thru a financially tough time – maybe I can help with some budgeting, credit counseling and debt consolidation options for them.   Also if you have a friend or family member looking to buy their first home, would you mind passing my contact information on to them – this is very much appreciated.

Yours truly,
Chantelle Taylor
Mortgages Are Marvellous
587-899-4356
crtaylor@tmacc.com

Rate Update – Bank of Canada April 13 2016

As you know, variable rate mortgages, lines of credit and/or student loans are all based on the Prime Rate.  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 April 13th, 2016, the Bank of Canada maintained their overnight rate which in essence means no change to the interest rate. This is still good news, but we also have to recognize that it is a reflection of the slow economy.

As the weather warms up you might be thinking of some renovations, moving to a new home or taking advantage of the low interest rates and purchasing a rental property or somewhere for a family member to live in.  Let’s chat about your options – it is never too late, or early, to start planning especially as it has been proven that real estate is an amazing long term investment!   Chat to me about your options
I’d be happy to make those plans into realty.

The Bank of Canada is still concerned with the financial vulnerabilities as they continue to edge higher, in part due to regional shifts in activity associated with the structural adjustment underway in Canada’s economy.  It is still anticipated that rates won’t start increasing until well into 2016 even early 2017. 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 have only fluctuated a little since the last announcement, and are around 2.49% to 2.84% for a five year fixed term.

I’ll be in touch again for the next announcement on May 25th, 2016.

I wonder if I can ask a favour, you might know someone who is unfortunately having a tough time right now with maybe too much debt or recent loss of income.   There are options to help using debt consolidation or access to some funds to get thru the tough times using the equity in their home.    Don’’t hesitate to ask them to reach out to me – I can provide a pro-bono consultation to get them through this.

Yours truly,
Chantelle Taylor
Mortgages Are Marvellous
587-899-4356
crtaylor@tmacc.com

Do BoC rates impact you? 10 questions answered

Do BoC rates impact you? 10 questions answered

Why you should care about whether or not the Bank of Canada holds rates steady

by Romana King
March 9th, 2016

(Gary Waters/Getty Images)

The Bank of Canada announced today that it will hold its target rate at 0.5%. In the announcement, the BoC justified the hold on rates by stating: “The global economy is progressing largely as…anticipated…Financial market volatility, reflecting heightened concerns about economic momentum, appears to be abating. Although downside risks remain, the Bank still expects global growth to strengthen this year and next.”

The Bank did reference that while US economic growth will continue, the low level of oil prices we are currently experiencing will more than likely continue this year and this will dampen growth in Canada and other energy-producing countries.

Eight times a year, the Bank of Canada sets its key interest rate. This is a fancy way of saying it establishes an overnight target interest which is then used by banks to set the prime rate. This prime rate establishes how much it will cost to borrow, whether it’s a mortgage, a car loan or any other type of loan or debt.

Leading up to these routine announcements, there’s typically a flurry of commentary as experts weigh in on what a change—or even keeping with the status quo—could mean for the Canadian economy.
1. Why does the Bank of Canada change rates?

Despite all the attention mortgage rates get during Bank of Canada (BoC) rate announcements, our central bank’s focus is on the overall monetary policy of the nation. Monetary policy is the term that refers to the measures taken by the BoC to influence the economy by regulating the amount of money in circulation. In other words, it’s how the BoC tries to control the amount of money that flows in and out of Canada’s economy (both nationally and internationally).

History of monetary policy (and why it matters)

Up until the 1930s, the BoC’s monetary policy hinged on trying to protect a country’s exchange rate. As the rate dropped, central banks would become more restrictive about cash flow but this only helped push us into the Great Depression and was subsequently abandoned.

That’s when the central banks opted to monitor and control employment numbers. But by the 1970s North America was in one of the worst periods of stagflation—persistent high unemployment combined with high inflation—and this forced central banks to rethink their target. There was a brief stint with focusing on growing the nation’s money supply, but this broke down and by the 1990s central banks across the world were starting to adopt inflation rates as the primary target.
2. Why the 2% inflation rate? Here’s why the BoC reduces rates.

Since then, the primary objective for the Bank of Canada’s monetary policy is to keep inflation as close to 2% as possible. Technically speaking, inflation is an increase in prices, which reduces the purchasing value of money. Or in less technical terms: inflation makes the $20 you have today worth less in the future, because you can’t buy as much with that $20. It also means that your employer, who may be paying you $20 per hour now, will need to pay you more in the future. That’s precisely what the BoC wants through its inflation targets: to gradually and safely raise the standard of living for Canadians. Once the Bank sets its target-control inflation range, it analyzes the economy to see if prices are pushing up beyond that range, or falling beneath it.

In a nutshell, a 2% inflation target is the theorized equilibrium point between economic growth and a higher cost of living.
3. How does a 2% target impact monetary policy?

The BoC will use monetary policy to reach its 2% target by raising and lowering the target for the overnight rate (also known as the key policy rate or the short-term interest rate). This overnight rate is used by the BoC and by major financial institutions to borrow and lend to one another. How does that work? The target for the overnight rate is a half-percentage-point band. For example, the current BoC band is 0.25% to 0.75%. So, Bank A will loan money to Bank B at the top-end of the band of 0.75%. But Bank A will only give 0.25% in interest after Bank C deposits money with Bank A. The difference is known as ‘the spread’ and it’s how banks earn a profit (and raise funds for more loans, which are then used to earn more profits).
4. Does the overnight rate impact my mortgage rate?

Major banks and lenders use the overnight rate as a guide when setting their prime lending rate (the rate at which the bank’s best customers can borrow money). By changing the overnight rate, the central bank signals to big banks to also change their prime lending rates. Because banking is a competitive business, most major banks will comply.

If the BoC wants to reduce inflation it needs to cool the market and does this by increasing overnight rates. Major banks follow suit, by raising interest rates on variable mortgage rates, car loans, and other consumer loans. The theory is that Canadians will spend less if it costs more to borrow and this reduces spending and, ultimately, inflation.

If, however, the BoC. wants to increase inflation it will drop its overnight rates. This allows banks, lenders and credit unions to lower their mortgage rates, personal loan rates and credit card rates, which should stimulate more borrowing from Canadians. The logic is that Canadians will spend more when it’s cheaper to borrow money; this increases demand and, subsequently, boosts inflation.

Keep in mind, we’re only talking about variable mortgage rates, at this point.
5. So, what about my fixed rate mortgage?

While variable mortgage rates and other floating rate loans, like lines of credit, will move up and down with the prime lending rate, fixed mortgage rates depend on bond market pricing. In simple terms, banks make the money they use to loan you a mortgage from the spread between what they lend and what they borrow. This spread is, in part, dictated by bond rates. So banks look at the yield, or interest rate of bonds to set fixed mortgage rates.

For example, if the five-year government of Canada bond is at 0.5%, the banks would take this rate and add percentage points to cover their costs. Since banks still need to be competitive, they’ll only add enough to cover costs and make some profit. In this example, let’s assume they add another 3.5% to that bond rate for a prime lending rate of 4%. In highly competitive markets, this prime lending rate can be discounted for ideal borrowers (good job, excellent credit scores, good debt-ratios, high down payments, etc.). So, you may end up with a five-year fixed rate mortgage at 3.25%.

Truth be told, bond market rates can move up and down far more frequently than the prime rate—and quite often on a daily basis. That’s because the bond market is tied to market fluctuations and investor sentiment. The phrase: “The bond markets have priced this in…” refers to how investors and the market set bond rates based on current and potential economic conditions, like whether or not the BoC will increase or decrease overnight rates or whether or not the U.S. Feds will increase their government bond rates.
6. Why are my mortgage rates going up, even if the BoC rate stays the same?

The BoC rate is 0.5%, so why am I paying 2.7% on my variable mortgage rate? Banks use the BoC rate as a base. To determine a prime lending rate for home buyers and borrowers, banks will then add percentage points to this base, to come up with their prime lending rate.

Typically banks charge their best borrowers—people with excellent credit and good, stable incomes—an interest rate around 2% higher than the BoC’s target rate. So, if the BoC maintains its overnight rate at 0.5%, you can expect mortgage rates close to 2.5%.

Yet, even with the BoC cutting or keeping the target rate the same, mortgage rates have slowly crept up. Even fixed rate mortgages rates have crept up in the last few months, despite the fact that government bond yields are at an all-time low (more on fixed rates in a bit). These hikes are due, in part, because of new government regulations, which were designed to reduce risk in the country’s housing industry by forcing banks to set aside more money in case the mortgage loans on their books go bad. The banks have been passing on these additional costs to home buyers and loan borrowers. So, rather than finding a variable mortgage rate of 2.5%, you’re more likely to find a rate of 2.7%.

Some lenders will offer prime minus rates. That translates to a 2.7% prime rate minus 0.2% for a sub-prime interest rate of 2.5%.

Keep in mind, though, that we are still in atypical times. Normally in such a turbulent economy, with oil hovering at $30 US a barrel and the loonie sitting tight at 75 cents US, mortgage borrowers should expect a drop in mortgage costs, especially fixed rates. But there’s just nowhere to go. Or is there?
7. What about negative interest rates?

The BoC attempts to cool or heat up the economy by manipulating interest rates. But when rates start moving towards zero—as they have in Canada—a central bank may consider using other tools to stimulate the economy (remember, you can’t have inflation without economic growth).

One option is known as quantitative easing. This is when the BoC buys financial assets from the market (which can include government securities or private assets) in an effort to increase money supply and lower interest rates. This extra cash in the market prompts big banks to increase the supply of credit—provide more loans at cheaper rates—to households and businesses.

Another option is credit easing. This is the targeted purchase of private sector debt assets by the BoC. The aim is to reduce risk premiums, improve liquidity, and increase trading activity so that more money will flow in the market and demand for goods and services will increase.

In recent months there’s been discussion about whether or not Canada could become one of only a handful of nations to adopt negative interest rates. This is a policy where banks would charge savers to deposit money. So, rather than get 2.5% from that high interest savings account, you would have to pay 0.5% to the bank for the privilege of keeping that money in a savings account.

The idea is that by charging savers to save, the BoC is making it expensive to hold cash and this forces businesses, consumers and banks to start spending. It punishes savers and rewards risk-taking by making borrowing cheap. Basically, implementing negative interest rates is an act of desperation.
8. So, what is fiscal policy?

Fiscal policy (budgetary policy) refers to the measures taken by the government to increase or decrease public spending and taxes. According to most analysts, the Bank of Canada still has a number of monetary and fiscal policies it can use before resorting to negative interest rates. The biggest boost may come from the new federal government’s first budget, set for release on March 22, 2016. At that time, the feds could unveil billions in new stimulus spending (ie: fiscal policy) that could help prop up our country’s sagging economy.
9. What to expect today and going forward in 2016?

Despite all this speculation around negative interest rates and new infrastructure spending, the Bank of Canada may not be done with interest-rate cuts, just yet. Almost half of the economic analysts predict additional BoC rate cuts at some point in 2016. The next decision is today, March 9, 2016.

Even though we now have a weakened dollar (which helps boost trade, which should help grow our economy), Canada is still struggling to gain momentum. As such, many economists predict that low oil prices will continue into the foreseeable future and this, combined with other non-resource sectors struggling in today’s economic climate, will mean slow growth for our economy. As a result, some analysts believe even more market stimulus will be required later this year from the BoC and this will require additional rate cuts.

If you’re buying a home?
If you’re in the market to buy a home then today is just another day. Even if the BoC raises or lowers rates today, both fixed and variable rates are already at such historically low levels that any impact on your savings or expenses will be minimal.

If you’re selling a home?
For home sellers today’s announcement is also good news. Because the BoC cannot alter the current target rate drastically, it means our nation’s housing market won’t receive any major economic shocks. This leaves an unhampered real estate market that will continue to grow and strengthen in the upcoming months. In most markets in Canada, the stable low rates coupled with low inventory means you win: it’s a seller’s market. This will translate into bidding wars and big gains for any home sellers (depending on your market).
10. So, rush out and invest in real estate, right?

Every prudent investor will tell you that if you borrow at a low rate and invest at a high rate, that’s sound financial management. But just because rates are low doesn’t mean you should invest in a real estate rental properties (or any other type of investment). Any decision to borrow and invest needs to be considered in relation to your overall financial strategy—and that strategy needs to consider the impact of rising rates. While we haven’t seen rates rise in more than half a decade, we all know that eventually rates will rise. That’s when a good bet can turn into a bad investment. This is one of the reasons why real estate investors lock-in rates. The interest on mortgages is a tax deduction, so locking-in gives investors both security of a low rate over time and the option to write-off that interest.

But homeowners don’t have that option (mortgage payments are not a deduction under current tax law). So, the best strategy for any home buyer is to focus on minimizing the interest paid on this debt but getting the lowest mortgage rate possible, but then creating and following a plan to tackle this debt.

 

Do BoC rates impact you? 10 questions answered

Bank of Canada Announcement Dec 2015

At 10:00 am EST, Wednesday December 2nd, the Bank of Canada maintained their overnight
rate which in essence means no change to the interest rate on variable rate mortgages.

So if you or anyone you know just got a little carried away and have some high interest credit card debt that you can’t seem to pay off in full each month, now is a great time to chat about options with rates so low. Maybe you are planning a renovation project soon or purchasing a second home or rental property – chat to me about your options so we can work on how much unnecessary interest we can save you.

The Bank of Canada has also indicated that as the inflation profile is in line with their target
range. Remember that they will start increasing rates when they feel it necessary – so don’t become complacent or increase your personal spending unnecessarily unless you know you can afford it. Even with this information, interest rates will likely not start to increase until well into 2016. 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 have increased just a little since the last announcement, and are around 2.64% to 2.89% 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’ll be in touch again for the first announcement of 2016 on January 20, 2016.

I wonder if I can ask a favour, going with my theme of “Let the sun set and the leaves fall
along with Canadian consumer debt with our help” if you hear a friend or family member
talk about going thru a financially tough time – maybe I can help with some budgeting, credit
counselling 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.

Thanks, Chantelle

Bank of Canada Announcement July 2015

Good morning,

As you know, variable rate mortgages, lines 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 which in most cases impacts your Prime Rate.

At 10:00 am EST, Wednesday July 15th, 2015 the Bank of Canada DROPPED their overnight rate by 0.25% – typically when this happens the banks will drop their prime rate – we will find out later today if this occurs and therefore dropping the interest for you as well! This is great news for you but it is unfortunately a reflection of the economic instability at this time.

So summer looks like it is finally in full swing; are you thinking of some renovations or consolidating some debts that don’t seem to be going away anytime soon! It is never too late, or early, to start planning for the future especially as rates are still at historical lows! Chat to me about your options … I’d be happy to make those plans into reality and save unnecessary interest along the way.

Even though there is still some uncertainty of the economic outlook, the bank did remind us that they will assess the net effect of these recent positive developments to determine when rates will rise. Even with this information, interest rates will likely not start to increase until well into 2016. 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 have remained the same since the last announcement, and are around 2.49% to 2.84% 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, unless you feel otherwise, I’d recommend that you remain with your current variable rate product 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 September 9, 2015 at which time I’ll be in touch again.

I wonder if I can ask a favour, you might know someone who is unfortunately having a tough time right now with maybe too much debt or recent loss of income. There are many options to help using debt consolidation or access to some funds to get thru the tough times using the equity in their home. I have found recently that my access to alternative funds has been able to help many who are in transition and just need enough money to get them thru a tough time like finding a new job and keep above water in the meantime. Don’t hesitate to ask them to reach out to me – I can provide a pro bono consultation to get them thru this.
~Chantelle