Not even two years ago everyone expected interest rates to rise and to continue rising. The Bank of Canada implemented 6 consecutive rate hikes before coming to a standstill in October last year and announced on Wednesday that they will yet again keep rates as they are. However, it is expected that this trend won’t last much more than 6-10 month, at which point the Bank of Canada is expected to continue on pushing rates up and up.
Time to Refinance
If your mortgage term is coming to a close you’ll be happy to know that you’ll likely be able to get a rate that is lower than the one you had previously. If your term isn’t coming up on renewal any time soon it may be worth it to consider refinancing. This means closing the mortgage you have and opening a new one, often with a different lender. Doing this nearly always comes with fees and charges, but new lenders are often willing to pay them for you or to roll them into your new mortgage with them. You pay for it in the long run but it allows you to avoid paying it upfront.
How to make it happen
Refinancing gives you the chance to get a smaller mortgage payment, a lower interest rate, and to switch between variable and fixed rate mortgages. The easiest way to find out which lenders have the best options is to work with a mortgage broker. A broker has access to several lenders and can provide you with insider deals not know about by the general public.
Home owners often refinance for two additional reasons. The first is to consolidate debt. If you have high interest debt it is often worthwhile to roll it into your mortgage because it helps you to handle the monthly payment and to decrease how much interest you’ll pay. Another reason to refinance is to be able to access the equity in your home. This is most often done with a HELOC (home equity line of credit.) With access to this kind of cash numerous financial possibilities become available. Home renovations, business investments, long awaited vacations, continued education. The choice is yours and only the interest is due each month. But keep in mind, interest-only payments are not a good long-term solution.
If you are looking to refinance your home Your Trusted Mortgage Broker can offer you 2.99% on fixed rate mortgage and a slightly lower rate on variable mortgages. With interest hikes looming on the horizon, now is a good time to lock in at the lowest rate you can find. To get started, contact us today.