The Bank of Canada announced on Wednesday that they will not be increasing the overnight rate this month. At 1.75% the overnight rate, which directly affects mortgage interest rates, has not changed since October last year. It is not expected that the overnight rate will go up until later this year (or even early next year) but rates will eventually go on the rise. For this reason, now is a good time to refinance your mortgage.
Refinancing can save you money
If rates today are lower than the rate you have right now, refinancing can save you money. If your mortgage is up for renewal, you’ll be able to set up your next term at a lower interest rate without having to pay any extra fees. If your mortgage isn’t up for renewal yet, you may want to consider refinancing anyway. This means you close the mortgage you have and open a new one, often with a new lender. The downside of refinancing is that there are fees and charges for closing your mortgage early. However, the new lender may offer to pay these fees for you or may allow you to roll the charges into your new mortgage. This allows you to avoid up-front costs. Refinancing before the end of your term is worth the penalties if it means you’ll save money in the long run. Talk to one of our experts today to find out what options are available to you!
How and why it’s done
If you want to refinance, your best bet is to talk to a mortgage broker. Brokers have up to date details on many lenders and all they have to offer, including exclusive rates. Currently, Your Trusted Fort McMurray Mortgage Broker can offer a fixed mortgage rate of 2.99% and a fractionally lower rate on variable mortgages.
The number one reason home owners choose to refinance is to save money by lowering their interest rate. This saves them money on a month-to-month basis as well as in the long run. Home owners may also choose to refinance in order to access some of the equity in the home. This is usually done with a home equity line of credit (HELOC.) Accessing this equity can give you the opportunity to do some renovations, make some investments, or consolidate higher-interest debt into your lower-interest mortgage. The beauty of a HELOC is that it the minimum payments are interest-only. Obviously this kind of payment plan doesn’t chisel away at your debt, but it can be a huge help if you should hit a financial snag.
With interest rates looking to go on the rise in the next 12 months, now is a good time to consider refinancing. For answers to questions on refinancing, mortgage rates, HELOCs or whatever you may need help with, contact us today!