What does drop in interest rate mean if you are buying/selling a home?

By
Real Estate Sales Representative with Berkshire Hathaway HomeServices Toronto Realty

 

 

 

Yesterday, Bank of Canada lowered the overnight rate for the second time this year by .25% due to a weaker than expected economy in the first two quarters. What does that mean if you are shopping for a new home or planning to sell and buy a home?

 

The common questions is whether the drop in interest rate will fuel the already heated market and drive up consumer debt? This could mean that more people will be able to afford to buy, so margin borrowers can buy more house so-to-speak, or in a better position to enter the housing market.

 

Next, will be to see how all the chartered banks reacts with the news to adjust their current lending rate. TD was the first to jump on lowering their prime by 10bp at 2.75%. 

 

The Canadian economy is contracting blaming slower global growth and low oil prices, but BoC will not get into a debate of whether we should be using the "R" word.

 

 

 

Below is a few tips from mortgage professional Rosanna Younnan on Prime Rate Change and Money Saving Tips for Homeowners:

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The Bank of Canada (BoC) lowered the key lending rate by .25%.  This is the second drop in 2015.

 

We’ve heard from TDCanada Trust – announcing a decrease in their Prime rate to 2.75% (effective July 16th);  it’s likely most of the other banks and financial institutions will also follow suit.  Similar to January, the banks are not matching the BoC decrease. 

 

TIP:  if you have a variable rate mortgage:  request your lender to keep your payment at its current amount (instead of a decrease) – more of each payment will go towards principal & you’ll pay less interest to the lender.

 

I have the knowledge and experience to help buyers understand their mortgage options.  Showing them how to save money from day one and also helping them understand the fine print.  Unfortunately the fine print is often the most expensive part of the mortgage and my knowledge allows me to explain these details to the buyer.  Ultimately, arranging a mortgage with a best rate combined with the least expensive penalty calculations, most flexibility for prepayments, manageable cash flow and a flexible mortgage charge is my goal.

  

How can I help you?  It may be assisting you with a financing challenge, supporting & participating with you in a new buyer seminar or being available at your next open house.  Let me know!

 

Mortgages available for:

·         Self employed (without income verification)

·         New to Canada

·         Purchase Plus Improvements

·         Investment properties

·         Second homes

·         Cash Back mortgages

·         Previously bankruptcy

·         Refinances

·         Maturing mortgages

·         Commercial & mixed use properties

 

Hope you are enjoying July and the Pan Am Games,

Rosanna

 

 

 

 

Rosanna Younan 
Mortgage Agent 
License # M08004328 
Verico Premiere Mortgage Centre Inc. #10317

Independently Owned and Operated
www.mortgageweb.ca/rosannayounan

 

cell: 416 729-9210

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Contact me to find out more about Toronto Design-focused Real Estate Solutions for your needs.

 

Anne Lok, Real Estate Broker

Berkshire Hathaway HomeServices Toronto Realty Inc. Brokerage

287 Davenport Road Unit 1
Toronto ON M5R 1J9

direct: 416-799-9632

office: 416-504-6133 

 

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