As you may have heard, this morning the Bank of Canada has increased the overnight rate by another 0.25%.
Please do not panic when you turn on the news and hear this. Here is what you need to know below…please forward this link to friends and family if they are worried
What is the increase?:
0.25%
Clients with a fixed rate:
This announcement does not affect you.
Clients with an Adjustable Rate Mortgage:
Your payment will change on your next statement (approx. $15.20/month for every 100k of mortgage. Example: We see a 0.25% rate increase on a 500k mortgage = $76/month monthly payment increase.
Typically they apply the increase at the start of the following month (so in this case you will not see a change until February or March). For most clients it is still not suggested that locking-in to a fixed rate is going to save you more money than just riding out your ARM/Variable, especially this late with all the increases we've had…. But if you want to chat through that you can always book a call.
Variable rate (static) mortgage:
Your payment is static (you will see no change to payment). There is a chance you will be hitting your Trigger Rate if you have not made a manual change to your payment since rates have increased. It is VERY important you reach out if this may apply to you.
Clients with a home equity line of credit:
You will see an increase in rate right away because a HELOC is a variable rate mortgage. If you are carrying a large HELOC balance let’s talk about if a refinance or restructure of it can save you money in interest. You can always book a call
If you are pre-approved to buy a home:
We will reach out to you to let you know if this change will affect your pre-approval numbers. If you are pre-approved with someone else & need to have new numbers at the new stress test please respond to this email with the questions or book a call
For everyone:
These rate increases are no fun let's be real (I too have all my mortgages with variable/adjustable rates and I still haven't locked in, nor will I be). With that being said everyone is unique and has different situations, so we are here if you want to chat through best & worst case scenarios.
If you are nervous, want to discuss your options or just to ask questions about what this means for you please respond to this email or book a call. You can book a call here: BOOK A CALL
We are always happy to chat through your options and do whatever it takes to help you as best as we can.
Your real estate team,
Goldbar, The Nathan Team