Is your best bet Variable Mortgage? Why? Ask the Pros!
We wanted to update you on what this means for your mortgage. BOC was busy to lower rates, but where is the bottom?
If you have an adjustable-rate mortgage, you’ll see a slight decrease in your monthly payments, giving you a bit more cash flow each month. For instance, with a mortgage balance of $750,000 at the previous 6.20% interest rate, your estimated monthly payment was around $4,924. With the new rate of 5.95%, your payment would drop to approximately $4,809—an estimated decrease of $115 per month ($15 for every $100K of balance). While this might seem small, over time it adds up to thousands of dollars in savings.
More Benefits? Yes! Let us explain!
For those with static-payment variable-rate mortgages, the rate cuts are also beneficial. Though your monthly payment won’t change, more of it will go toward paying down your principal, with less going toward interest.
Fixed-rate mortgage holders won’t see immediate changes, but in this declining rate environment, renewing or refinancing could become easier, giving you more borrowing power when the time comes. Lower rates could make your money go further.
This is also great news for first-time homebuyers! WHY?
Lower interest rates can improve your borrowing power and reduce payments. Recent changes in government regulations have also eased some of the barriers that first-time buyers previously faced.
Looking ahead, the Bank of Canada has two more rate announcements scheduled for October and December, and experts expect further quarter-point cuts, potentially bringing the overnight rate down to 4.0% by year-end and possibly 2.75% next year.
Whether you’re a homeowner, planning to renew or refinance, or considering buying, these changes are exciting for Canadians! Let MIP to be trusted Mortgage Brokerage to help you with knowledge and save on you monthly mortgage obligation, God knows we all need a break.
Always remember that, the interest rate is just one factor to consider.
Other factors like your mortgage type, down payment, payment schedule, amortization, and potential prepayment penalties all play a role in your overall affordability. If you’d like personalized advice on how these changes affect you please call us at 403-253-2022 or feel free to reach out by email: [email protected]