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Get on the Right Path for Long Term Mortgage Management and Savings
There are many types of mortgages in the market that serve different needs, and rates will differ accordingly. However, no matter your mortgage type, you will receive a highly discounted rate compared to the competition. This includes mortgages for new Canadians, self-employed, bad credit mortgages, and even second or private mortgages. Apply today for a free consultation.
Ontario Mortgage Rate Update
In an age of COVID mortgage rates in Ontario are set to remain low for years to come. But beyond the ultra-low, sub 2% rates that we are expecting over the next two years, perhaps more significantly, we are in a longer-term ‘era’ of low mortgage rates Ontario. This is because as more debt enters the economy, it becomes harder for the government to increase rates.
For example, if there was $1,000 of debt in the economy, then a 1% increase in rate would not make too much difference. However, if there is $100,000,000,000 (one hundred billion) of debt in an economy, then a 1% increase will have a major, major impact. Higher rates would reduce free cash flow in the economy more substantially, and stall GDP growth and inflation.
So beyond a short term housing market and economic boost that we are seeing in Ontario, as a result of the best mortgage rates of all time, we are setting up for a long term trend of lower rates.
How do we best play this low Rate trend?
- If you are buying, consider a fixed-rate mortgage if the rate is below 2%. This will set you up nicely for the long term.
- If you are more risk-averse, you may consider a variable rate mortgage that can be switched into a fixed-rate mortgage before fixed rates begin to increase. This requires more rate watching, and Altrua Financial can help out with this.
- If your mortgage is set to renew within 2 years , you may consider an early renewal if rates start to trick up before your renewal date. The goal would be to minimize your penalty so that the net savings of a new lower rate mortgage would be substantial.
- Typically, the closer you are to the end of a fixed-rate mortgage term, the lower your penalty will be. This especially applies to the last year of a fixed rate mortgage. Variable-rate mortgages can usually be switched out of any time subject to a 3 month interest penalty.
Get the Right Mortgage Rate Advice
Every situation is different, so it would be helpful to get some perspective on your rate. There is also no harm in shopping around for a few quotes. This will help to determine your best possible pre-approval rate, along with advice on mortgage fine print flexibility.
Principal Mortgage Broker (Lic. # M08006143), Certified Financial Planner (CFP), BA (Hons.)
Altrua Financial Inc. FSCO #13005
Schedule a Free Rate Quote Consultation With Brent
- Over 12 years of experience between a Major Bank and Mortgage Broker.
- Over 1000 mortgage transactions completed, consistently at the best rates.
- Highly specialized mortgage guidance and advice.
- Certified Financial Planning (CFP) designation which enables him to establish unique, ongoing relationships with clients that emphasize wealth creation through consistent mortgage interest and cost management.