BOC Announcement - Realtors

Hi ,

Feel free to share/forward or copy this to your clients. The objective is to ensure you're up to date with what's happening in the rate market & know whether you should lock into a fixed rate. You'll be receiving this update after every Bank of Canada announcement, which dictates how the Prime Rate moves. As widely expected, the Bank of Canada INCREASED the overnight interest rate by 0.25% today.  What this means to you is that the Prime Rate (2.45%) on your variable rate mortgage or Home Equity Line of Credit (HELOC) has increased to 2.70% effective immediately.Link to Bank of Canada Full StatementSummary of Bank of Canada's Latest Rate Announcement

• New Prime Rate: 2.70%

• My Rate Forecast: 2-3 more rate hikes for 2022

• Next Rate Meeting: April 12, 2022

• Key Takeaways: "The war will add inflation across the world, and interest rates will need to rise further", "Economic slack has been absorbed." These remarks confirm that additional rate hikes are to be expected this year.

 How will this affect you?

• $13/month increase per $100,000 mortgage balance

• IF you have a TD or CIBC variable rate - your payment stays the same but your amortization increases.

 What can you do?

• Stay the course if you currently have a variable rate less than 1.75% (Prime -0.70%)

5-year term fixed rates currently range between 2.89%-3.39%.

What should you do?

• We recommend staying the course with a variable unless your current rate is above 1.75% due to the spread between variable and fixed.

• This can also depend on your situation, the variable rate still provides the flexibility of a low penalty and likely still an interest saving vs converting to a fixed rate today.

• If you would like to lock into a fixed rate, I only recommend this IF you don't have plans on taking out equity in your current home or selling your home for the next 5 years.

• If you CHOOSE to switch to a fixed rate, reply to this email to book a call where we will compare the cost and interest savings now vs. your current rate to ultimately help you save money. We have a spreadsheet that will show you the cost/benefit of staying variable vs. fixed over the next 5 years.

Rates are STILL historically low and it is STILL a very good time to re-finance or buy. As always, if you know of anyone else that could use this same type of ongoing advice and support, your recommendation will mean a lot as I would love to help them as well. If you have any questions or looking for guidance, feel free to reply to this email or reach out to me directly. Best regards, Varshan ThavarajahMortgage Broker & Partner | MBL # M1600275Banyan Mortgage Group | FSRA #10680647-404-8812[email protected]Top 1% of Mortgage Brokers in Canada