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Mortgage Rate Changes

Posted by Dreyer Group Mortgages

At 9:00 am EST, Wednesday September 5th, 2012, the Bank of Canada again did what we expected them to do… they maintained their overnight rate.  What this means to you is that the prime rate on variable mortgages or line of credit will not change and remains at 3.00%.

The overall economic growth in Canada is expected to pick up through 2013 and there are tentative signs of slowing in household spending which the Bank is in favour of.  Based on this outlook, they have indicated they are unlikely to increase their rate in the foreseeable future although very much dependent on the continued trend.  A change is likely to occur in 2013, and it is expected to be gradual and controlled in line with economic recovery, both in Canada and globally.

Fixed rates haven’t changed much either since the last announcement, maintaining at around 3.19% to 3.30% for a five year fixed term. Dreyer Group does have access to a 5 year fixed at 2.99% - so while variable rates are very low, many clients are choosing to lock in at this historically low fixed rate. If having a fixed payment is important to you, call my office so we can calculate what your new payment would look like and also if it is suitable for you. Call our office now 604 536-3802 / 604 649-5991 or toll free 1-800-687-9020 The next announcement on any change to the prime rate is October 23, 2012.

Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision:

“The economic expansion in the United States continues at a gradual pace. Europe is in recession and its crisis, while contained, remains acute. In China and other major emerging economies, growth is decelerating somewhat more quickly than expected from previously-rapid rates, reflecting past policy tightening, weaker external demand, and the challenges of rebalancing towards domestic sources of growth. Notwithstanding the slower global momentum, prices for oil and other commodities produced by Canada have, on average, increased since July.  In Canada, while global headwinds continue to restrain economic activity, underlying momentum remains at a pace roughly in line with the economy’s production potential.”

Lines of Credit Limits Changing Soon

On a side note, there are some mortgage legislation changes coming into effect in the fall which impact secured lines of credit.  They will be limited to a maximum of 65% of the value of your property which is lower than the current maximum of 80%.  Therefore if you are thinking of taking out some equity in your home and a line of credit is something you are considering, call me now so we can chat before the changes come into place and your options may diminish.

For more information call our office today or Apply now in 30 Seconds.
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