Mortgage Rates - Lock In & Save

A couple of weeks ago the Harper government reintroduced the budget.  The week before, we witnessed an historic event with the inaguration of President Obama.  Not only was it important to the United States, but this also affected many places around the world.  Since the economic crisis is not solely in the U.S., the world is looking to Obama to provide new HOPE of stability, HOPE of future and HOPE of a better year ahead.

However lost in the hype of festivities was another significant event.  The Bank of Canada Rate decreased to an historic low of 1%.  Since the Prime Lending Rate is tied to the Bank of Canada Rate and the mortgage rates are tied to the Prime Rate, both rates dropped.

By lowering the Bank of Canada Rate, it is clear the government is supporting the purchase of high ticket items as a means to boost consumer confidence and ignite our economy.  With the Bank of Canada Rate at 1%, this leaves very little room for more cuts.  They can only drop one more percent.

Historically, the Prime Lending Rate has been 2% higher than the Bank of Canada Rate.  However, during this economic crisis the government has been aggressive in cutting rates to help the economy and consumers, some of the major lenders used this to boost profits by increasing the spread from 2% to 2.5%.  Even though the banks have found away to increase profits, this is still an historic time in our lives.  MONEY is on SALE!!!!!!!  I don't know how long this will last, but you should take advantage of the low rates.

Combine the low rates with the new government renovation tax credits and energy grants and it makes fro the perfect time to renew your mortgage or finish those renovations or consolidate your debts.

Ask yourself this question. How much can I save by taking advantage of these lower rates?  The 5 year rate is currently lower than 4.5% or lower.  Even if you have 2 to 3 years left on your current mortgage term, it might make sense to pay the penalty and lock it in at the lower interest rate.  If you are able to lower your rate 0.75%, that is a saving of $750 per $100,000 per year.  Plus, the rates most likely will be heading upwards in the next 6 to 18 months from now.  Meaning that when it is time for your renewal, you will be locking in at a much higher rate.

Obama is spending money, Harper is spending money.  It seems like everyone will be spending money, so let's see if we can save you some.  You should be receiving your mortgage statement in the mail soon.  Before you file it away, let's examine the numbers and see if it is worth paying the penalty and how much money you will actually save by lowering your rate.

For more information and a free estimate, please contact John Jackson @ or 905-309-6179.

For a list of homes to purchase in your area please contact Brad Stevenett 905-407-7381.


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Brad Stevenett

Brad Stevenett

Sales Representative
CENTURY 21 Miller Real Estate Ltd., Brokerage*
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