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 March 3 2021     Posted by Mary Poburan

Rates are changing…What do I do?


In the last 6 months we have been graced with rates never before seen in history. Interest rates for 5 year mortgage terms have ranged from 1.59-1.89%( until last week). If the range of rates wasn’t complicated enough to explain, we are now experiencing a rise in rates in response to the Canadian Bond Market, yes the bond market. Despite being in a pandemic, rates are influenced by many factors but largely by the increasing bond market yields. Rather than boring you with economics, the question now, is WHAT DO I DO? If you were fortunate enough to be working with a broker who processed a rate hold, then you have 120 days to find a new property. If not, don’t panic. Rates under 2% are still a GIFT. Rates under 3% are still a gift. This is not normal. Not much has been “normal” this past year and mortgage lending is no exception. If you have a mortgage coming up for maturity in 2021 you may be feeling anxiety from this increasing environment. That’s natural. You have a few choices:

1)      Find out what the penalty is to payout your mortgage early and get in touch with me. I can do a quick analysis to determine if locking in early or moving your mortgage could be worth the cost to do so.

2)      If you are within 6 months of renewal, your lender MAY offer you an early renewal option. This means they could offer you todays rates and forego the penalty however it means you take the new rate immediately. Before doing so, get in touch with me so I can assess if the options presented are fair. Please note the lenders are under no obligation to offer an early renewal but many do.

3)      If you are worried about further increases, I Can hold rates up to 120 days. This applies to purchases, refinances and transfers. Not all rates are available to be “held” and not all lenders offer rate holds but some protection is better than none.

Rates are complicated. There is no longer a “one size fits all solution” to what rate you will or can get. Your neighbour, brother or friend may all have received different rates based on different criteria. These are muddy water to navigate, thankfully I have on my rubber boots and am happy to help!

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