Low rates over the next 12 months mean now is the perfect time to buy a house or renew your mortgage!
The major banks have announced lower interest rates based on the decision by the Bank of Canada to keep interest rates at historic lows.
Today, a homeowner with a variable prime minus 0.1% on a $300,000 mortgage would have a monthly payment of $1,292 assuming a five year term and a 25 year amortization.
That is $368 less than 10 months ago. Three-year term mortgages are even more competitive. Fixed rates have dropped as well.
The average fixed rate in January 2009 was at 4.99% and now at around 4.09%. That means $130 more in your pocket every month on a $300,000 mortgage.
Something else that is a great option, the 50/50 plan where half of the mortgage is locked in at a five-year fixed rate & the remainder is tied up in a five-year variable rate. The holder of this plan can switch to the fixed-rate plan at any time during the five years if variable rates rise upward.
Now is a great time to rethink your time frame to buy, to do that addition, to downsize or just plain reduce your monthly payments.