The Bank of Canada, as most likely know, has cut their lending rate to 0.75 per cent, after it had been at 1.0 per cent since the fall of 2010. A statement released by the bank cites falling oil prices in Canada as a reason for this move noting that there is a large economic threat in the reduced, and still reducing, price of oil. This rate will mean lower interest rates for variable rate mortgages, lines of credit and other loans. However, while this would be a good time to have a mortgage be sure you are cognizant of what your mortgage payments would be should the rates go up, which they are likely to do. You can read the full press release HERE.
Also, for those that are in the process of upsizing from say a first to a second home, be sure your lawyer provides you with a discharge statement. One of our mortgage brokers, Nancy MacCallum with Dominion Lending Centres, has advised us to:
“Ask your clients to call their lawyer’s office today and insist that the discharge statement associated with repaying their existing mortgage be requested immediately. Mortgage discharge statements prepared prior to the impending rate decrease will reflect a lower penalty than they will subsequent to the decrease. Moreover, once the statement is prepared and delivered to the solicitor, the penalty can’t be recalculated based on a rate drop unless another statement is requested again after rates drop.”
If you have any questions or concerns please feel free to give Carole a call at 613-592-6400.