This is a great opportunity to pay off some principal and anyone who is sitting in a variable rate mortgage below 3% today should take advantage of that over the next year and not lock in. Consumers who are buying a home right now want to know if they should take a long-term or variable mortgage.
The cost of a variable rate mortgage is still expensive for the banks and as such, they are charging up to 1% premium on Prime and locking in is starting to look very attractive.
All indicators are that liquidity is returning to the markets which will help ease the pricing on the variable rate mortgages - so I'm still a big fan of taking a 12-month convertible mortgage today with the ability to convert it to a variable at no cost when the discounts return. Prime rate is not going to stay this low forever. Consumers want to know when to expect to see rates rise.
As soon as the Bank of Canada feels that we have weathered the storm and shifts their focus from stimulation back to inflation, be prepared for a 1 - 3% rise in rates. So anyone floating should be prepared to lock in at that point - and if having to worry about that concerns you - lock in at today's 4 year rate until the next US election and you might just time it right for another dip in rates when it comes time to renew.
If you need any creative financing, please contact Maria Mak and my team at Sutton Centre Realty at 604-839-6368 or visit my website at http://www.mariamak.com/, you will be smiling too!
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