What’s going on? What does this mean? How can this help you?
Big News! On Monday, The Bank of Canada is set to reduce its qualifying rate ten basis points, from 5.04% to 4.94%. This is following the continuing trend that we are seeing on the five year fixed mortgage rates across the country. The five-year fixed mortgage rate is moving even closer to it’s lowest level not seen since 2016, when it was reduced to 4.64 percent.
If you are getting ready to get into the housing market or already shopping for a new home this new qualifying rate is a change that helps you.
Will the rates continue to fall? Probably. At this stage, it’s hard to know for sure but across the board, we are seeing fixed rates decline.
The qualifying rate change is not a huge difference but it is enough if you are right on the margin; you can now qualify for a little bit more. A few thousand dollars is potentially the difference in one place and another and it’s worth it to look into it.
As the economy transitions to post-COVID, the downpayment that you are saving up for, now, stretches a little further, those extra closing costs are a now little easier.
Every bit helps, according to Doug Porter, BMO’s chief economist, and I agree with him. “I believe the much bigger issue for the housing market will be the broader economic outlook and the extent to which activity and jobs can recover as the re-opening progresses. Rates still matter, but much less so than in the recent past.”
To me, rates definitely matter but the overall mortgage package matters more. If the rate is one number or a slightly different number it does matter; but if you don’t expertly manage your mortgage, you can still fall into the numerous traps, penalties, and problems that are set for you, and that matters more.
Never fear, fortunately, that is where your mortgage broker comes in, as experts in the industry, we are happy to share our knowledge and help you every step of the way.
Give me a call anytime 604-202-9913, I am always happy to help