It’s no secret that the mortgage market is constantly fluctuating: rates go up and down, making it difficult to predict the best time to buy a home, get a renewal price, or refinance a mortgage.
This week we see many lenders cutting term mortgage rates as the bond market crashes.
The bond market has a direct impact on mortgage term rates in Canada, as well as a few other factors. When bond yields rise, it means investors demand a higher return on their investment, which in turn increases the cost of funds for lenders. As a result, lenders must raise mortgage rates to cover the increased cost of borrowing.
Similarly, when bond yields fall, the cost of money for lenders also falls, allowing them to offer lower mortgage rates to borrowers. In current market conditions, it is especially important to consider mortgage rate insurance when rates are as low as they are now.
The mortgage rate hold is essentially a guarantee from the lender that they won’t raise your mortgage rate no matter what happens to interest rates in the market. This means that even if interest rates go up, you can still get the mortgage at the same rate you were promised when you first applied.
For those looking to buy a home, having a mortgage rate during low interest rate times can be a very valuable tool. This can give you peace of mind knowing that you won’t be affected by market changes as prices rise.
As mentioned in a previous article, many banks contact mortgage customers well in advance of the renewal date to offer an early renewal. There’s no doubt you’ll encounter a lot more interest regardless, so it might be tempting to consider an early renewal offer. You are probably worried that the interest rates will be higher if you wait for the renewal date.
However, renewing your mortgage early can actually be a costly decision. Interest rates fluctuate constantly, and if you renew your mortgage early and rates drop, you could end up paying more for your long-term mortgage and immediately lose your current low rate because they won’t hold on. the new rate. Rate until your renewal date. As a mortgage broker, I can hold the new lower rate until your mortgage renewal date within a certain period of time.
If you’re buying a new home this spring or if your mortgage is up for renewal by July, you should take advantage of today’s lower mortgage rates with a rate hold guarantee and mortgage pre-approval. No one knows how long these lower rates will be available at any given time, the bond market will still stabilize at its long-term average and rates will begin to rise again. Now there is a window of opportunity.
As a Mortgage Broker I can hold rates for up to 120 days and if rates drop we can adjust them accordingly to ensure you get the lowest rate available for your situation.
Please contact us if you would like to discuss renewing your existing mortgage or if you are planning to buy a home this spring and need pre-approval.
You can also book chat time here on my calendar at www.calFriendly.com/april-dunn
This article was written by or on behalf of an external columnist and does not necessarily reflect the views of Castanet.
