Concern surrounding coronavirus – COVID-19 – has led to a crash in oil prices and economic uncertainty surrounding capital markets, which has resulted in most Canadian banks significantly reducing both fixed- and variable-rate mortgage rates.
Around the world and here at home, global markets have experienced the worst decline since the financial crisis of 2008. Global oil markets, which had been experiencing an upward trend, have suffered significant losses as demand wanes. Travel restrictions are affecting tourism and spending, business and consumer confidence are declining, and import constraints and disruptions to global supply chains have sent economies reeling.
The extent of the virus’ impact on the economy depends on a number of factors – most important, the length of time it takes to be contained. While this remains beyond the control of any politician, global leaders and central banks are banding together to help stimulate consumer confidence and, ultimately, curb the virus’ blow. In Canada, this means a cut to interest rates.
Over the last few years, the Bank of Canada has kept rates steady, but believed that a substantial cut was necessary March 4th in order to bolster assurance among the public and business, when it announced that it was slashing its key interest rate target by half a percentage point to 1.25%. Hours later, the banks began following suit.
A mortgage review could save you money
If the interest rate on you current mortgage is 3% or higher, and your mortgage term is either close to renewal or even a year or two away, you could save thousands by refinancing into a lower rate right now, even if there’s a penalty to break your existing mortgage.
Be sure to check with your mortgage agent about a free review. We’re always happy to help save you money on your mortgage!
Currently, the lowest available five-year rate is well below 2.5% (rate example for comparison sake only, as rates are always subject to change). A year ago, the banks were offering five-year fixed rates at 3.69%.
So, not only is now a great time to review your current mortgage to see if we can save you money, but it also makes sense to think about buying sooner rather than later to take advantage of these great rates.
Have questions about interest rates or your mortgage in general? Answers are a call or email away!