The COVID-19 pandemic has had drastic effects on many sectors of the Canadian economy. Housing markets and housing sales have been severely impacted over the last few months, due to increased unemployment numbers and business closures. Despite the negative impacts brought on by the risks and uncertainties of the pandemic, there are some positives that can be felt by homeowners and homebuyers looking to obtain a mortgage or refinance at a favourable rate. The Bank of Canada (BoC) has dropped its key interest rate drastically in an attempt to cushion the economic impact of the COVID-19 pandemic. In recent news, the bank announced it will keep the key interest rate at 0.25% until the Canadian economy shows signs of recovery from the effects of the COVID-19 pandemic.
All Canadian lending institutions use the key interest rate offered by the Bank of Canada to set the minimum rate for their lending mortgage rates. Thus, many experts are predicting that the low mortgage rates currently being offered to Canadian homeowners and homebuyers will remain steady for the foreseeable future as the BoC leaves its key interest rate unchanged.
The Bank of Canada’s announcement was an optimistic one and not just because of confirmations that the key interest rate would remain low. It also confirmed the Canadian economy had successfully avoided the most grave economic scenario previously predicted in it’s April report. As a result, the BoC is expecting to see positive growth in the upcoming third quarter. Although there is still a great deal of uncertainty in what the path for recovery holds, it is comforting to hear the Bank of Canada’s positive outlook on the Canadian economic future.
As the Canadian economy starts on its path to recovery, many homeowners might be enticed to take advantage of the historically low mortgage rates currently being offered. Homeowners looking to renew their mortgage have the opportunity to lock in a great rate for the duration of their mortgage. Even if your mortgage renewal date is far off, there are still favourable options that might be available to homeowners.
Refinancing your mortgage could be very beneficial when trying to lower your existing mortgage rate, however there are penalties that could be encountered. Working with a mortgage broker can help you understand the potential mortgage prepayment penalties better and determine if refinancing would really be the best option for you. A mortgage refinance can also open up the door to other helpful opportunities, like consolidating your debt or accessing the equity you have in your home. If you would like to tap into your home equity or lower your monthly debt payments, refinancing while rates are low is a great idea!
If it is time for you to renew your mortgage, Clover Mortgage can help get you the best rate available to you and lock it in until your actual renewal date. If you are worried about the penalties you might face while refinancing early, one of our experienced mortgage brokers can help you better understand your options and rights.
Although refinancing can be intimidating, it can also be very beneficial when tapping into your home equity. At Clover Mortgage, we can help you consolidate your debt or access the equity in your home using a Home Equity Loan or a Home Equity Line Of Credit (HELOC).
Whatever your mortgage needs, Clover Mortgage is here to help. Our dedicated mortgage brokers will work tirelessly to get you the best rates currently available.