Mortgage Rates Today
Good News! The mortgage qualifying rate in Ontario has been lowered to 4.94%! This rate is used in stress tests for both insured and uninsured mortgages, and a lower rate means it is easier for borrowers to qualify. For the first time since January 2018, when stress testing began, the mortgage qualifying rate is under 5%. Call us today or fill in the form below to find out how much you qualify for!
What Is The Stress Test? This is a mortgage qualifying tool that essentially weighs your ability to handle a higher mortgage rate if an unfortunate financial situation occurred. For example, if mortgage rates spike and the individual was only approved based on a low rate, they may not be able to handle the sudden increase, thus not being able to make their mortgage payments. The stress test prevents this crisis from happening!
Six Common Questions
Should I break my fixed mortgage to get a lower rate?
If you are only partway through your fixed term, you will need to pay a penalty to break your mortgage. Locking in a low rate now can be a strategy to provide some reassurance in an uncertain future, With this, you may be able to save a considerable amount of money over the long term and not be out of pocket in order to complete the transaction. If this is a question that’s on your mind, we can provide you with a detailed cost/benefit analysis.
Can I re-finance my mortgage to deal high credit card balances?
If you have more than 20% equity in your home, you may have the option of refinancing your mortgage and roll all your debts into a new, low-interest mortgage. You can get immediate cash-flow relief and one manageable monthly payment. Your lender will need to re-qualify you, however, so if you’re dealing with reduced income, that could impact your ability to qualify. We can complete an analysis to see if you can benefit or discuss other options with you!
What about my mortgage renewal?
A lost job or drop in income will be a factor if you want to move to a new lender for a lower rate. You can renew with your current lender at their best offer, or use an open mortgage for a few months, with a strategy of moving to a lower-rate closed mortgage without penalty as soon as your finances stabilize.
Should I lock in my variable-rate mortgage?
If you have a deeply discounted variable rate mortgage, you are in a very good position, given the recent drops in prime rate. Variable mortgages can be converted to fixed without penalty, providing long term peace of mind knowing you have security for the next five years. While the rate environment remains in flux, it might be best to enjoy your lower rate for now and re-evaluate in 6 to 12 months.
Should I take the mortgage payment deferral that is available?
The immediate relief is compelling, however, your lender will add the interest accrued during the skipped period to your outstanding balance, increasing your mortgage amount. Alternatively, you may be able to borrow from a Line of Credit, making interest-only payments until the financial stress begins to ease. Other options include extending your amortization or moving from accelerated to monthly payments.
Fixed or variable mortgage rate?
The answer again depends on you – your tolerance for risk, where rates are expected to go, and personal preference. With the rate environment changing all the time, what may be the right decision for you this week, could be different next month. Let’s have a conversation so I can get a clear picture of your plans and current situation.
Have a question? Get in touch at anytime. Be safe. Be well. Be happy.
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