Making an Informed Decision: Rate Doesn’t Always Equal Product  

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The Bank of Canada recently raised interest rates by 0.25 to 1.5 – up from their last hike 6 months ago that saw the rate sit at 1.25. This is now the 4th time interest rates have gone up in the last 12 months.  The current rate is the highest this country has seen since December 2008.  And, if you’re to believe many of the pundits out there, this could just be the latest in a string of hikes that could see 3 additional rises between now and January 2020.

A Globe & Mail Article highlighted a recent quote from the Bank of Canada that stated, “higher rates will be warranted.” With various trade tensions and a slew of other factors, Canadians can full expect the rate of borrowing to be less favourable in the very near future.  What does this mean for regular Canadians like you and me? Well, in the days and weeks that followed, it was “all about the rates!”

One of the things I heard most while reading and watching news updates was about Canadians understanding the difference between their Variable-Rate Mortgage and a Fixed Rate and what that may mean to them. What struck me most was the fixation on just the rates.  Why aren’t more people made privy to the fact that different products mean different things to borrowers?

For example, did you know most of the major banks do not change your payments if the rate increases? Or, if you are on a variable-rate mortgage, your monthly payments do not always increase even if rates go up? Do you even know what that means for you and your family? What that could indicate is that, while your payment remains the same, less of the payment goes towards your principal than it did prior to the interest rate increase.  There are many other scenarios that people need to keep in mind, but that was just one that stuck out for me as I watched and listened to “experts” misconstrue the meaning of the news and its impact on regular Canadians.

One of the things I’m proudest of is my ability to be honest and direct with potential clients.  This is actually one of the reasons why I love blogging  and creating articles that are published in snapd Vaughan each month. Educating people on making an informed decision is what I do best.

Making informed decisions involves knowing what different mortgage products can do for you meeting your financial needs. Depending on whether you’re looking for your first mortgage, seeking to renew or even refinance, various products give you the freedom and flexibility to help you achieve short and long-term goals.  My “Boutique Service” gives me access to multiple lenders – which in turn, means multiple products.  Feel free to get in touch with ME anytime and I’ll be happy to get you on your way to a mortgage that’s right for you and your loved ones.