Don’t Panic

Colleen Thomas post

Colleen Thomas, of Compass Mortgage Group:

"When the pandemic first started the Bank of Canada Prime rate had remained unchanged at 3.95% since October 2018. Then March 2020 and COVID happened and in that one month the Bank of Canada reduced the Prime Rate by 1.5% over the course of the month where it then sat unchanged for 2 years.

Even with this change, it is not necessarily the time to lock into fixed rates or panic!  If you're looking at the variable vs fixed interest rates there is still about a 1.5% difference. Rates are still very low on the variable side with many of you getting large discounts originally compared to the fixed rates. Fixed rates have climbed over the last month to above 4.09% with most lenders.

If you are in a variable rate mortgage please note the following.

If you are a TD mortgage client, then your mortgage payment will stay the same, but the interest/principal portions will adjust accordingly. You can offset this by increasing your payment if you wish.

If you have a variable rate mortgage with another lender or bank, ie First National, Scotiabank, Lendwise/Merix, MCAP, or RFA for example, then your mortgage payment will change based on the new prime rate of 3.2%.

As a general guideline, for every 0.25% rate increase your mortgage payment increases by about $12/month for every $100,000."

If you have any specific questions about your mortgage don't hesitate to reach out to Colleen and book a call.

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