Interest Rates Cut to 1.25%: Here’s What You Need to Know
According to Tim L. Walker, Faris Team Real Estate Brokerage’s In-House Mortgage Broker, “The last time we saw a rate cut of more than a quarter-point was during the financial crisis over a decade ago.” Keep reading to gain much-needed insight into the Bank of Canada’s significant interest rate drop.
The Bank of Canada announced today that it is lowering the overnight rate by 0.5%.
The US Fed, alongside several larger economies, dropped interest rates mostly due to the concerns surrounding the coronavirus impact on global economic growth. Typically, when the Bank of Canada lowers interest rates, it only directly affects variable/adjustable-rate mortgages. For those with a variable/adjustable-rate mortgage, their next payment should be at a rate of 0.5% lower than their current rate.
While fixed-rate mortgages tend to move in tandem with variable-rate mortgages, they don’t always do so – exemplified by the fact that fixed rates have been dropping for the past few months despite variable-rate mortgages holding steady.
Our In-House Mortgage Broker, Tim L. Walker anticipates that fixed-rate mortgages will continue to drop over the next few months. “It’s nice to see variable-rate mortgages dropping; it’s been over a year and a half.”
Walker adds: “For every single purchase closing over the next few months, make sure to check with your lender to see if you’re able to have your mortgage rates dropped to today’s best rates. If not, I would love to sit down with you to discuss moving your mortgage to a lender with superior rates and options. In the past 24 hours alone, we’ve seen fixed rates drop to as low as 2.34%.”
Not all mortgages are created equal, so the best way to figure out which mortgage is best for you is to partner with a mortgage broker who can help you choose the right mortgage from the right lender that’s a fit for your specific needs.
Contact our in-house Mortgage Broker, Tim L. Walker at:
TIM L. WALKER | Mortgage Broker | M11000308
Anthem Mortgage Group | Brokerage #10294