Open House- The Real Estate & Mortgage Show: July 14, 2018
On this episode, Steve, Frank and Paul discuss the Bank of Canada, new and current interest rate markets, what to do when selling your home and your mortgage is up for maturity and how Amazon will increase east end activity. Check out the podcast here:
The Bank of Canada interest rates increased last week to 1.5% though the bond markets did remain flat and in turn, fixed rates are most likely to remain at current levels. Prime is now 3.7% which means that with many lenders the 5 year variable rate mortgages are still under 3%. The spread between fixed and variable rate is about half a point to three-quarters of a point.
When it comes to looking to purchase or sell a condo, condo fees will have a significant impact on the attractiveness to potential owners. The group takes a call regarding bridge loans when purchasing a property before you close on the sale of your existing home. In some instances, a HELOC (Home Equity Line of Credit) may be a preferred option.
When locking in a variable rate mortgage, you will lock into the closest fixed term mortgage rates. Most often, when you select the variable rate mortgage product, even with rate increases, if you look to lock into a fixed, the fixed rates will generally be higher. Whenever the Bank of Canada increases the rates, the banks will most likely raise their prime interest rates before the end of the day on the same day.
If you are planning on selling your property and your mortgage is coming up for renewal, always renew at the end of your term into an open mortgage to reduce the costs of breaking the mortgage. Never assume that is when your bank will do for you and always ensure that you have contacted them ahead of time. If you have the option of converting it to a line of credit, it would save even more in terms of fees and interest rates when you pay it out.
The Ottawa area has seen increases in both the number of sales as well as sale prices. With the announcement of the Amazon warehouse in the east end, there will most likely be an uptick of activity in terms of sales. Rental units would also be a great investment opportunity in this end of the city.