IMPORTANT RATE UPDATE
Recently, we’ve received an abundance of calls from our existing and prospective clients regarding some recent news in the mortgage market.
One of the large lenders has recently offered a 2 week 5 yr fixed promotional rate at 2.99%. HOWEVER, we caution you that you must read the fine print before entering into any mortgage contract; specifically, there are strings attached with this offering. A) You cannot refinance or switch to another institution during the term if a better opportunity becomes available (most people don’t honor out their term) B) your payment will be higher as the max amortization is 25 yrs and not all will qualify C) pre-payment flexibility is lower than a non-restricted rate and limited to 10% lump sum and 10% increase D) there are property restrictions. Bascially, the sticker price is enticing, but there are important restrictions that you must be aware of and understand the repercussions.
We don’t typically send out an iterim update, but we feel it’s important to educate clients on rates and also update them on specials. In response to the aforementioned deal, certain banks have contacted us regarding other specials. IF YOU HAVE A DEAL CLOSING IN THE NEXT 60-90 DAYS, please get in touch with us ASAP to see if you’re eligible for our following reccomendations on the best rate options currently avaiable. We like the 4 YR FIXED @ 2.99% which has no restrictions and ties in nicely with the US election schedule (this has an important impact on CDN rates). We also like the 3 YR FIXED @ 2.89% which currently offers a shorter timeline. This is important because, as you know, variable discounts have dissapeared over the last 5 months and the variable rate has become less attractive; however, it will return at some point, therefore the shorter timeline could play out nicely at renewal at which point the variable could be re-considered. Remember, there are no restrictions on these rates when compared to a standard mortgage offering.
***It’s also imperative that we note that not all applicants will qualify for these deals in terms of debt servicing. Long story short, you can qualify for more money on a 5yr fixed rate. Please call us for more info and to assess what is best for you. These deals are good for 60-90 days.
Best,
Gord, Steve and Jeff
