The Bank Of Canada made no surprise this morning when they announced there will be no movement to it's benchmark rate.  They made it clear there is no intention to increase the benchmark rate until inflation maintains consistency at 2%.  

So what does this mean for your clients?  This is an indication that low rates are here for the foreseeable future.  Buyers, investors and current owners will continue to have access to historically low rates and should take advantage accordingly.  

Here's something to consider; The Mortgage Qualifying Rate (MQR) has dropped 0.25% since May, but mortgage interest rates have dropped over 1.00%.  Why is this important?  Your clients are only qualifying for 2.5% more mortgage, but are paying 35% less in interest costs.  

Overall, this means the stress test is forcing people to save more on a monthly basis than they would have 6 months ago.  Where are these excess funds going?  Paying down debt?  Extra mortgage payments? Saving for retirement?  Saving for an investment property?  

Understanding of nuance like this helps to budget more proficiently and helps your clients stay ahead of the game.  If you have any questions with today's announcement, feel free to call any time. 

Source:  
Mike Shanks
(403) 613-3635

Kardia Mortghage Inc.

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