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All Toronto Mortgages
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Frequently Asked Questions
What's best? A fixed or variable rate mortgage? A study done by Dr. Milevsky, a York University professor who analyzed rates from 1950 to 2007 figured a variable or adjustable rate mortgage would save a home buyer compared to a fixed rate 60% of the time. Though discounts below prime on adjustable/variable rate mortgages have shrunk since European debt crises erupted so decision today is not so black and white. Fixed rate offers one stability while adjustable/variable offers chance to save. Decision comes down to peace of mind and whether you can stomach possible increases in prime rate.
What are the best ways to pay my mortgage off quicker? Rate is not the only way to save on the interest you pay. You can also save by being aware and taking advantage of your mortgage "privileges". For example, accelerated weekly or bi-weekly payments versus monthly payments; lump sum payments towards the principal or increasing your regular schedule payment. Also consider, how your interest is compounded and what are your future rate guarantees.
What affects my variable rate mortgage, and how often may it change?
This type of mortgage is only affected by the Bank of Canada. The Banks meets eight times a year and historically change the rate by 0.25% two to three times a year. Though due to troubles caused by U.S. housing and the credit meltdown of 2008, the prime rate has dropped to historic lows and stayed more or less pat for over 36 months now. It has been suggested that our prime rate will not shift until the U.S. Federal Bank raises their rates. Though they have suggested they will be keeping rates low well into 2015.
Why would the Brank Of Canada change interest rates? When the economy is doing well and inflation may be a concern, the Bank of Canada typically adjusts the rate by 0.25% in order to keep inflation in check. Conversely, when the economy is flat or declining, the Bank of Canada may reduce the rate by 0.25% in order to stimulate the economy. Since the recession of 2008 the Bank of Canada has kept the prime rate low with the hopes that this stimulus would lower the unemployment rate and jumpstart the economic recovery.
How much would a 0.25% change in the prime rate affect me? On $100,000, a quarter point rise in the prime rate with a 25 year amortized mortgage would change your monthly payments by $13.
How do bond prices affect my mortgage rate? Bonds ONLY have an effect on fixed mortgage rates. When the Bond market rises so do the fixed mortgage rates.
What's best? A fixed or variable rate mortgage? A study done by Dr. Milevsky, a York University professor who analyzed rates from 1950 to 2007 figured a variable or adjustable rate mortgage would save a home buyer compared to a fixed rate 60% of the time. Though discounts below prime on adjustable/variable rate mortgages have shrunk since European debt crises erupted so decision today is not so black and white. Fixed rate offers one stability while adjustable/variable offers chance to save. Decision comes down to peace of mind and whether you can stomach possible increases in prime rate.
What are the best ways to pay my mortgage off quicker? Rate is not the only way to save on the interest you pay. You can also save by being aware and taking advantage of your mortgage "privileges". For example, accelerated weekly or bi-weekly payments versus monthly payments; lump sum payments towards the principal or increasing your regular schedule payment. Also consider, how your interest is compounded and what are your future rate guarantees.
What affects my variable rate mortgage, and how often may it change?
This type of mortgage is only affected by the Bank of Canada. The Banks meets eight times a year and historically change the rate by 0.25% two to three times a year. Though due to troubles caused by U.S. housing and the credit meltdown of 2008, the prime rate has dropped to historic lows and stayed more or less pat for over 36 months now. It has been suggested that our prime rate will not shift until the U.S. Federal Bank raises their rates. Though they have suggested they will be keeping rates low well into 2015.
Why would the Brank Of Canada change interest rates? When the economy is doing well and inflation may be a concern, the Bank of Canada typically adjusts the rate by 0.25% in order to keep inflation in check. Conversely, when the economy is flat or declining, the Bank of Canada may reduce the rate by 0.25% in order to stimulate the economy. Since the recession of 2008 the Bank of Canada has kept the prime rate low with the hopes that this stimulus would lower the unemployment rate and jumpstart the economic recovery.
How much would a 0.25% change in the prime rate affect me? On $100,000, a quarter point rise in the prime rate with a 25 year amortized mortgage would change your monthly payments by $13.
How do bond prices affect my mortgage rate? Bonds ONLY have an effect on fixed mortgage rates. When the Bond market rises so do the fixed mortgage rates.