The Bank of Canada Changed Their Rate!
On March 2nd , the BOC increased the overnight rate from .25% to .50% which is only a .25% change
Should I lock in now?
Variable rates have lower penalties, fewer restrictions, and typically cost LESS over the long term (if you're wondering, all 3 partners at Thrive are variable and staying this way for the entire term).
How do I lock in if I want to?
Contact your bank, get a quote in writing, if you'd like a 2nd opinion send it to us for review and we will reply.
Why should I NOT lock in?
Fixed rates are already 3%-3.5% with most lenders. You're likely paying more with a fixed rate vs. if your current variable were to go up 4-5 more times. Additionally, you will have to pay 4.5-5.5% of the balance if you break that fixed-term early.
Think about this before locking in.
- Let's use an example of a $500,000 Mortgage. If you were to go from a variable to fixed today @ a 1.5% increase, it would change your payment by $390.
- If you stay variable it may take months or even years for rates to increase this much.
- You would save more by staying variable with this increase and manually adjusting your payments.
Should I renew early if my mortgage is up in the next 1-2 years?
Variable rates are at record discounts and interest rates (as predicted will go up likely over the year). It's not a bad time to get re-evaluated and tap into that equity.
RECOMMENDATIONS:
We still are RECOMMENDING if you have a variable rate to consider staying the course. Remember WHY you took your variable. You may already have WON with rates having been so low for 1.5 years.
The SPREAD between the current variable rates and fixed are nearly 1%-1.25% or greater, so even if the bank were to raise rates 5 times you are protected.
If you have a variable rate at 2.05% or higher you should be talking to us RIGHT now about REDUCING your rate.
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