Your Bank of Canada Announcement
Your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from us on the recent Bank of Canada announcement.
Bank of Canada Maintained Overnight Rate!
As of 10AM on April 21st, 2021, the Bank of Canada has maintained their Overnight Rate. With not much room to decrease any further, it is not surprising to see them hold steadfast in the rate. The good news is that you are still benefiting from the previous rate drops and continuing to save unnecessary interest!
We have seen significant government stimulus provided as a response to the COVID-19 pandemic, however, it is yet to be determined what the outlook on housing and the economy might be. Our prediction is that interest rates are going to remain low for quite some time as the government continues to find ways to stimulate the economy as the vaccine rolls out.
With this in mind interest rates are extremely low although the “spread” between fixed and variable has increased making variables very favourable right now at under 1.5% versus around the 1.79% to 2.29% for fixed terms. Let’s save some unnecessary interest NOW – especially if you are thinking about buying a big ticket item (rental, cottage, vehicle, renovations etc.) or renegotiating or restructuring your existing financing needs at these lower rates, reach out and let’s chat.
As we’re sure many of you have noticed, the real estate market is absolutely crazy right now. There are bidding wars left and right, with some homes selling for over $1 million over asking in certain areas of the GTA.
If you need a bidding war/ multiple offer scenario refresher, it means that a seller has to review multiple offers to purchase by several buyers at the same time. When markets are considered a “seller’s market” (like they are right now), buyers are vying and competing to have their offer accepted over others thus causing a Bidding War.
When there are multiple offer scenarios, many buyers are tempted to either:
a) Go in “firm” with an Offer with no conditions at all in the hope that you win, and/or
b) Go in at a much higher purchase price than may be necessary – often over list price.
This is what we like to call an “emotional price premium” on the property. You may be tempted to pay whatever it takes to get the home, including paying that increased price.
So, how do you or someone you know avoid paying the emotional price premium during times like these?
For one, working with a qualified mortgage professional to secure financing and pre-approval is the first step. A Windrose Group mortgage professional will also ensure the leg work is done ahead of time, make use of the several mortgage calculators at their disposal and help you stay strong and stick to your plan. As always, don’t hesitate to reach out to us to discuss this further!
When it comes to multiple offers and bidding wars, Claire Drage has written an informative, 5 page article to help you get through it and avoid paying the emotional price premium!
Feel free to download this article for free and/ or share with anyone you think would benefit from it.
The Windrose Group team would like to offer you this free eBook that walks you through the 10 Steps to Getting into the Home of Your Dreams!
As always, don’t hesitate to reach out to us to chat about your next steps!
Upcoming Events
Investor Series: When Do You Hire an Investing Coach?
Join us on Thursday, April 29th @ 7pm for a LIVE panel discussion with The Windrose Group team, where they will be discussing when the right time is to hire an investing coach.
There will be several real estate investing coaches on the panel to answer frequently asked questions from the team and from the audience!
PRIVATE LENDING OPEN SESSIONS
via webinar
Our Private Lending Open Sessions offer an anonymous Q&A session on what it means to be a private lender – investing in mortgages through your RRSP, LIRA, TFSA or cash. Allowing you to gain knowledge AND confidence in your financial future! Register below for one of our upcoming sessions. Be sure to share with any friends or family members you think might like to join as well!
During times of market uncertainty such as The Great Depression & Financial Crisis of 2007/8, people often search for alternate strategies to grow their wealth. Historically speaking, Real Estate responds to recessions with much less volatility than other investment vehicles. Maybe now is a great time to consider jumping into real estate as an investment opportunity.
For example, our private lenders are using their cash, secured lines of credit, RRSP, LIRA or TFSA’s to loan out in mortgages. These investments are secured against solid real estate in great markets earning 10%+ annual returns. A passive way to invest in real estate without being the landlord. We want to take a moment to reinforce to our private lenders that your investment with us is secured in real estate. Our strength in underwriting and approving solid borrowers with our extensive due diligence process is proving to be a huge benefit. We fund thousands of private mortgages and we have only had one request for mortgage deferral. That is a testament to the quality of our borrowers and their financial acumen.
If you feel that investing in private mortgages might be a good fit for you, and you want to be added to our list to receive up to date opportunities please reach out now!
Don’t forget we have an amazing resource booklet for you to peruse that helps guide you through this uncertain time financially
Don’t forget the next announcement will be on June 9th, 2021. As always we will be in touch around 10AM to inform you of any changes the Bank of Canada makes.
Credits to : The Windrose Group – A Mortgage Alliance Team