23 Mar Mortgage Changes
To say we live in interesting times is an understatement! As volatile as the stock market has been, so has the mortgage market.
Over the course of the last two weeks we have seen the five year fixed rates as low as 2.29% and then bounce back up again (longer term rates are determined by bond yields which have been as volatile as the market). In terms of the variable rate, prime has dropped by an unprecedented 1% in a week, which means a rate of 2.95%. With discounts from prime as low as 1% a 5 year variable rate mortgage is certainly an attractive option.
If you currently have a variable rate mortgage you should see your payments drop and you can choose to use the additional cash flow or leave your payments where they were and pay your mortgage off faster.
If your mortgage is coming up for renewal it is a good time to check with your lender and other lenders as to the best option for you as rates differ from one lender to the next.
Lenders and the three mortgage default insurers are now releasing more information for Canadians who are facing financial difficulty as a result of the effects of the COVID-19 virus. The big six banks, including TD, Scotiabank, RBC, CIBC, National Bank of Canada and Royal Bank have all made commitments to work with personal and small business clients on an individual basis to provide up to six months of mortgage payment deferral along with other credit products. Customers will need to contact their financial institution to discuss their options. Some mortgage lenders are beginning to contact their clients to bring awareness to options that may be available such as Hold-a-Payment and Skip-a-Payment programs that would provide temporary relief to those who have this option as a part of their mortgage product. For insured mortgages, CMHC, Genworth, and Canada Guaranty have announced additional deferred payment flexibility for those who have been affected by the virus.