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Raoul’s Mortgage Thoughts – June 2024


While the recent news of the Bank of Canada’s rate change -.25% may have caught your attention, it’s essential to understand its direct relevance to your financial situation. If you’re currently with a fixed-rate mortgage, this change may have a limited impact on you. The Bank of Canada’s overnight lending rate, which is the rate that has been reduced, only impacts variable-rate mortgages and products. However, on the bright side, even if you are in a fixed-rate mortgage and have any form of credit, such as a Home Equity Line of credit (HELOC) where the interest rate is based on the bank’s prime rate, you will see a reduction in interest charges for those products, potentially leading to significant savings.

Thankfully, over the last couple of weeks, we have seen the bond yield markets trend lower, driving the fixed-rate interest rates for mortgages slightly down.

Both factors are favourable for those of us who like lower interest rates. However, the interest rate that should be front and centre for Canadians in a fixed rate mortgage with one of Canada’s big banks is their mortgage posted interest rate. Many people do not realize the interest rate they received from their bank was discounted and not the posted rate offered when they obtained their mortgage.  This knowledge is crucial: if you’re considering breaking your mortgage or refinancing, the bank will base its breakage fee on the posted rate, which can significantly increase the amount someone has to pay to get out of the mortgage. Understanding how your bank bases its breakage fees can empower you to make informed decisions about your mortgage, potentially saving you thousands of dollars.

If you’d like a review of your current mortgage and advice on how to set yourself up for mortgage success in the future, feel free to book a one-on-one with me using the link below. In this session, we can discuss your specific mortgage terms, the impact of the rate change on your mortgage, and potential strategies to optimize your mortgage.

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Raoul Hunt

Mortgage Broker

DLC The Mortgage Source – Independently Owned & Operated – Licence # 10145

Ottawa: +1-613-218-8798

GTA: +1-647-297-8798