By now you have heard of the proposed trade agreement between the USA, Mexico and Canada, otherwise known as the USMCA. I’m not one to discuss politics but my role as a mortgage professional is to discuss how these agreements impact your mortgage.
We have been in a long period of historically low interest rates. Our government has kept rates low with economic uncertainty around NAFTA. With the proposed USMCA this gives them the green light to go ahead and raise rates which they are now expected to do at least once if not twice before the end of 2018.
In a variable rate mortgage?
If this is you and you are happy to ride out the coming months and see where rates are going to go then you don’t need to do anything. If the possibility of rates increasing is on your mind or it’s keeping you awake at night then reach out to discuss your options. You will have options to get out of the variable and into fixed, let’s find you the best one.
Large line of credit secured by a property?
Commonly known as a home equity line of credit or HELOC, the rate will increase with prime lending rate. Options to move the balances into fixed term rate will depend on the lender you are with and the structure of the overall borrowing facility.
In a fixed rate mortgage?
Fixed rates are determined in the bond market, not by changes in prime lending rate. That being said they both generally move in the same direction and with the USMCA news bond yields rallied which brought up the fixed rates already. If you are mid-term I recommend having a conversation about your mortgage and how it fits within your overall financial plan to best prepare for the renewal. If you are within one year to maturity then have this conversation now to rate protect yourself, your mortgage & your financial future.
Realtor or referral partner?
Talk to your clients about this now and offer them my contact information so that I may review their mortgage as a value add to your business.
You don’t have to understand politics, the proposed agreement or how rates are determined to know that you want to save money & have someone working for you to protect your financial future. Contact me today, I'd like to work with you!