CBC Reports: Mortgage Rates Hit a New Low, with Canadian Bank Posting Below 1%

The Gist:

• Banks have been posting extremely low mortgage rates throughout 2020, with the latest from HSBC having rates as low as under 1%.

  • Dominion Lending Centres will have exclusive access to HSBC over the next year, so if you want to take advantage of these incredible rates, contact Cheryl Wilkes to get you set up!

• Is it smart to switch your mortgage to get a lower rate?

  • The potential for savings can make it very appealing to be dealing with a lower mortgage rate, but keep in mind you will have to pay out the penalty for switching.

  • Some have saved anywhere between $10k-$30k over two years by switching to a lower rate, but for others it would not make financial sense to pay out of pocket for the penalty.

• A commonly-believed myth is that the best mortgage brokers have mysteriously great rates that others do not. The truth is that a good mortgage broker has excellent communication and feedback skills, as well as a great knowledge base of what they have to work with.

  • The banks will often make changes to programs, qualifications, stress tests, etc.. A great mortgage broker will stay up-to-date with these changes and know how you fit into it.

  • The biggest issue is not the policy itself, but how it is interpreted.

  • The job of a great mortgage broker is to work the program. If it were easy, all of this would be done through computers, but there are many moving pieces to the puzzle that have to be fit together.

• If your current household income wouldn’t be enough for the type of home you want, there are some options you could consider:

  • One commonly overlooked form of help is the Canada Child Benefit (CCB).

    • By applying for this benefit, you could get an additional few hundred dollars per month (depending on your total income), which could be the difference between a townhouse and a duplex.

  • Consider renting out a legal suite on your new property. By having two tenants paying the mortgage, there is less risk and more room for upsizing.

If you have any questions or want to talk through your situation with an expert, Cheryl Wilkes should be the first on your list of calls!

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