Canadians who renew their mortgages within the next six
months are more likely to receive a lower interest rate. This is also
beneficial for the economy.
“The Canadian Association of Accredited Mortgage
Professionals says in its annual state of the mortgage market that the average
existing rate in Canada for consumers with a mortgage due in first half of 2015
is 3.5%. Just 60,000 of the 140,000 people renewing in the next six months have
a rate lower than 3.5%.”
Also, renewing is more likely to be a positive event for both
borrowers and the economy for the next year.
“‘We have seen in aggregate that interest payments as a share
of disposable income have been trending downward. The reduced interest payments
also allow many to accelerate principal payments and/ or increase spending.
Regardless this is a net positive for the economy,” said Benjamin Tal, deputy
chief economist for the Canadian Imperial Bank of Commerce.”
With lower rates, Canadians are working harder to pay down
their mortgages. Some even chose to pay once every two weeks instead of once
every month. This can reduce the amortization period by three years.
Basically, now is a good time to buy a home and an increase
in home sales is a positive for the economy.
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