We’re finally getting some great news on the inflation – and, consequently, the interest rate – front! Canada’s inflation rate continued its downward trajectory in July, with the headline Consumer Price Index (CPI) slowing to 2.5%, according to Statistics Canada.
This is definitely positive news for those with variable-rate mortgages and lines of credit as it points to the likelihood of a further rate drop from the Bank of Canada (BoC) on September 4th.
Additionally, the big banks have also slashed their interest rate forecasts following extreme volatility experienced in global financial markets. TD, CIBC and BMO have led the way with their revised forecasts, with expectations that the BoC will cut interest rates faster and deeper over the next 16 months.
More ways to save on your mortgage
Aside from waiting for interest rates to fall, there are several things you can do to save on your mortgage payments, including taking advantage of accelerated payments, using bonus money as a lump sum payment and consolidating debt.
The frequency of your payments has a significant impact on how fast you reduce the loan and the amount of interest you pay. When you increase, or accelerate, the payment frequency, the loan principal decreases faster and you, therefore, pay less interest over time. A popular choice is accelerated bi-weekly payments, which amounts to roughly one extra payment per year, but the acceleration could end up saving you thousands in interest over your life as a mortgage holder.
Accessing home equity is a popular and cost-effective way to consolidate payments and efficiently eliminate debt as well as the stress and burden that comes along with debt. There are a number of solutions available, so it’s important to discuss all options with your mortgage agent and find the one that makes the most sense for you.
Have questions about interest rates or your mortgage in general? Answers are a call or email away!
