Time to Lock In Your Mortgage If You Want Canada’s Best Mortgage Rates

Given the fact that Canada has raised its lending rate three times in the past year, now is a good time to look at your finances and consider locking in your mortgage. The Canadian economy is improving and one sign of this is the fact that the Bank of Canada has raised rates.

The Bank of Canada also recently cautioned Canadians about overuse of credit as the average Canadian household is carrying too much debt. This further signals that they want Canadians to reduce their debt because rates will likely continue to rise as long as the economy can sustain it.

If your household is carrying more than $20,000 in credit card debt, you may want to consider how you can use your home to improve your overall financial situation.

As the Canadian economy continues to improve, the Bank of Canada will continue to increase its lending rate. Refinancing your mortgage to consolidate debt can be a great option if you structure your new mortgage properly.

First, consider if it is time to lock into a fixed rate mortgage and commit to a longer mortgage term to avoid any fluctuation in your mortgage rate. Locking into a fixed rate mortgage could ensure that in the years to come you will have Canada’s best mortgage rate, even if the Bank of Canada’s lending rate continues to increase in the months and years to come. If you are trying to achieve short term financial goals and think you may be selling in the next 24 months then it may be a better choice to stay with a variable rate mortgage.

Second, when refinancing your home to pay debt, ensure that you reduce your mortgage amortization. For example, if you are currently 22 years into a 25 year mortgage amortization, do not refinance the mortgage back out over 25 years. You just wouldn’t believe how many people do this and the result is that you will start your interest all over again. If anything, in consideration to the new debt you are adding to your mortgage, consider reducing your mortgage amortization by one or two years.

If you want to lock in your mortgage and obtain Canada’s best mortgage rate consult your local mortgage broker and visit http://www.gtamortgagematters.com/