It’s safe to say that we are living in unprecedented times. Science fiction, anybody? The implications of current events and speculation on where we’re
When it comes to buying home real estate in Toronto, we often shop around for the best mortgage rate we can get our hands on. But on May 13th, the lowest mortgage rate since 2010 may have just fell onto your lap.
Winnipeg based financial service, Investors Group, unveiled a three-year variable rate mortgage at 1.99%. It is a 36-month term at a variable rate 101 basis points below their current prime rate of 3%.
“It’s the lowest rate on the market right now, and the lowest rate we have on record since April/May 2010, so I think it will create a splash similar to the BMO 2.99% mortgage rate,” said Kerri-Lynn McAllister of RateHub.ca, a company that tracks mortgage rates.
According to Peter Veselinovich, vice-president of banking and mortgages with Investors Group, they were able to set aside a block of funding to be able to offer the cut rate deal. Toronto mortgage broker Marcus Tzaferis speculates the company is willing to take a loss on the home loan, in the hopes of making money elsewhere down the line by converting their existing clients to their other services.
Benefits & Restrictions To Investors Group Mortgage 1.99% Rate:
There are some conditions to the mortgage, namely you cannot break it without selling your home for the 3-year term. Nevertheless, the loan does allow consumers to double up monthly payments and pay a lump sum of 15% of the mortgage every year.
CBC News reported:
In real dollar terms, it could knock a lot of money off a mortgage payment, at least over the short term. A standard 25-year $500,000 mortgage at a five-year rate of 2.99% works out to $2,364 a month. That mortgage under IG’s new terms would be $2,115 a month — savings of $249 monthly, at least for the first three years, and as long as the variable rate doesn’t increase.
So What Should You Do?
There’s no doubt that this rate is to push potential home buyers into buying a home using the Investors Group as their financial aid. At the end of the day, it all depends on you and your financial situation. While their rates are excellent, make sure you find the right home for you and have an excellent financial plan before you agree to anything.
If you are still unsure and would like to talk more about mortgages or to see if buying is the right step for you, don’t hesitate to contact a Toronto Royal LePage realtor like myself to guide you.
CTV News, “Canada’s mortgage market abuzz as rate lower than 2% surfaces”.
CBC.ca, “Tax Season Investors Group unveils 3-year mortgage at 1.99%”.
Financial Post, “Mortgage rates in Canada just fell below 2% from lenders”.