How oil prices affect your mortgage

Despite economists forecasting a cut in interest rates, the Bank of Canada announced that it’ll maintain its target for the overnight rate of 0.5%. Commodities and oil prices continue to take a hit, negatively impacting the economy. Since the last governor meeting in early December, the price of oil has declined from US$40 a barrel to below $30. Weakness in the energy sector could spread to other areas of the Canadian economy.
The chief economist of CIBC World Markets was proven correct when saying, “Even if the Bank of Canada doesn’t actually cut the Bank of Canada rate, they will certainly use language to convey a much higher likelihood of a rate cut ahead.”
Any lowering of the rate over the next several months could also lower your mortgage payments if you have a variable rate mortgage. Even rates for fixed mortgages that some major banks have quietly moved up could see a reversal, which creates opportunities.
As mortgage professionals, our responsibilities is to understand what’s happening in the economy and how it could benefit you. With interest rates low and the Canadian economy going through a transitional phase, now could be a great opportunity to look at your mortgage and home buying options. It’s also an ideal time for homeowners with equity to get rid of high interest credit card payments.
Contact us today. Together, we can review your mortgage and other debt and determine your options. We might be able to save you thousands of dollars and even help you pay your mortgage and other debts years sooner.