June’s inflation rate reduced to 2.7 percent from 2.9 percent in May, giving the BOC a reason to lower the current policy interest rate. On June 5 the Bank of Canada lowered the interest rate 25 basis points to 4.75 per cent, and experts are betting on another 25 point reduction on Wednesday.
In the above video, Lower Mainland mortgage broker Kimberly Coutts, aka the “Mortgage Maven,” joined The Market Online to discuss how a potential rate cut might affect the real estate market for those thinking about buying as well as those who may want to invest.
Economists are saying there is a 90 per cent chance of a cut and Coutts believes that, “there’s probably going to be a psychological shift in buyers minds.” From sitting on the sidelines, potential buyers might start to find out what they can get pre-approved for when looking to borrow for a new home and get into the real estate market.
Coutts discusses how the prime rate affects variable mortgages, if now is a good time to buy a home and the potential for using home equity to finance other investments and grow your money and wealth. She explains the advantage of a home equity line of credit (HELOC mortgage) and the questions you need to ask when deciding between a fixed and variable mortgage.
In addition we discuss the difference between directly approaching a bank for a mortgage or speaking with a mortgage broker.
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Check out our recent interview with Allan Small, senior investment advisor of the Allan Small Investment Group with iA Private Wealth discuss the potential BOC quarter point cut: “Investment expert eyes Bank of Canada’s next interest rate move.”
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