Should you really pay attention or is there too much in a day to really notice?
Recently BMO blazed a path that has never been seen before...a 4 year fixed interest rate that was below prime! 2.99%
OMG, this was BIG as there has not been this type of fixed rate discount in recent memory. Other banks followed with rate discounts and there was a flurry of activity. Busy, busy.
Having said this, it didn't last very long...2 weeks to be exact! Like a puff of smoke it was over and now we are headed back to rates above prime.
Now first and foremost, it was hard to qualify for the 2.99%, because in order to get the lower rate, you needed to qualify at the higher floor rate (this is a whole other blog). Let this be a lesson in keeping your credit clean and your down payment as large as you can possibly afford....but I digress.
What I am getting at is for the people that did qualify, this meant HUGE savings in 4 years.
One example I personally saw was a client that I have who saved a whopping $9,996.41 just by locking in at the 2.99% vs 3.29% (the new "low" rate)! Not to mention that in doing this, they are able to pay down their mortgage faster with the $$ that they would have otherwise put away to interest. At the end of the day, they were ahead way more than $9,996...but almost $33,000! Crazy what a day makes..and for that matter how amortizations and interest works.
What is the moral of this story, if you are planning on renewing your mortgage in the near future, or have thought of refinancing, it is best to call your local Mortgage Broker a.s.a.p. and have them do the legwork for you to find you the best deal available. (I am always available for a phone call...OK, this is a shameless plug.)
Remember, the Broker is FREE to you and only gets paid when you fund your mortgage with the bank, and not before. They have a real reason for doing what makes you happy and that is many times, saving you $$!
Until next blog...
Liz
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