Good morning As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. At 10:00 am EST, Wednesday January 22nd, 2014 the Bank of Canada again did what we expected them to do … they continued to maintain their overnight rate. What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%. This is fabulous news but don't forget to make the most of the low payments you still have, as the rate will increase in the future. If you haven't done so already, give me a call and we can chat about helping you get set up with a great GIC, Tax Free Savings Account, or Retirement Savings Plan as your payments continue to remain low. So did you, or someone you know, blow their budget over the holiday season and have started to get those dreaded credit card bills in and the reality is starting to sink in... let me help you get back on track with a review of your financial situation which might be a savings plan, credit counselling or debt consolidation to pay off high interest loans or credit cards. If you would like to chat about some budgeting and saving strategies – let me know as I would be happy to assist. Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision today: "Inflation in Canada has moved further below the 2% target, owing largely to significant excess supply in the economy and heightened competition in the retail sector. Global growth is expected to strengthen over the next two years with the US leading this acceleration, aided by diminishing fiscal drag, accommodative monetary policy and stronger household balance sheets. The improving U.S. outlook is affecting global bond, equity, and currency markets. Growth in other regions is evolving largely as projected. In Canada, growth improved in the second half of 2013. However, there have been few signs of the anticipated rebalancing towards exports and business investment. Stronger U.S. demand, as well as the recent depreciation of the Canadian dollar, should help to boost exports and, in turn, business confidence and investment". Based on this news, the Bank still does not expect to increase their rate in the foreseeable future with any change most likely to occur late 2014 or even not until 2015! Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won't see a large significant increase all at once. Fixed rates dropped just slightly since the last announcement to around 3.39% to 3.59% for a five year fixed term. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I'd recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now. However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is March 5th, 2014 at which time I'll be in touch again. I wonder if I can ask a favour – this is a great time for first time home buyers who are thinking of purchasing in the Spring to start with a pre-approval plan now to get them on track and save unnecessary interest. Also if you hear a friend or family member talk about going thru a financially tough time – maybe I can help with some budgeting and debt consolidation options for them. In either of these cases, would you mind passing my contact information on to them – this is very much appreciated. Yours truly, Kupina Mortgage Team
Wednesday, 22 January 2014
Tuesday, 21 January 2014
How to Become Mortgage-Free Sooner
Paying your mortgage off the traditional way takes 25 to 40 years and costs about TWICE the purchase price of your home. Here are some effective ways to pay off your mortgage sooner, build equity faster and save thousands in interest.
- Change your payments. Simply increasing your payment frequency to bi-weekly or weekly costs nothing and can save thousands of dollars over the life of your mortgage. If you can afford to pay a little extra, consider accelerated bi-weekly or weekly payments—these are equivalent to making one extra monthly payment per year which results in substantial savings. Or you can make a lump sum payment which can realize savings several times as great over the life of your mortgage.
- All-in-one mortgage. Instead of making extra payments, consider switching to a mortgage that pays off the principal faster without costing you anything more. All-in-one mortgages combine a line-of-credit mortgage with a chequing account to reduce interest costs and pay off your mortgage in as little as half the time, without changing your spending habits. You deposit your pay into the all-in-one account and pay bills as you normally would. While you're not using your money, it's used to reduce your daily loan balance. Over the life of the loan, this can save hundreds of thousands of dollars in interest!
- Merged account mortgage. If you'd rather not refinance your existing mortgage to switch to an all-in-one mortgage, consider a merged account mortgage. This system uses your existing mortgage (any type of first mortgage will work), an advanced line-of-credit (ALOC), and specialized software that makes a connection between your bank account, ALOC and mortgage. Each time you deposit income into your account, the software automatically generates an interest cancellation on your mortgage. The result is that a 30-year mortgage can be paid off in about 8 to 11 years, with no change to your lifestyle or refinancing of your existing mortgage.
Saturday, 4 January 2014
Rate prediction for 2014: Can you survive payment shock?
As the US economy improves, it's becoming less necessary for central banks on both sides of the border to hold down interest rates. Long term fixed mortgage rates have been climbing for many months now. And as the economy continues to improve, it will eventually become necessary for the Bank of Canada rate to rise, which would have a direct impact on variable rate mortgages. Currently, the Bank rate is at 1%, but some economists predict it could start rising by late 2014 and reach as high as 2.25% by the end of 2015. Of course, even if mortgage rates rise by a couple of points, they're still very low historically. But what matters to mortgage holders is payment affordability if they're in a variable mortgage or they need to refinance. Depending on what your rate was when you first took out the mortgage, the new rate you'll be paying could be substantially higher. To see if you're at risk of payment shock, give me a call. I'll do a free analysis of your current mortgage to see how rising rates might impact you. If risks exist, we can discuss the possibility of refinancing now before rates rise further. Rest assured, I'll discuss all your options, offer affordable alternatives and help make sure your financial future is secure. Call me today. Mark Kupina | www.kupinamortgage.com
The secret to attracting more health, wealth and happiness in 2014 and beyond
Like most people, you probably have lots of days when things go wrong and it's hard to feel grateful about what's happening in your life. But researchers are discovering that people who develop a consistent "attitude of gratitude" enjoy huge benefits. Expressing gratitude means always being aware of the good things that happen to you and never taking them for granted. The very act of being grateful puts you in a more positive mood, with more overall life satisfaction and happiness. In one study, participants who wrote down five things they felt grateful for, once a week for ten weeks, reported feeling less stress, and more optimism and contentment. When participants wrote gratitude letters to the significant people in their lives, they experienced greater joy and more meaningful relationships. An attitude of gratitude even promotes better health. Grateful people report fewer headaches, nausea, acne, anxiety, depression, and they spend more time exercising. The good news is that an attitude of gratitude can be cultivated. Here are some simple steps to help you feel more grateful so you can enjoy the many benefits:
- Express gratitude. Make a point of telling others how thankful you are to have them in your life, and mean it.
- Gratitude reminders. When you notice yourself feeling down about something, try to think of 4-5 related things you're grateful for. For example, if you're stressed at work, think of some things you like about your job.
- Strategic comparisons. Instead of feeling inadequate by comparing yourself to others who are more fortunate than you, compare yourself with those less fortunate and feel grateful.
- Journal. Every day, write down 3-5 things you feel grateful for. Not only does this help you focus on the abundance in your life, it gives you something uplifting to read when you're feeling low.
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