IT’S WORTH KNOWING THE INS AND OUTS OF YOUR MORTGAGE
It’s true and certainly something to always be mindful of, “It’s not about how much money you make, it’s how you save it.” When it comes to porting a mortgage in Canada, there are some things like interest rates that you need to factor into the equation, and we will cover these in detail in this article. Homeowners in Canada, and potential homeowners are faced with many important questions when it comes to mortgages.
We are living through interesting times with respect to interest rates. The Fed is expected to raise rates further before the end of 2017, the Bank of England is clearly on a similar trajectory, and in time the European Central Bank will move away from quantitative easing towards quantitative tightening. What does this mean for mortgage holders around the world?
The Canadian Economic Scene
In Canada, the current bank rate is 1%. The BOC (Bank of Canada) decided to maintain the overnight rates when it met on Wednesday, 21 October 2017. The Bank of Canada forecasts that inflation will hit 2% by Q2 2018, later than economists projected. In 2017, real GDP grew at 3.1%, and is expected to contract to 2.1% next year. Growth projections for 2019 are weaker at just 1.5%. Interest rates are among the most important factors when determining what to do with mortgages – fixed or variable rates.
The latest data indicates that Canada’s GDP fell by 0.1% in August, after near-flat growth in July. Sadly, economists anticipated 0.1% growth of Canadian GDP in August. This sent the CAD plunging against the USD midweek. Now that November has rolled by, the CAD/USD pair is trading at 0.78031, down from 0.7988 a month ago. The 52-week high of the pair is 0.8290 and the 52-week low is 0.7251.
How Can Porting a Mortgage Help?
If your fixed interest-rate on your mortgage is low, and interest rates are rising, you may wish to consider porting a mortgage. Alternatively, if interest rates are slated to fall and you have a variable interest rate, you may be looking to take advantage of that.
In either case, these are called porting a mortgage. You may wish to hand over your existing mortgage to the buyer of your property, a terrific benefit when you’re moving. In all cases, it’s important to evaluate whether it is worth all the time and effort to port your mortgage.
One of the ways you can do this is by reading the mortgage porting guide by YoungAndThrifty . It details multiple scenarios where it may be beneficial to you to port your mortgage in Canada.
We made reference to interest rates earlier in this article since they are the most important determinant of whether you should port your mortgage or not. Check your current interest rate against the actual interest rate – how does it compare?
For example, in Canada, the latest statistics indicate that the 5-year fixed rates at lenders range between 2.84% on the low end and 3.34% on the high-end. Your payments for these types of mortgages ($250,000 with a $50,000 down payment) range from $930-$982 per month.
Cases Where You May Want to Port a Mortgage
It doesn’t really pay to look at the differences between fixed interest rates and variable interest rates at this juncture. Interest rates are simply too low for this to make much of an impact.
In fact, most people would be happy with the prevailing interest rate, so variable rates are likely to be higher in the future than they are now. Porting a mortgage is all about transferring your debt from your old house to a new house.
You may be in need of financing for purchasing a new property, or you may be transferring the identical mortgage to your new property. It is always best to port a mortgage when your current mortgage rate is lower than the market rate.
You may also wish to consider porting a mortgage if the amount of money that you borrowed is more than you need for your new mortgage. Don’t take porting a mortgage as a given – as rates start rising, banks and financial institutions may be less inclined to offer this.
A Week In My Life
The past week in my life covered insulating the basement on my own and then roofing the in-laws house with a friend of mine.
The house is huge so it took us 5 days but mostly because of weather. It wasn’t the ideal time to do the roof but it had to be done. It’s finished and they can rest assured that they won’t have any major water damage.
During the time we were away there was no way I could blog so you’ve probably noticed that I haven’t posted in a week. Life comes first for me I’m afraid.
The good news is the blog will have a new look shortly so there’s something exciting to look forward to as we head into our 6th year here at Canadian Budget Binder.
What once started as a personal journey about budgeting has taken off and here I am years later still chatting to fans and professionals about finance. I love it.
As we get back to normal life you’ll start to see me posting a bit more so hang on to your shoes…and your wallet. 🙂
CBB Published Posts
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Top Post This Week: How Much Should My Grocery Budget Be?
As mentioned there were no blog posts this week due to me being out-of-town for a family roofing project!
Top Finance Weekly Read
Every chance I get including today’s blog post I sneak in a reminder about the number one reason people save money or waste money. The quote I created for myself and now my fans “It’s not about how much money you make it’s how you save it” is not only accurate it can be somewhat of a money miracle for many people who are struggling or wanting to get ahead now or in the future.
I came across Ms. Liz Money Matters and read “$10 Can Be Life Changing” and surprised to read how you can be given false information that will boost your passion for finance or the right information. What I love about this post is that it is simple to understand and that many can relate to without having an interpreter.
You know how some of those finance blog posts can come across as intimidating? This one is not. In just 39 years you can have one million dollars approx $400,000 given inflation by saving $10 a day. If you can’t find the $10 look harder.
Making a difference (MAD) 2017
Welcome to the 2017 Making A Difference series! Join the networking movement of Personal Finance Bloggers around the world.
If you are a personal finance blogger and would like your blog to be featured simply drop me an email. I’m currently booking December 2017-Limited spots.
Have you ever found yourself up late at night, bingeing on personal finance blogs, the faint glow from the screen highlighting your beautiful, budgeting self, and thought to yourself:
“Wow, this is great, but I really wish there were more dog pictures. Every personal finance post should have *at least* one dog picture. Oh, and the dog should be an elderly golden retriever with a goofy smile and white face because adorbs.
The dog could, like, illustrate financial principles like investing or fiscal responsibility. It would be really great if the dog’s owners were at least partially obsessive and tweeted videos of him eating a full turkey dinner for Thanksgiving.
Imagine if they didn’t even eat meat themselves, but they cooked turkey just for their dog. And if invited to introduce themselves on a blog owned by a super nice Canadian, they would spend the first 200 words talking about their dog in a weird hypothetical quote instead of actually, you know, introducing themselves. Super interactive calculators that visualize time to financial independence and the like would be cool, too, but mostly I just need more finance-related dog pictures in my life”? Read on, fam, read on.
I’m Felicity, head writer at Fetching Financial Freedom. My husband, Fergus, and I both work in technology and are aiming to “retire” at the ages of 29 and 35, in less than two years!
We write posts based on our own struggles with understanding finances, often with visuals, and increasingly with interactive calculators. We loved the New York Times Rent vs. Buy calculator, but we didn’t see any tools available for evaluating multi-family properties, and especially no tools for owner-occupied multi-family real estate plans — so we made our own!
We’re constantly aiming to simplify complicated subjects and help people understand concepts intuitively through exploration. Well, Fergus and I are, at any rate. Our dog, Fluffster, is mostly aiming to cover our apartment in fur.
Fan Brag of the Week
If you’ve got a brag that you would love to share email me a photo and tell us what you’ve got and costs involved. For every brag whether it gets posted on the blog or not you get an entry into the yearly draw for a gift card.
Jen Peacock picked up some awesome new accessories for her pet dog and for a fraction of the retail price. Best of all.. well I’ll let Jen tell you.
These are the goodies I found this past weekend.
- Dog bed (new), dog food scoop, dog Christmas stocking, purple hanging organizer $10 (asking was $12)
- Two hair bands, two packs of rubber end covers $1
- Shaving cream and 3 small shaving creams $2 (asking was $4.50)
- Three Tupperware containers and kids book $2
- IKEA bin $.25
Total spent $15.25
CBB Words of Wisdom
Top Chef Recipe Pick
It’s time to start sharing all recipes that are festive for the holidays. This is one of my favourite times of the year because I get to make and test various baked goods from around the world. Some of the best treats you will ever taste are made right at home.
While hanging out over at Cooking Classy I fell in love with these simple Peppermint Meltaway Cookies. What I’m going to do is switch this up and try a Keto version and see if we can replicate this look which I’m almost certain I can.
This rustic wood sled ornament is adorable and our son will love making this Christmas craft for the tree. We’re starting a tradition where every year he gets to make a craft ornament for the tree so one day he can take them for his own memories. Thanks Fireflies and Mud Pies for this great craft idea.
Saturday Search Term Giggles
Always begin and end your day with a SMILE!- Mr.CBB
Every week I get tens of thousands of people visit Canadian Budget Binder because they did a search online and found my blog. (SIC) means I’ve copied the text exactly and it has spelling errors.
Most times funny, Sometimes serious.
- Do freezer bags work foil shoplifting? – Say what? You want to use a freezer bag to put a stolen item inside in hopes of not getting caught by the security scanner? Haha.. I hope I’m reading this correctly. Anyone?
- Is it ok to tell my mother how much money I have in the bank?– Well, if you’re 16 maybe but this is up to you and whether you want her to know.
- Is Selection better than No Name– Hmm, they are both pretty much the same. In fact they probably are name brand products disguised under the no-name branding. The ding-dong consumers (I’m one too) probably buy name brand for more money when the No Name is the same thing.
Don’t forget to Follow me on Social Media and Subscribe to the blog.
Hey…if you see any mistakes let me know. I’m not an editor just a guy who likes to write and yes I make mistakes.
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Note: Some posts on CBB may paid and written by me and is of my opinion of a product/service. Please read disclaimer.