With the recent increase that TD has made to their Prime rate, it leaves a lot of mortgage holders with a variable rate questioning what this means to them. Let me tell you.
First, it is only TD that has recently changed their Prime rate from 2.7% to 2.85% – so far anyway. Typically once one lender makes that change, the rest will eventually follow but for now, this only affects you if you have a variable rate mortgage with TD bank.
When a bank decides to raise their Prime rate, it could mean you will have an increase in your mortgage payment to cover the extra interest but each bank does have the option to leave your mortgage payment the same and instead adjust the amount of your mortgage payment that will go toward your principle balance vs your interest. Meaning, a little more of your mortgage payment will be going to interest and a little less to principle. This will cause you to pay more interest over the term and will leave you with a higher balance at maturity.
This is just one of the many changes that have happened in our mortgage world over the last few weeks. If you are concerned with how these changes may affect your ability to buy, your current mortgage or even your future renewal options, please don’t hesitate to contact me.
Naomi Hamm, Mortgage Broker & Partner
Office: (204) 727-2177
Cell: (204) 724-7290