Canadians race to refinance mortgages after Bank of Canada cuts rates due to COVID-19
LowestRates.ca sees 389% surge in mortgage refinancing quotes from February to March
TORONTO, April 7, 2020 /CNW/ - Financial rate comparison site LowestRates.ca has seen an unprecedented increase in the number of Canadians using its mortgage quoter to refinance their homes, following emergency rate cuts made by the Bank of Canada in March.
The three rate cuts, announced on March 4, March 13, and March 27, were made in an effort to combat the economic shock the nation is facing as a result of the COVID-19 pandemic. The most recent rate cut has brought the key interest rate down to 0.25%—its lowest level since 2010—and has prompted many Canadians to refinance their mortgages.
LowestRates.ca examined its data to compare the number of mortgage quotes in February and March of this year, as well as the number of quotes generated in March 2020 compared to March 2019. A mortgage "quote" can be defined as a consumer who has used the LowestRates.ca mortgage quoter to compare rates and has filled in their information to request a formal offer from one of the banks or brokers LowestRates.ca compares on its website.
The numbers show:
- The total rise in mortgage quotes in March 2020 when compared to February 2020 was 101%
- The total rise in mortgage quotes in March 2020 when compared to March 2019 was 109%
- The total rise in refinancing mortgage quotes in March 2020 compared to February 2020 was 389%
- The total rise in refinancing mortgage quotes in March 2020 compared to March 2019 was 156%
"The latest rate cut has led to some of the best refinancing deals we've seen in years," said Justin Thouin, Co-Founder and CEO of LowestRates.ca. "There's some uncertainty about whether these deals will continue to last, but in the meantime, we're seeing a flood of Canadians trying to take advantage of them. Being able to refinance to a lower rate can save you thousands of dollars a year."
Let's say you have a $480,000 fixed-rate mortgage at 3.09%, with a 25 year-amortization and a five-year term locked in for another four years. Right now, your monthly payments are $2,294.
However, if you can refinance to 2.39% as a result of the recent rate cuts, your monthly mortgage payment now falls to $2,124. That's a monthly decrease of $170.
Over the remaining four years of your term, that means you save $8,160 on your mortgage.
Read the full report at: https://www.lowestrates.ca/blog/homes/rate-cuts-canadian-mortgage-refinancings-covid-19
About LowestRates.ca
LowestRates.ca is an online rate comparison site for insurance, mortgages, loans and credit card rates in Canada. The free, independent service connects consumers directly with financial institutions and providers from all over North America to offer Canadians a comprehensive list of rates. LowestRates.ca's mission is to help Canadians become more financially literate, with the near-term goal of saving them $1 billion in interest and fees.
SOURCE LowestRates.ca
or to request an interview with Justin Thouin, please contact: Jenna Illies, Strategist, Public Relations, C: 416.877.1973, [email protected]
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