5 Actions to Take Before the BOC Raises Interest Rates
July 9, 2021 | Posted by: Keith Leighton
5 Actions to Take Before the BOC Raises Interest Rates
The Bank of Canada holds the key interest rate at 0.25 per cent, but as the economy recovers from the COVID-19 pandemic, inflation is rising and more people are getting back to work. A rate hike is predicted to come as soon as late 2022. Time is running out to get a cheap loan for a purchase, renovation project or money-saving refinance. Borrowers can still take advantage of the low interest opportunities. Here are five actions to consider before interest rates rise.
1. Refinance your home loan
If your credit score is above 680 and you have at least 20% equity in your home and your current mortgage rate is 0.75 per cent higher than current published rates, it’s time to look into a new deal. Keep in mind your home’s rising value also offers an opportunity to leverage your equity for all kinds of needs such a renovations or debt consolidation on high-interest loans and credit cards
2. Consolidate your debt
High-interest debt is a monthly drain on your bank balance and adds up quickly. If you can’t borrow from your home equity to pay off card balances, a debt consolidation loan could help you get out of debt sooner and save you a lot of money on expensive interest.
3. Work on your credit score
Now is the time to work on improving your credit score. When borrowing costs are higher overall, it’s even more important to unlock the lowest possible rate. Boosting your credit score will entice all types of lenders, from credit-card issuers to those offering mortgages.
4. Refinance your private student loans
As with other forms of debt, missing payments on your student loans can tank your credit score and make it harder for you to rent an apartment, buy a home or even get certain jobs. If you are struggling to make your payments, check whether you qualify for a government Repayment Assistance Plan. Although it’s easy to get a good rate on a private loan right now, refinancing a government loan through a private lender will disqualify you from student tax credits and other support. However, if you already took out a private loan or line of credit to cover excess education costs, refinancing today could offer serious relief.
5. Find better returns in the stock market
The low-interest rates are great for borrowers but pays little on a savings account. If you are willing to take a risk, consider investing your extra money for a larger return. Some places allow you to invest your cash for free. If you only have a few dollars to spare, you can get an account that invests for you.
To Learn More, contact your DLC Mortgage Professional today!
