Be Mortgage Savvy in 2008

    As interest rates fall, questions rise - Invis offers answers.

    TORONTO, Jan. 22 /CNW/ - The Bank of Canada's decision today to cut its
key interest rate by a quarter point comes at a time when a lot of Canadians
are wondering how current trends in the overall economy will impact their
bottom line. For most of us, our home is our biggest investment and many are
reading the headlines wondering what, if anything, they should do with their
    Gary Siegle, regional manager with Invis suggests some helpful approaches
for those who own homes and those who are thinking of buying real estate soon.
    For homeowners who now have a variable-rate mortgage, Siegle advises
sticking with this type of mortgage for the time being.
    "For those with variable mortgages, falling rates mean more opportunity
to pay down their mortgage," he says. "If your variable mortgage is the type
with unchanging monthly payments, a rate reduction means more of your money is
going towards paying down your debt. If your payments are reduced in tandem
with rates, consider keeping your payment the same, to attack the mortgage
principal faster."
    This advantage also applies to borrowers with lines of credit based on
the prime rate.
    For homeowners currently in a fixed-rate mortgage, it can pay to
fine-tune how they make their payments. Switching from regular monthly
payments to accelerated bi-weekly payments can offer a way to pay down debt
more quickly and save significantly on interest costs over the life of the
    On a $200,000 fixed-rate mortgage at a now-competitive 5.99 percent,
monthly payments would be $1,278.42. Over the 25 years of this mortgage the
borrower would pay a total of $183,529 in interest. With the same mortgage but
with accelerated bi-weekly payments, the borrower would pay $639.21 every
second week, and save $33,923 in interest and pay off the mortgage in just
over 21 years.
    Siegle adds this advice: "Borrowers who have a fixed-rate mortgage that
is coming up for renewal should talk with a mortgage broker, to make sure that
they are being offered a competitive rate," he says.
    For homebuyers looking at getting a variable-rate mortgage, Siegle
asserts that this is a good approach in the current interest rate environment.
Variable rate mortgages have historically offered greater interest savings
over the long term but require homeowners to keep an eye on interest rate
    Not sure if you should "lock in" your monthly payment? A variable-rate
mortgage will allow you to monitor rates while having the option to convert to
a fixed-rate mortgage at a later date.
    For homebuyers wanting to go with a fixed rate, this is the mortgage
strategy preferred by most borrowers (72 per cent according to a 2007 study by
the Canadian Association of Accredited Mortgage Professionals), as it offers
stability in a shifting interest rate environment.
    Siegle notes that rates on fixed mortgages have been fairly steady in
recent weeks, although he adds that mortgage shoppers can't go wrong with a
mortgage pre-approval with a rate hold. "If rates drop, you'll benefit from
the new, lower rate. If rates on fixed mortgages rise during the rate hold,
you still have your original lower rate." A mortgage broker will often be able
to obtain a rate hold for a 120 day period.

    Invis is Canada's largest mortgage brokerage firm with a national team of
over 800 mortgage consultants. Invis Mortgage Consultants provide expert,
unbiased mortgage advice to first time homebuyers as well as those looking to
renew or refinance their mortgage, purchase investment properties, or
consolidate debts.

For further information:

For further information: Media contact: Jessica Davidson,, (416) 969-2735

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