The global economy has cooled, credit markets have tightened, and it has been particularly cold here in Alberta --what a way to start 2009. While the headline stories may not be appealing, these challenging economic times have created a tremendous opportunity to homeowners looking to decrease their monthly expenses.
In response to the contraction of credit markets over the past 16 months, governments around the World have cut overnight lending rates to historic lows. Similarly, mortgage lending interest rates in Canada have dropped well below historical average lending rates. This new climate has created an opportunity for homeowners with existing mortgages to refinance, therefore, significantly lowering the cost of their mortgage. In particular, replacing an existing mortgage with a new, lower interest rate mortgage creates savings by reducing monthly mortgage payments as well as reducing the interest costs of a mortgage.
For example, a $285,000 mortgage financed in late 2007 with an interest rate of 5.89% will have monthly payments of $1,804.86/month. If that same mortgage were replaced with a new mortgage for $285,000, total monthly payments would be $1,560.02 --a savings of $244.84/month. Over the remaining term of the mortgage, this homeowner will save over $10,000 in monthly mortgage payments!
To find out how much you could potentially save, call one of the qualified Alberta Mortgage Professionals at 780-479-2222, or apply online at www.albertamortgagecentre.com.
