With the Bank of Canada keeping rates at its historic low until the middle of 2010, people tend to overlook the fact that the increase in rates will increase, and in time reach levels higher than before.
Although, not many will have to worry about the increase in rates till their current mortgage expires, this will tend to be in 5 years, as the most popular mortgage is the fiver year fixed rate mortgage.
Now the reason I am bringing this to your attention now is on the fact that when the rates increase, and the time comes to choose another mortgage, you are most likely going to get a high mortgage rate.
Now, you might feel that by then you will be financially stable to endure any change, however that might not always be the case.
What you should do in preparation for the rate increase is to start building an emergency fund for this sole purpose.
By then you will have prepared enough funds in the event you need to compensate any mortgage payments if the need arises.
Let us say you do become financially stable and do not need to rely on the emergency fund you have created, well it will not go to waste because you will have an emergency fund for anything you need.
Either way you look at it, you win.
Just remember, that low rates will not be around much longer, and it is about time you start preparing for the future.
Glen Chapman
Broker of Record with Club “100″ GMAC Real Estate
www.club100realestate.com
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