R&D Insurance and Financial Services - Should I switch to a fixed rate mortgage?
By R&D Financial

Should I Switch to a Fixed Rate Mortgage?

Don’t Be in a Hurry to Ditch Your Variable Rate Just Yet.

The Bank of Canada’s interest rate increase of 0.5% — the largest single rate increase in decades – may have sent variable rate mortgage holders into a panic. We’ve already had many clients contact us, asking what rates are likely to do in the future, and if now is the time to switch. But really we can summarize the current situation with this simple question: should I switch to a fixed rate mortgage?

In June, we are expecting additional increases which could lead to a prime lending rate of 3.7%, which may send many of you into a panic. While there is certainly a lot to be said for predictability and peace of mind, now may not be the time to switch.

Banks are well positioned to profit in this kind of environment (that is why we work for you and not for them!). They will try and entice you with a free offer to switch from a variable rate to a fixed rate. Typically they will present a 5 year fixed rate “deal” of 3.99% that expires in a few days; otherwise your rate will increase to 4.14%. They may try to convince you that rates will continue climbing to high levels, and that riding out a variable rate as we enter into a possible recession could be catastrophic.

The sad truth is that the time to lock in a fixed-rate was likely when we were at historic lows for 5 year fixed rates in the 2.59-2.99% range.

At the same time, many variable rate holders secured below-prime discounts (typically in the 1- 1.25% range), but these discounts are for the most part gone for refinances and conventional mortgages.  We anticipate that lenders will ease up on discounts, leaving us with variable rates in and around the prime minus 0.5-0.75% range.

So, what should our variable-rate mortgage clients do, and how can they be prepared for the expected climb in rates over the next 12 to 18 months? 

Our team has a combined experience of two decades in working with our clients and coaching them on the benefits of variable rates mortages. Yes, there is some risk (and at times) a bit of panic involved, but we leverage floating-rate products from a variety of lenders to save our clients tens of thousands of dollars in interest costs and to cut years from their mortgage amortization.

Variable mortages aren’t for everyone, and if you aren’t sure what to do in the face of rising rates, remember: don’t panic or jump at a seemingly attractive offer from the bank. Instead, take the time to meet with us and review all of your options.


RDFS - ukrainian flag
By R&D Financial

Market Update: Russian Invasion of Ukraine

*This material was provided by IA Clarington*

What happened:
On February 24th, 2022, Russian President Vladimir Putin declared the beginning of a “special military operation” aimed at the “demilitarization and denazification of Ukraine.” Shortly thereafter, Russian attacks began on cities across the country, including the capital city of Kyiv.

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By R&D Financial

New Year Contest

We want to help you get 2022 off to a hreat start! Just leave us a review on Google, and email a screenshot of your review to info@rdfs.ca. One lucky winner will receive a winter prize pack, consisting of some fun fall items.

Hopefully we’ve earned 5 stars from you – and if we haven’t, feel free to reach out to us before submitting your review and we would be glad to help.

Click the link below, and you should see our Google business profile in your search results. From there you can leave a review. If you need more help, just email info@rdfs.ca. Thank you!

R&D Insurance and Financial Services on Google

renting vs buying - what you need to know - first time home buyers - r and d insurance and financial services
By R&D Financial

Renting vs Buying – What You Need to Know!

When it comes to the Canadian housing market, there are lots of options for where to live! From renting an apartment to owning a single-family home, it all comes down to where you see yourself living and what you can afford! The beauty is, there is no right or wrong answer when it comes to renting versus buying but let’s break down the pros and cons of both and hopefully help you to decide which is best for you!

Read more “Renting vs Buying – What You Need to Know!”
refinancing your home - r and d insurance and financial services - 1200px
By R&D Financial

Refinancing Your Home

One of the best parts about life is that it is ever-changing. This is one of the reasons that mortgages are available on short-term contracts (such as the standard 5-year) so that you can adjust your mortgage over time to best suit your needs. However, in some cases you cannot wait until the term is up. In fact, roughly six out of ten homeowners with the standard five-year fixed rate mortgage break their terms within three years.

Read more “Refinancing Your Home”