Tuesday, March 24, 2009

Survey finds Canadians may not be benefiting from savings associated with rate guarantees

[Source - CNW Group - ING Canada Survey]
TORONTO, March 24 /CNW/ - A mortgage is one of the biggest expenses a Canadian will take on during their lifetime, yet close to half wait less than 30 days before their home's closing date to secure a rate, according to are cent Angus Reid poll. The poll, commissioned by ING DIRECT, found that 40 per cent of Canadian mortgage holders waited only 30 days or less in advance of the home's closing, while another 27 per cent waited nearly two months.
This last minute behaviour indicates that many Canadians are not taking advantage of the savings inherent in securing rate guarantees which are available as early as 90 to 120 days before a home closes. Analysis shows that those who used the full rate guarantee period of 120 days, saved 0.18 per cent on average or about a $1,800 over five years. These savings are based on a $200,000 mortgage with a 25 year amortization, five year fixed term at 6.96% (average posted five year fixed rate over last 10 years) and paid monthly.
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