Rs 1 cr in 1 hour: New portal to ease loans for MSMEs

NEW DELHI: In a bid to bolster credit growth, the Finance Ministry is planning to expand the scope of the recently launched portal that enables MSMEs to obtain a loan of up to Rs 1 crore within an hour, a senior official said.

“We have started this web portal www.psbloansin59minutes.com for MSME borrowers but going forward more loan products would be onboarded on the portal. It may include personal loan, home loan etc,” financial services secretary Rajiv Kumar told PTI.

Based on the experience of this automated loan processing system, other products could be onboarded, he said, adding “contactless banking is going to be the new paradigm as it fosters transparency”.

Speaking about the new portal launched by finance minister Arun Jaitley last week, Kumar said it will help improve credit flow to the MSME sector which is the backbone of the country’s economy in terms of output, exports and employment generation.

This system will stabilise and lay the foundation of a paradigm shift in the way banking is done in the next 6-7 months, he said.

Going forward, he said, linking of data will cut down lapses and information asymmetry. Once data points are connected, it will end the era of giving false information like different income statement to banks and tax authorities.

“MSMEs are vital for India’s economic ascension. Several initiatives including customised products and strategies as per their needs and automated loan processing have been introduced to achieve faster turnaround and accelerate MSMEs’ growth,” he said.

Easy availability of credit will also foster India’s entrepreneurial spirit, he added.

Highlighting the key features of the portal, he said it has set a new benchmark in loan delivery mechanism by reducing the turnaround time from 20-25 days to just 59 minutes.

Subsequent to this in-principle approval, the loan will be disbursed in 7-8 working days.

“It is one of its kind platform in MSME segment which integrates advanced fintech to ensure seamless loan approval and management. The loans are undertaken without human intervention till disbursement stage.

“A user friendly platform has been built where the MSME borrower is not required to submit any physical document for in-principle approval. The solution uses sophisticated algorithms to read and analyse data points from various sources such as IT returns, GST data, bank statements, MCA21 etc in less than an hour while capturing the applicants’ basic details using smart analytics from available documents,” he said.

The portal is a strategic initiative of a SIBDI-led consortium of banks- SBI, Bank of Baroda, PNB, Vijaya Bank and Indian Bank — incubated under the aegis of the Department of Financial Services, Ministry of Finance.

FPI outflow hits 4-month high of Rs 21,000 cr in September

NEW DELHI: Overseas investors pulled out a massive Rs 21,000 crore ($3 billion) from India’s capital markets in September, making it the steepest outflow in four months, on widening current account deficit amid global trade tensions.

The latest withdrawal comes following a net infusion of close to Rs 5,200 crore in the capital markets (both equity and debt) last month and Rs 2,300 crore in July.

Prior to that, overseas investors had pulled out over Rs 61,000 crore during April-June.

According to the latest depository data, foreign portfolio investors (FPIs) withdrew a net sum of Rs 10,825 crore from equities in September and Rs 10,198 crore from the debt market, taking the total to Rs 21,023 crore.

This was the highest outflow since May, when FPIs had pulled out Rs 29,775 crore. FPIs never fully returned to the Indian equity markets after pulling out net assets worth Rs 61,000 crore during the quarter ended June 2018.

Although they net bought assets to the tune of Rs 7,500 crore cumulatively in July and August, the quantum of inflows was much lower than what was seen in the past when they invested with full conviction.

This indicates that there has been a fair bit of uncertainty and cautiousness among FPIs investing in the Indian equity markets in the recent times, experts said.

The outflow in September was due to global trade tensions, widening current account deficit on the back of surge in oil prices, depreciating rupee, concerns over the government’s ability to meet fiscal deficit targets and lower than expected GST collection, said Himanshu Srivastava, Senior Research Analyst at Morningstar.

“All these factors deteriorated the country’s macro environment. It has also cast a doubt on the sustainability of the economic growth which is closely watched by the FPIs. This coupled with expensive valuation triggered a sell-off from FPIs in September,” he noted.

Additionally, given the global trade tensions, there has been risk-aversion among foreign investors which explains their cautious stance towards emerging markets like India, which are considered to be riskier than their developed counterparts, he added.

So far this year, FPIs have pulled out over Rs 13,000 crore from equities and more than Rs 48,000 crore from the debt markets.

Indians likely to hit quota for EB-5 visas for 1st time

Indians intending to apply for an EB-5 visa can benefit from the brief extension up to December 7 accorded to the existing scheme. This may come in handy as they can take advantage of the prevailing investment requirements of US $1 million (which translates to Rs 7.2 crore) or half a million dollars in specified target areas.

Riddled by controversy, including several investor-related frauds, the various facets of the programme, including investment norms, are likely to see a complete revision in the coming months. An Obama-era draft bill had proposed to hike the minimum threshold investment limit to $1.8 million and $1.35 million for investments.

The EB-5 programme allots green cards + to foreign investors in exchange for their investments and an undertaking to create at least 10 American jobs. Investing via a regional centre, which in turn sponsors business projects, is more common than setting up one’s own enterprise.

The brief extension in the EB-5 programme is part of the ‘spending bill’ + , which was signed recently by US President Donald Trump. Else, the ‘EB-5 Regional Centre Permanent Resident programme’ had a sunset date of September 30. Incidentally, this cut-off date was also part of a six-month extension, one of the many extensions made in recent years.

Only 10,000 EB-5 visas are issued annually, with a 7% per country cap (700 per country). If a country doesn’t meet the cap, the unused visa quota is redistributed to other countries. The number of EB-5 visas allotted to Indians has risen by 93% with 174 visas being allotted during 2017 fiscal. According to latest official statistics of the US Department of Homeland Security (DHS), during October and November last year (ie: the first two months of 2018 fiscal) 307 applications were pending from India. Immigration experts cite that applications from India may have crossed the 1,000 figure for the twelve-month period that ended in September 2018.

Currently, for Indian applicants the processing time for an EB-5 application is 18-24 months. Conditional permanent residence status is then granted to the investor and his family (the children must be unmarried and below 21 years). After two years, the investor has to apply for lifting the conditions and move towards obtaining a green card, processing of which can take up to a maximum of two years. Immigration experts say that visa retrogression (which arises when the applications exceed the cap) could increase the waiting time for a green card by a few more months.

Based on anecdotal evidence, it appears that a majority of the EB-5 applicants from India are either working in the US or have a child studying there. Various reasons are attributed to the spike in interest in EB-5 visas, which include likelihood of an increase in investment limits, tightening of H-1B visa norms and an extraordinarily long wait for H-1B workers to obtain a green card (CATO Institute has estimated the waiting period to be 151 years for those with an advanced degree). The EB-5 cuts down the time to obtain a green card.

IL&FS to implement ‘comprehensive’ restructuring plan

MUMBAI: India’s Infrastructure Financing and Leasing Services Ltd (IL&FS) said on Saturday it will develop a “comprehensive” restructuring plan for the group to pay its liabilities, as it scrambles to cut its debt pile following a series of defaults and credit downgrades in recent weeks.

A series of defaults at IL&FS, a major infrastructure financing and construction firm in which India’s largest insurer and biggest bank own stakes, have roiled India’s financial markets over the past month and sparked fears of a crisis in the country’s non-banking financial services sector.

“We will develop a comprehensive detailed plan … to demonstrate to creditors and shareholders that the intrinsic value of the group was sufficient in repaying liabilities,” IL&FS Managing Director Hari Shankara said, following a board meeting on Saturday.

IL&FS used to be a sovereign-rated entity until early last month before it was hit by a series of downgrades by credit rating agencies, which pushed its debt ratings to junk within the span of a month.

After Saturday’s board meeting at its headquarters in Mumbai, in a video message sent by the company to media, Shankara said the company will appoint a “specialist agency” to implement the plan.

A spokesman of the company separately said the company has appointed consultancy Alvarez & Marsal.

The company has filed an application seeking to block creditors from dragging it to a bankruptcy tribunal in India and will continue to pursue it, Shankara said, adding that this will help the company implement its restructuring and asset sales plan.

Credit line talks


IL&FS, which is under Rs 91,000 crore ($12.55 billion) of debt, has previously said 14 of its 25 assets had seen interest from buyers, and that it plans to raise up to Rs 3000 crore through the asset sales.

Earlier in the day, following a closed-door annual general meeting with more than two dozen shareholders in Mumbai, Shankara, in another recorded message, said the company plans to seek funding from lenders to meet its credit obligations.

It is in talks with lenders to open a fresh line of credit, seek an extension for upcoming debt payments, or secure bridge financing to avoid further defaults, two of the shareholders, who own preferential shares of the company, said.

Its priority was to execute a successful rights issue, and sales of assets, which mostly include road construction projects.

Four shareholders Reuters spoke to said the company management was grilled with multiple questions on its credit obligations and timelines for asset sales – which some analysts have said could take months to over a year. The shareholders declined to be named due to the sensitivity of the matter.

IL&FS is often called a quasi-sovereign company because India’s biggest insurer, the Life Insurance Corporation of India (LIC), owns a 25.34 percent stake in it.

LIC said on Friday it was willing to participate in the Rs 4,500 crore rights issue that IL&FS proposed in August.

The company also got shareholder approval on Saturday for the rights issue and for increasing the authorised share capital of the company from Rs 1,500 crore to Rs 5,000 crore , said a source associated with the company.

He did not wish to be named as the company was yet to announce the voting results.

The company’s other large shareholders include the ORIX Corp of Japan, which has a 23.54 percent stake and the Abu Dhabi Investment Authority (ADIA) that has a 12.56 percent. The State Bank of India also has a 6.42 percent stake in IL&FS.

China to keep ‘prudent’ monetary policy amid trade war

BEIJING: China’s central bank said Saturday it will maintain its “prudent and neutral” monetary policy while keeping an ample level of liquidity amid a trade war with the United States.

The yuan’s exchange rate and market expectations remain generally stable, giving the world’s second largest economy a stronger ability to counter external shocks, the People’s Bank of China said after its third-quarter monetary policy committee meeting, according to the official Xinhua news agency.

Amid warnings about China’s massive debt mountain, the bank said it will “guide reasonable growth in credit” and continue to deepen financial reform.

China has been locked in an intensifying trade conflict with the US, which unleashed a new wave of tariffs on $200 billion in Chinese goods on Monday, with Beijing targeting $60 billion in American products in response.

Premier Li Keqiang acknowledged last week that China is facing “greater difficulties” in maintaining steady growth in the face of the US onslaught, but he voiced confidence in its ability to “overcome obstacles”.

Analysts say a sharp depreciation of the yuan has helped China weather the tariffs storm by making its exports cheaper.

But Chinese officials have rejected accusations that Beijing is manipulating its currency.

US President Donald Trump, who has now hit $250 billion in Chinese goods, has threatened to strike at another $267 billion — essentially hitting all Chinese exports.

China would struggle to keep up with tariffs as it imported only $130 billion in American goods last year. It has so far imposed tariffs on $110 billion in products from the United States.

ONGC says may break even after gas price hike

NEW DELHI: State-owned Oil and Natural Gas Corp (ONGC) will barely break even at the new natural gas price that will come into effect from October 1, its Chairman and Managing Director Shashi Shanker has said.

The government has announced a 10 per cent higher price for natural gas at $3.36 per million British thermal unit for six month period beginning October 1.

Shanker said the average cost of production of natural gas by ONGC during 2017-18 was $3.59 per million British thermal unit.

In the current fiscal, it may be slightly less as cost of service has come down and so “maybe we will just be able to break even after the new gas price”, he told reporters here.

ONGC’s average cost of production of natural gas during 2016-17 was $3.10 per mmBtu and at the government mandated prices it was incurring significant under-recoveries from its gas business, he said.

Loss of revenues on gas business significantly impaired the company’s ability to fund its capex plans and hampers most ongoing and future development projects.

ONGC has long complained that gas price is unremunerative and it incurs loss on the business.

As per a new mechanism approved by the government in October 2014, the price of domestically produced natural gas is to be revised every six months — April 1 and October 1 — using weighted average of rates prevalent in gas surplus markets like Henry Hub (US), National Balancing Point (UK excluding Russia), Alberta (Canada) and Russia.

Using this formula, the price for October 2018 to March 2019 came to $3.36 per mmBtu as compared to $3.06 in the previous six months.

ONGC officials said the $3.59 per mmBtu average cost is without taking into account return on capital and after considering a decent return the price should be not less than $4.

India’s largest natural gas producer is demanding a floor or minimum price of natural gas be fixed at $4.2 per mmBtu for the business to make economic sense.

The official said ONGC’s significant discoveries in KG basin and Gulf of Kutch would need a higher price to bring them to production.

Gas discoveries in the shallow sea off Andhra Pradesh on the east, and off Gujarat on the west are economically unviable to produce at the current government-mandated price of $3.36, he said, adding that in the absence of a viable gas price, it will have to mothball the $1.5-billion projects.

The official said the Krishna Godavari basin block KG- OWN-2004/1 is in shallow water and does not qualify as a difficult field, which get higher gas price of $7.67 per mmBtu from October 1. On the western side, the block GK-28 in Gulf of Kutch is a nomination block which does not qualify for higher rates, he said.

While the KG block will produce a peak output of 5.35 million standard cubic metres per day, the same from Gulf of Kutch block will be around 3 mmscmd. It would take a minimum of three years to bring the gas finds to production.

The combined output is about 14 per cent of the ONGCs current output of 60 mmscmd. He said the KG block discoveries are in water depth of just about 8-metres, developing which is costly since ultra- shallow rigs are scarce and therefore expensive.

ONGC also has a couple of smaller fields with a total expected peak production of 1.1 mmscmd, which cannot viably produce at the current domestic gas prices.

Natural gas constitutes around 45 per cent of ONCG’s total crude oil and natural gas production volume. It produces around 75 per cent of the country’s natural gas output.

Gold glitters on positive global cues, jewellers’ buying

NEW DELHI: Breaking its three-day losing streak, gold bounced back by Rs 250 to Rs 31,550 per 10 gram at the bullion market Saturday in sync with a firm trend overseas amid fresh buying by local jewellers.
Silver followed suit and touched the Rs 39,000-mark by spurting Rs 1,100 to Rs 39,100 per kg backed by increased offtake by industrial units and coin makers.

Traders said sentiment bolstered largely in tandem with a firm trend overseas and pick-up in buying by local jewellers at domestic spot market.

Globally, gold rose by 0.83 per cent to $1,192.20 an ounce and silver by 2.85 per cent to $14.64 an ounce in New York in Friday’s trade.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity climbed Rs 250 each to Rs 31,550 and Rs 31,400 per 10 gram, respectively.

The metal had lost Rs 425 in the previous three days.

Sovereign, however, remained flat at Rs 24,500 per piece of 8 gram.

In line with gold, silver ready jumped by Rs 1,100 to Rs 39,100 per kg and weekly-based delivery by Rs 715 to Rs 38,575 per kg.

Silver coins, too, flared up by Rs 1,000 to Rs 73,000 for buying and Rs 74,000 for selling of 100 pieces.

OVL, partners reach out of court settlement with Rosneft

NEW DELHI: ONGC Videsh Ltd and its partners in Russia’s Sakhalin-1 project have agreed to pay Russian giant Rosneft $230 million to settle an oil production dispute out-of-court, its managing director N K Verma said.

Rosneft had dragged the Sakhalin-1 consortium to court alleging “unjust enrichment and interest gained by using other people’s money” and claimed $1.4 billion in damages. The allegations were denied by the consortium.

“We have agreed for an out-of-court settlement and the consortium has agreed to pay $230 million,” Verma told reporters here.

OVL holds 20 per cent interest in Sakhalin-1 oil and gas fields and its share would be $46 million.

“We have already paid the money,” he said.

ExxonMobil is the operator of the project with 30 per cent interest. Japan’s SODECO has 30 per cent interest and Rosneft the remaining 20 per cent.

Rosneft had demanded Rouble 89 billion from the consortium for oil that flowed to to Sakhalin-1 from its controlled Northern Chayvo oilfield.

OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), had bought 20 per cent stake in 2001 for $1.7 billion. The project started production in 2005.

Since that time, the consortium has faithfully executed its obligations under the Production Sharing Agreement (PSA) and the Russian government in 2017 extended the pact by a further 30 years, until 2051, he said.

In December 2011, Rosneft Oil Company was granted a Licence for the North Chayvo License area.

Effective August 2013, the Sakhalin-1 consortium and Rosneft entered into a Drilling Services Agreement, under which the consortium provided certain drilling services for the North Chayvo license to Rosneft Oil Company.

In September 2014, the Sakhalin-1 consortium and Rosneft Oil Company entered into a Production Handling Agreement, under which the Consortium provided certain production services for the North Chayvo license.

In June 2018, the consortium received “Statement of Claim” dated May 31, 2018 containing Rosneft allegation of “unjust enrichment” and demand of Rouble 89 billion from the consortium, he said adding Rosneft claimed compensation includes alleged damages for the period 2005-2011 during which Rosneft did not hold the North Chayvo license.

Verma said production at Sakhalin-1 reached 250,000 barrels per day, up from some 200,000 bpd, as Russia had lifted output restrictions as part of a global deal with OPEC.

The scandals bedevilling Facebook

PARIS: Facebook is at the centre of controversy yet again after admitting that up to 50 million accounts were breached by hackers.

Facebook chief executive Mark Zuckerberg said engineers discovered the breach on Tuesday, and patched it on Thursday night.

“We don’t know if any accounts were actually misused,” Zuckerberg said. “We face constant attacks from people who want to take over accounts or steal information around the world.”

Facebook reset the 50 million breached accounts, meaning users will need to sign back in using passwords. It also reset “access tokens” for another 40 million accounts as a precautionary measure.

Here is a roundup of the scandals dogging the social media giant.

In Facebook’s telling, everything goes back to 2013 when Russian-American researcher Aleksandr Kogan creates a personality prediction test app, “thisisyourdigitallife”, which is offered on the social network.

Around 300,000 people download the app, authorising access to information on their profile and also to the data of their Facebook friends.

In 2015 Facebook makes changes to its privacy policy and prevents third-party apps from accessing the data of users’ friends without their consent.

The same year the social network discovers Kogan has passed on the information retrieved via his app to the British company Cambridge Analytica (CA), which specialises in the analysis of data and strategic communication.

In 2016 CA is hired by Donald Trump’s US presidential campaign.

Facebook says it was assured by CA in 2015 that the data in question had been erased. But it estimates the firm could have had access to the data of up to 87 million users, most in the United States, without their consent, and mined this information to serve the Trump campaign.

Cambridge Analytica, which denies the accusations, has since filed for voluntary bankruptcy in the United States and Britain.

Facebook is accused of having been lax in its protection of user data, slow to intervene and consistently vague on its privacy settings.

In 2011 it signed a consent decree with US consumer protection agency the Federal Trade Commission (FTC) settling charges that it deceived consumers by telling them they could keep their information on Facebook private, and then allowing it to be shared and made public.

In March this year the FTC said it had opened an inquiry into Facebook’s privacy practices, including whether the company violated the earlier agreement, which would incur hefty fines.

Beyond the CA scandal, Facebook estimates the data of nearly all its users may have, at some time, been retrieved without their knowledge.

Facebook and sites like Google, Twitter and Tumblr are also accused of having allowed the spread through their networks of “fake news”, including to manipulate public opinion ahead of the US election in favour of Trump.

The sites have acknowledged finding on their platforms messages, accounts and pages associated with the Internet Research Agency, a Saint Petersburg operation that is alleged to be a “troll farm” connected to the Russian government.

It is accused of spreading disinformation and propaganda including via postings — often in the form of sponsored ads that target users based on their personal data — that could influence opinion, for example over immigration.

According to Facebook, more than 120 million users had seen such content.

Facebook is in particular accused of not having been vigilant enough on monitoring the content and authenticity of pages and political ads that it carries.

It announced this year that it will require that the sponsors of political ads are identified and verified.

Earlier this month, Zuckerberg said Facebook was better prepared to defend against efforts to manipulate the platform to influence elections.

“We’ve identified and removed fake accounts ahead of elections in France, Germany, Alabama, Mexico and Brazil,” Zuckerberg said.

“We’ve found and taken down foreign influence campaigns from Russia and Iran attempting to interfere in the US, UK, Middle East, and elsewhere — as well as groups in Mexico and Brazil that have been active in their own country.”

What you probably don’t know about renewing your mortgage

Around half of Canada’s mortgages are up for renewal this year. If yours is one of them, you’d be justified for feeling blue.

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As of Jan. 1, everyone getting or refinancing a mortgage has to undergo a federal mortgage stress test. That, generally, means they have to qualify for a loan with an interest rate that is higher than the rate the bank is willing to give them. If you’re renewing your existing mortgage, you can avoid the stress test — but only if you stick with your current lender, which denies the possibility to shop around for a better rate.

READ MORE: New mortgage rules 2018: A practical guide

On top of that, interest rates continue to climb, which moves the stress-test threshold higher and higher.

But things aren’t as bleak as they may look, mortgage professionals say.

WATCH: Is rent-to-own the solution if you can’t get a mortgage?

You might actually be able to renew at a lower rate

If you have a five-year fixed rate mortgage, as the vast majority of Canadian homeowners do, renewing now doesn’t mean having to switch to a higher mortgage rate. In fact, you might even be able to get a lower rate, according to financial products comparisons site Ratehub.ca.

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The best five-year fixed rate in September of 2013 was 3.29 per cent. Today, you might be able to get a five-year fixed for as low as 3.14 per cent, according to Ratehub data.

A borrower who started out in 2013 with a $400,000 amortized over 25 years would see her monthly mortgage payments drop from $1,953 over the last 5 years to $1,759, a decrease of $194.

READ MORE: Could you pass the mortgage stress test? Here’s how to find out

That’s why you should give yourself plenty of time to shop around for the best rate, according to James Laird, co-founder of Ratehub Inc. and president of CanWise Financial mortgage brokerage.

“Giving yourself a head start on comparing rates also gives you time to consider switching providers,” he said in a statement.

WATCH: Weighing the costs and benefits of reverse mortgages

You will probably pass the stress test

Changing lenders to get a lower rate isn’t in the cards for borrowers who don’t pass the stress test. But Laird said the majority of mortgage-renewal applicants won’t have to worry about that.

“At renewal a borrowers mortgage balance is lower, and it’s likely that the borrowers household income has increased as well. The majority of consumers can expect to pass the stress test at renewal,” Laird told Global News via email.

READ MORE: 3 tips that could save you thousands on your mortgage, as interest rates rise

And even for those who don’t pass the stress test, there may be at least one workaround.

“If you don’t pass the stress test simply because you have a lot of higher-interest non-mortgage debt … and you have sufficient equity in your home, refinancing may be your best play,’ said Rob McLister, founder of rate-comparisons site RateSpy.com and mortgage planner at intelliMortgage.com.

That’s because consolidating your debts into a lower-interest loan might help you “come in under the mortgage industry’s maximum debt-ratio limits,” McLister said.

An application to refinance a mortgage is also subject to the stress test, but some borrowers might be in a better position to pass the test if they refinance than if they simply renew their mortgage, according to McLister.

READ MORE: The deal hunter’s guide to getting the lowest mortgage rate

Refinancing can significantly lower your so-called total debt service ratio (TDS), which measures how much of your income goes toward covering all your monthly debt payments. For example, if you have significant credit card debt at 20 per cent interest and are able to fold that debt into your mortgage at a much lower rate, your monthly payments will shrink significantly, bring down your TDS.

Lenders also look at something called gross debt-service ratio (GDS), the percentage of your pre-tax income needed to pay your housing costs. In addition to the stress-tested (i.e. higher) monthly mortgage payment, your bank will look at the monthly cost of your property taxes or half of your condo fees and your heating costs.

READ MORE: Here’s the income you need to pass the mortgage stress test across Canada

Refinancing your mortgage will increase your mortgage payments, which will push up your GDS. But your GDS will go up much less than your TDS came down, which will likely allow you to pass the stress-test bar, McLister said.

Still, “any spare cash this creates should ideally be applied to your debt principal so you can dig out of your debt hole quicker,” he added.

WATCH: Should you save for retirement or pay down your mortgage as fast as you can?

Variable rates are looking good

Variable rates are also looking better these days than they did in 2013. The average well-qualified borrower can count on variable rates around 2.68 per cent today, compared to 2.75 per cent in September of 2018, according to data from RateSpy.

READ MORE: Here goes another interest rate hike. Time to consider variable-rate mortgages

Also, the spread between fixed and variable rates has been widening, making a floating rate a more attractive option.

“Consumers should consider a variable rate mortgage even in a rising rate environment,” Laird said. “This is particularly true for [those] who have a smaller mortgage balance and/or … who plan on paying down their mortgage rapidly.”

WATCH: How an interest rate hike affects your mortgage

You can lock in a fixed rate four months in advance

If you want to renew with a fixed rate, the bad news is that rates are likely headed nowhere but up.

“Fixed rates move with government bond yields. Right now, those yields are near a seven-year high. There’s a very good chance yields, and hence five-year fixed rates, could break out to the upside,” McLister said.

The good news, though, is that borrowers who need a mortgage within 120 days can lock in a guaranteed rate, he added.

If you’re mortgage is up in the next four months, you should lock-in “tout suite,” according to McLister.

If you’re worried about rising rates, another option is to renew your mortgage before the end of your term.

That, though, comes with a penalty, Laird noted. If you’re considering renewing early, make sure to weigh the trade off between paying those added costs and your expected savings from being able to clinch a lower rate — and note that those calculations will be based on your forecast of how much higher rates will go at your renewal rate.

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