An update on mortgage interest rates from my colleague Pauline

 

To learn more about Pauline please click on her picture:

 

Pauline Tonkin

 

Last week there was news that the banks had dropped their fixed rates.  In fact they were simply reducing their rates to match those of non-bank lenders which have been in place since last fall.

 

5 year fixed rates now settling around 3.35% or a bit lower but some lenders still around 3.39% or higher.  So there is a spread and different rates available depending on the client application.  If we have business for self or rental income we can be competitive with options they may not be able to get with their current lender--- always good to have options for your clients.

 

On the variable rate side we have seen an increase on discounts to P-.55% and may see that go a bit lower still.

 

For clients who have trouble qualifying but have sufficient down payment--- we are seeing very solid rates on the B side lending around the mid 4% range which is really great.

 

As always, I am happy to talk to any clients who need to understand their financing options.  Take care and have a great week!

 

 

 

Till next time ...

 

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Providing you with useful mortgage information is something I like to be able to do for you.

 

Here is an article from the Globe and Mail online that I just had to share with you. 

 

"When it comes to interest rates, most of the attention is on the Bank of Canada’s overnight rate, which governs short-term lending. But it’s long-term fixed income rates that have the most affect on people’s wealth. Rising five-year, 10-year and 30-year yields impact everything from mortgage rates to portfolio returns.

 

Unlike the overnight rate, which the Bank of Canada is responsible for moving, the long-term rates shift based on what’s happening around the world."

 

Many people still think that the lowest rate is the best deal.  That is not always the case.  Getting the best mortgage deal that fits you and your lifestyle is a very delicate business and should be dealt with by a professional. 

 

If you are in need of a mortgage professional I have a few that I like to recommend, so please don't hesitate to ask me.

 

Till next time ...

 

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Re-blogged from CanadianRealEstateMagazine.ca:


The big banks have all weighed in on the housing market following CREA’s monthly report and finally there is consensus.


“We believe that much of the strength in recent months reflected the unwinding of earlier restraint associated with the tightening of mortgage insurance rules last year and, in August, a likely rush to lock-in lower mortgage rates,” an RBC report stated. “We expect home re-sales to stabilize near the current levels, although some modest pullback may occur later this year or early next as payback for sales that may have been advanced during the rush to lock-in lower rates.”

 

 

The Canadian housing market recorded a hot summer, with many clients rushing the market to cash in on pre-approvals before rate hikes took effect.

 

 “The recent increase in 5-year mortgage rates (of about 70 basis points) that began in June of this year will likely temper housing activity in the coming months,” a report issued by TD Bank stated. “In large part, some of the strength experienced over the summer months can likely be attributed to households jumping into the market to get ahead of interest rate increases and we anticipate some payback in the coming months.”

 

And the banks agree that homebuyers will still take advantage of low rates before the market cools once those pre-approvals dry up.

 

 “Buyers continue to taking advantage of low borrowing costs, though recent increases in fixed mortgage rates are expected to slow the housing market’s momentum later this year and into 2014,” according to a report issued by ScotiaBank. “With posted rates having bottomed around late spring, the window of ultra-low preapproved mortgages is expiring.”

 

And while the days of historically low interest rates may be behind us, TD Bank believes rates will stay low enough to encourage slight growth through next year.

 

However, mortgages rates at all maturities remain historically low, keeping affordability decent and supporting modest growth in both sales and prices until the end of 2014 when the Bank of Canada starts lifting short term interest rates.

 

 

 

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I received some great information on Preparing for Rising Mortgage Rates, and wanted to pass that on to you today, and also to thank Christopher Collins for this great information! You can find out more about Christopher here.

 

Christopher reports:

 

"The interest rate party for borrowers is almost over. Following almost five years of historically low rates, we’ve started to see some upward movement in the cost of money.

 

Most people watch the central banks for indications that rates are about to take off. But that’s not where the real action is for fixed-rate mortgage holders. This actually takes place in the rarefied world of the bond market, where institutional traders like banks and pension plans operate. By the time the Bank of Canada gets around to acting, the bond market will have left it in the dust.

 

In order to save as much money as possible, a proactive approach is recommended when dealing with rising interest rates:

 

1.     Budget for future plans. Many borrowers opt for the maximum mortgage for which they can qualify. The problem with this approach is that life happens. It’s important to plan ahead for future changes such as starting a family, maternity leave, relationship changes, health issues, career changes, and so on.

 

2.     Ensure you would still qualify for your mortgage if rates continue to increase. For instance, if the five-year rate reached 5.2%, could you still afford the payment? We can sit down and run the numbers to ensure we build a buffer zone into your mortgage.

 

3.     Use your prepayment options. This will enable you to increase your payment in relation to the increased rate. For instance, if you have a five-year fixed mortgage at 2.89% and rates increase to 3.49%, increase your monthly (or bi-weekly) payment to the equivalent. That way, you won’t experience “rate shock” when your mortgage is up for renewal. It’s important to remember that any extra payments you can make will go straight towards paying down your principal faster, which means you will be mortgage-free quicker!

 

It may be worth your while to take advantage of a free mortgage check-up before rates increase any further. This will help you determine if it makes sense, for instance, to renew your mortgage a few months early if this means being able to lock in to a new five-year term before rates increase even more.

 

With rates on the rise, it’s more important than ever to take advantage of mortgage brokering services, since we can shop different lenders and advise which ones not only have the best rates, but also which lenders have the best prepayment options and mortgage offerings to suit your individual needs."

 

Do you have any questions for Christopher?  Please contact him here.

 

 

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First-time home buyers warned of possible mortgage hikes.

 

BMO predicts mortgage rate hikes in second half of 2014.

 

 

According to BMO’s First-Time Home Buyer’s Report, one-third of first-time buyers (31 per cent) expect interest rates to stay the same over the next five years. However, these first-time buyers may need to reconsider their outlook.

 

BMO Economics projects the Bank of Canada will raise its overnight lending rate in the second half of 2014.

"The Bank of Canada has made no changes to its policy bias," said Doug Porter, Chief Economist, BMO Capital Markets. "With Canadians’ debt-to-income ratio poised to stabilize in the months ahead and the housing sector cooling, we continue to look for a rate hike during the second half of 2014. Even so, other interest rates, such as longer-term mortgage rates, can rise well ahead of the Bank of Canada."

 
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With recent fluctuation in home loan rates, it is important to make sure you still have the best loan and rate for your budget needs. A half a percent off your home loan rate could save you as much as $50,000! (based on a $500,000 loan)

 

On my blog I provide a mortgage calculator that looks like this:

 

 

You can access it by clicking here.

 

I want to make sure you are not ONLY in the house of your dreams, but in the best budget for you that is possible!

 

Till next time ...

 

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Can you Believe these Mortgage Rates?!

 

5 year 2.89% mortgage with NO restrictions!! 

 

It is an awesome time to purchase! 

 

If you are paying more than 4% it's time to consider making the move!

 

I am always on the lookout to help those looking for a change; a move or an improvement in their financial situation [using real estate] and when I came across this statement I just HAD to share it with you!

 

There is a great website, called RateSupermarket.ca, that gives the most up-to-date rate information for today's Canadian real estate shopper.  Check it out here.

 

Let's not only get you THE HOME OF YOUR DREAMS but at the VERY BEST RATE POSSIBLE!!

 

Time to go shopping soon! Smile

 

 

 

 


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