Looking ahead to 2015 rates and trends

 Seasons Greetings!  Happy New Year!   Quick thank you for making 2014 a great year!  Hope yours was just as special.  And I’m wishing you much success and happiness in 2015.

I’ll make this quick as I’m sure you have some New Year’s Eve celebrations to attend to.

QUICK YEAR IN REVIEW.

• Interest rates haven’t really changed this year.
• 5 yr fixed rates are under 3.00%.
• Variable rate pricing improved to around Prime less 0.60% (less in some cases and dropping).
•   In fact, looking at the big picture, interest rates haven’t really changed much in the last 4 yrs.   Yet, you wouldn’t know it by reading the newspaper headlines….(sorry to my media friends…)

Let’s get to it.  MY THOUGHTS ON 2015.

• Interest rates are forecast to remain low in 2015…  and probably into 2016.
• House prices will be flat.  No real spikes expected… According to CMHC , house prices will remain unchanged.. some possible appreciation.  According to Bank of Canada there is no house price collapse expected.
• Mortgage product trends… Look for lower priced Variable rate products.
• If bond yields continue to hover in the 1.40% range, we will see 5 yr fixed rates also drop further.
• Beware NO FRILLS products… we are seeing more of these products… be careful…  these are dangerous and costly products.. seek independent, FREE professional help.. Speak with an experienced Mortgage Broker.
• We don’t expect any new mortgage rule changes in 2015… Hooray!..  Leave it alone Fed govt.   You’ve made so many changes already.. let it play out…  In fact, I’m calling and predicting that the Fed govt will backtrack some of their rule changes in the future…   They went overboard.   Bringing me to my next point….
• More Canadians will be forced to deal with secondary lenders with higher rates.   The mortgage rule changes won’t stop Canadians from buying and financing properties.. They are only making it more expensive..  (buy some stock in secondary financial institutions…seriously!! ).
• Some of the BIG SIX BANKS are referring declined mortgage applicants directly to secondary lenders… and their getting paid a fee to do this..   This will continue and grow…. but it’s concerning because it raises the question about motivation, profit and a client’s best interest…  the BANKS aren’t required to provide the same disclosure as Mortgage Brokers… this will probably get tested in the future.
• Debt consolidation has become a dirty word, but the reality is that it’s not.  It makes sense to pay less interest.  (sounds obvious, huh?)   Don’t fall into the trap of NOT consolidating higher interest rate loans, credit cards, lines of credit, etc.   The smart move is to pay less interest..  consult an experienced Mortgage Broker for advice on this.
• Oh, how can I forget…  we’ll continue to hear ‘Record personal debt levels’… ‘Interest rate hike fears’….’housing bubble fears’… ‘inflation concerns’…. ‘housing affordability issues’…   (what am I missing?  I’m sure there’s more to worry about?… but you get my point)

My message to consumers, to those that are concerned and unsure is this.   Continue to analyze.   It’s good to be somewhat cautious.  Stay informed.  Seek out credible, professional advice.  But stay away from hype.  If you can do this, you will be fine.

Set goals… chase your dream.  Not doing something because of unknown fears won’t get you anywhere in life.  If you have a question, get answers.  Knowledge will help guide you…     Speak with trusted advisors.   Seek out people that help you…

Cheers and all my best… safe travels!

Happy Holidays!

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca