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MonthJune 2017

Mortgage rates going up a little.. for now. What should you do?

Happy 150th Canada!  Mortgage rates are going up.  Hooray!  Ok, yes, I’m being sarcastic.

This isn’t the cheery message you wanna hear if you have a mortgage coming up for renewal soon. But, hold on.  What does this really mean?  It’s a great attention grabber.  And now that you’re reading, let’s cut through the bull!

It’s true.  Wholesale fixed mortgage rates have gone up.. around 0.15%.  Yup, that’s it.  Yet, reading all the media headlines would make you believe mortgage rates went up 1.00% or something like that!!   This just isn’t the case.   And Variable rates haven’t changed as of yet.. Mind you, we could see an increase of 0.25% on July 12.. That’s still putting most Variable rate borrowers at 2.25% and 2.40%.. That’s a ridiculously low rate.

Here’s what’s happening…We’ve seen the media take little snippets of the Bank of Canada Governor, Mr. Stephen Poloz’s comments and turn them into front page headlines.  Great for headlines but short of full disclosure.  Here’s a more complete picture. Continue reading “Mortgage rates going up a little.. for now. What should you do?”

Bank of Canada hints of rates hikes.. bond yields spike up

Bank of Canada Senior Deputy governor, Carolyn Wilkins, made headlines this week when she hinted of pending rate hikes.

The reaction by investors was swift.  Bond yields were up 20bps. Fixed mortgage rates are priced from Gov of Cda bond yields.  Variable mortgage rates are priced from Bank of Canada rate.  And the next Bank of Canada meeting is scheduled for July 12th, the fifth of eight scheduled meetings.  Many are betting we could see a rate hike then.

DON’T PANIC…. RATES ARE STILL RIDICULOUSLY LOW…   The media was quick to find ‘so-called’ experts to quote.  I’ve seen some saying we should all lock in our variable rate mortgages into fixed rate products.  And others say you should brace yourself for payment shock.

Here’s a reality check..   Variable rate mortgage are around 2.20% .. Some are higher, some are lower..    EVERY Canadian must qualify for a Variable rate, using the POSTED 5 year fixed bank rate.  That rate has been at or near 4.64% for several years.

If rates go up, we can expect a slow gradual increase..  around 0.25% at at time.  And here’s the thing..If you can qualify at 4.64%, what makes you think you can’t afford your mortgage at 2.45% or 2.70%??

The sky isn’t falling.   Many Canadians are already paying more than they have to by increasing their regular payments to accelerate the amortization and retire their debt sooner.  In fact, most of my clients are doing this because they can.   Don’t believe everything you hear or read in the media…  We are experiencing record low interest rates and yet, we’re made to feel like it’s a horrible time to have a mortgage..  Anyone else seeing something wrong with this?

By the way, I still like Variable rate mortgages today.

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

Time to stand up for Home Trust and Home Capital

Home Trust and it’s parent company, Home Capital, have been in the headlines for months.  Taking a beating in the media with US short sellers licking their chops waiting for them to fall… all for the sake of making a buck.

Finally, the Ontario Securities Commission has come out and made a statement.

Proposed fines and a settlement of around $30million will be levied against Home Capital and former executives for supposed misleading statements.  I say ‘supposed’ as there has been very little proof provided by anyone to suggest they was any misleading going on.


There is actually more evidence of misleading statements by US vulture investors that have by trying to discredit Home Capital and their senior management via social media blasts.    The goal was to short the stock.   The goal was to see the stock price plummet and drop using conjured up hype and fear mongering.   The power of social media is dangerous.

Comparisons with the 2008 US sub-prime crisis.  Supposed non-disclosure of a handful of supposed fraudulent mortgage brokers (only 45 out of several thousand) that supposedly submitted false income documents to get mortgages approved.

Now, here’s the strange part.. All but 2 of those supposed crooked brokers were penalized by the governing Provincial regulator..  That’s right, only 2!!  And the fines were miniscule.

If this was as serious as we are made to believe, why wouldn’t there more severe action?  Why wouldn’t more brokers be reprimanded?  Why didn’t we see more more action?


It’s not like Home Trust was hiding anything. They discovered some mortgage applications were submitted with fraudulent information and documentation.  They investigated to ensure the allegations were true. Once discovered, they announced the findings.    IMPORTANT.. there has been no loss from any of those mortgages.. NONE!

Perhaps this wasn’t as big a problem as we were lead to believe?    $30million in fines and settlements is a lot of money but it’s nothing compared to $2billion loss in the stock value of the corporation.  The best thing that could have happened was a quick settlement.  Move on, as they say.

And why would the OSC announce this settlement now, when it won’t come into effect until August 9th?  This is highly irregular.  If Home Capital did so much harm and was so deceitful, why would the OSC let them off the hook with a token fine and announce it months ahead of settlement approval hearing?

This isn’t sounding right.  The pieces just don’t fit.

There was a great article written about the Home Capital witch hunt.  I suggest you take a minute and read it. click here to read the article.

The OSC was quick to throw Home Capital under the bus.  For what purpose or reason?  I sure would like to know.. We may never know what really prompted the OSC to announce their investigation and then just as quickly, announce a settlement.

It stinks.  And it’s really too bad.  Home Trust has served a huge segment of the Canadian population with their financing options.  In recent months, other Lenders have struggled to keep up with demand.  Rates and fees have increased, making it far more expensive for consumers to finance their residential and commercial properties.

We can only hope that this will pass quickly.  With all the recent govt intervention with tighter mortgage rules, 15% foreign buyers tax, new rent control rules,  and looming rate hikes, we will need Lenders like Home Trust.  They are a far better alternative to Private lenders or Mortgage Investment Corporations where interest rates are in the 10% to 18% range plus fees.   I’m not sure how this witch hunt helps the Canadian consumer?   We need Lenders like Home Trust.  They fill a big gap for consumers.

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

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