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Why Did the Bank of Canada Raise Rates Last Week?!

Canada Mortgage rate 20180509

Last Wednesday, the Bank of Canada (BoC) raised its overnight target rate to 1.5% – up from 1.25%. This is the fourth increase since last June, when the target rate was 0.5%.

The timing is suspect to me. Last year, we had an increase around this time, but that was coming off of the hottest housing market in 29 years. We’re currently on the heels of a brutally slow spring market, yet rates are still rising? I don’t get it… this is a poor decision, in my opinion.

When it comes to four rate increases in the past year, there are facts, realities and perceptions that come into play… Continue reading “Why Did the Bank of Canada Raise Rates Last Week?!”

Record-Low Variable Rate Wars EXPIRE THURSDAY… Don’t miss out!

Don't Miss Deadline

The incredible variable rate wars we’re seeing this month are about to come to a close! It would be a shame to miss out on these savings! And, while there is a possibility that they’ll extend into June, I wouldn’t risk it – deep savings like these don’t come around every day! In fact, I’ve never seen advertised variable rates this low!

If your mortgage is coming up for renewal soon – or, even if it’s not – it’s worth a call to your mortgage broker to discuss the possible savings. The math speaks for itself…

Continue reading “Record-Low Variable Rate Wars EXPIRE THURSDAY… Don’t miss out!”

And the Variable Rate price wars begin… Here’s how you can benefit!

Variable Discounts Image, May 2018In order to fully understand how to take advantage of record-low variable rates, it’s important to learn some mortgage history.

BMO came out swinging first a week ago with a variable rate of Prime minus 1.00%. Historically, when a BIG SIX BANK comes out with a huge price decrease, it’s only for a very short time – likely 2-3 weeks. But, during that time, they can gain massive volumes and satisfy their market share requirements from the average borrower.

With all the talk of interest rates going up, this is welcome news for borrowers. Last week, I wrote about Variable rates at Prime minus 1.09%. This week, the banks have caught on.

Continue reading “And the Variable Rate price wars begin… Here’s how you can benefit!”

TD & RBC raised the POSTED rate… but not their REAL rates

Rate Image, May 2018

Much has been written about last week’s Posted rate hikes by TD and RBC. Don’t panic! This is just their posted rate – it’s not the actual rate they give to clients.

I do, however, think we’ll see a minimal rate hike in the coming weeks due to five-year Government of Canada bond yields increasing slightly. Fixed rates are priced closely to bond yields.

Continue reading “TD & RBC raised the POSTED rate… but not their REAL rates”

Mortgage Penalties: You could pay thousands to break your mortgage depending on your lender!

Young family discussing family finances

I originally posted a breakdown of how mortgage penalties are calculated by different lenders on January 4, 2011.

This remains relevant today and, since this has been my most popular article to date, it’s worth a repost!

WE TOOK THE MYSTERY OUT OF HOW PENALTIES ARE CALCULATED

We decided this needed a more detailed explanation… but a strange thing happened when we started to answer these questions. We made a startling discovery. We caution you – the results could get your blood boiling if you’ve had to pay a penalty!

We found that the banks have shrunk or reduced the spreads between their Posted and Discounted rates on shorter-term mortgages over the past few years… and this has had a huge impact on Interest Rate Differential (IRD) penalty calculations. Continue reading “Mortgage Penalties: You could pay thousands to break your mortgage depending on your lender!”

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