CategoryInterest rates

Posted July 15, 2016 Interest rates

Mortgage Brief…Bank of Canada doesn’t change rate..

This week, the Bank of Canada Governor, Stephen Poloz, held rates steady. No increase or decrease. click here for BoC report.

The Bank of Canada meets 8 times a year, at preset meeting dates. The Target Rate is used by Canadian Banks to set their Prime rate. This also affects Variable rate mortgages and even influences short term rates.

Bad news is good news for mortgage rates. Inflation is under 2% (well below the 3% max that is needed before rates climb).. And the Canadian economic outlook is still not strong enough to support a potential rate increase.

So, for now, enjoy the low rates… actually, they’ll probably be around for a lot longer..

Remember, we are experiencing record low rates.. but this doesn’t mean we should all jump into a 5 yr fixed rate product.. We all have different wants, needs and goals.. Speak with a Mortgage Broker to get professional advice.

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

Posted May 31, 2016 Interest rates

Should you look at 10 year fixed rate mortgages?

Today, right now, we are experiencing all-time record low fixed mortgage rates. Great news if you need a mortgage. And some of you may be thinking of locking into a longer term mortgage. Let’s take a look at that option.

Going longer could be an option for some. The Best 5 yr fixed is around 2.59%.. some special deals exist for larger mortgages or faster closings… but let’s use 2.59% for now. Does it make sense to pay 0.30% more for the first 3 years of your mortgage, just for the benefit of knowing what your rate will be for the last 2 years?

(a warning… you’ll see lower rates advertised.. but be careful. There are so many NO FRILLS products or products that carry inflated penalty calculations, limited repayment options and other hidden fees.. stay away from those)

Continue reading “Should you look at 10 year fixed rate mortgages?”

Posted May 26, 2016 Debt

I have 2.39% for 5 yrs fixed available…but I wont sell it.

It’s true. I have access to this great rate. It’s around 0.20% lower than the best rate today. And you won’t see me recommending it to my clients.

That’s right, I’m recommending they don’t take it.

Why? It’s simple. No, I don’t want my clients paying more on their mortgage. I want to see them PAY LESS to own their homes. This is one of those products that carries an inflated prepayment penalty. Should the homeowner need to get out of their mortgage early, they will be hammered with a ridiculous exit cost. We’re talking 10, 12, even 16 months worth of interest penalty.

Statistics clearly show we are paying or changing our mortgages every 3 years. So, chances are, you will have to pay this penalty. On a $300,000 mortgage, your penalty could be $9,000 or more. Compared with $1,943. That’s a $7,000 difference.

That 0.20% savings on the rate equals $600 per year.. You still think that 2.39% rate is great??

The next time you hear or see something that sounds too good to be true, it probably is. If you aren’t sure, call me or an experienced Mortgage Broker for unbiased advice.

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

Posted March 30, 20165 Comments Interest rates

Variable rate is out, Fixed rates are in…. But, which term…?

For more than a decade, I’ve been recommending Variable rate mortgages, as the product of choice. My clients have saved $thousands. It’s been a great 11 year run.. But now, the strategy has changed slightly. Read on, to see my newest recommendations..

QUICK VARIABLE RATE HISTORY.

First, you need to understand the history.. Variable rate had lots of pluses. It had a lower rate of interest, the penalty can never go over 3 months interest, and you have the option to lock into a Fixed rate at any time.

Being in a Variable meant paying lower rates. In fact, the difference, compared with Fixed rates, ranged between 1.00% and 3.00%. This translated to several $$thousand in less interest each year. Continue reading “Variable rate is out, Fixed rates are in…. But, which term…?”

Posted December 9, 20151 Comment Interest rates

Negative interest rates by the Bank of Canada… No, not likely.

You gotta love the media. Yesterday, the Bank of Canada Governor gave a speech and announced a change in contingency plans should we fall into another financial crisis… like the US-made global recession in 2008.

But if you read the headlines, you would think the sky has fallen. All I kept seeing were headlines claiming “Canada could see Negative interest rates. Below zero interest rates. Canada would consider negative interest rates… ” Wow, talk about misleading the public.

Okay, so here’s what he really said, and this is straight from the Bank of Canada website…I quote… “We don’t need unconventional policies now, and we don’t expect to use them. However, it’s prudent to be prepared for every eventuality,” Governor Poloz said in a speech today to the Empire Club of Canada.

He went on to say that he believes that our economy is on target to rebound for 2017.. and here’s another direct quote. “The Bank is forecasting increasing annual growth in 2016 and 2017, with the Canadian economy expected to reach full capacity around mid-2017.”

I think this is pretty clear. The ‘worst case scenario’ plan has changed.. and the BOC govr expects our economy to rebound in the next 12 to 18 months. Hope this helps to clarify the message. Keeping it real.. and keeping it simple.

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