Quoting rates isn’t straightforward anymore. Your final rate is based on your credit score, purchase price or home value (homes over $1 million purchased after Oct 17, 2016 have higher rates), the loan to value (mortgages under 65% LTV and above 80% LTV get best rates), location, job type and income confirmation documents.
That’s right… ALL these factors will determine your interest rate!
Today, there’s a great variable rate available at Prime minus 1.09%. That translates to 2.39%. This is a real rate… it’s not a bait-and-switch ad like so many rate-comparison sites are quoting these days.
Continue reading “Prime minus 1.09%… Yes, this is a record-low Variable Rate!”
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”
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!”
Yesterday, Bank of Canada (BoC) Governor, Stephen Poloz, left rates unchanged. This kept the bank prime rate at 3.45%.
This also, indirectly, affects fixed mortgage rates. Great news for anyone with a mortgage. Go ahead, it’s okay to feel good about paying a low interest rate on what’s probably the biggest debt of your life!
ARE ECONOMISTS RIGHT?
For months we’ve heard economists forecasting 2-4 BoC rate hikes for 2018. So far, we’ve had one increase – in January. Should we be expecting three more increases? Only time will tell, since the BoC raises its rate when inflation rises above the target inflation rate… currently the range is between 1% and 3%, and sits at an acceptable 2.10%. Some believe inflation has increased temporarily, in part, due to increased minimum wage.
Continue reading “Got a mortgage? Good news: Bank of Canada didn’t raise rates yesterday!”
When it comes to mortgages, $100 isn’t going to get you very far. But what if you paid an extra $100 a month towards your mortgage? It’s not a lot of money these days, but it can add up to some solid savings over time.
Let’s look at a $300,000 mortgage with a 2.89% rate and a 25-year amortization. At the end of five years, you’ve paid off an extra $6,444. The balance owing is $249,435. And the remaining amortization is 17 years and 9 months instead of 20 years. This also represents an interest savings of $11,423 over the life of the mortgage. Not bad!
Now let’s look at paying an extra $200 per month. At the end of five years, you’ve paid off an extra $12,888. The balance owing is $242,991. And the remaining amortization is 15 years and 11 months. This represents an interest savings of $20,708 over the life of the mortgage! Continue reading “How can an extra $100 boost your mortgage?”