CategoryMortgage News

Posted July 9, 2013 Interest rates

Time to look at Variable Rates again.

With fixed rates up around 0.60% over the last 4 weeks (currently at around 3.49%.. there are some lower rates but these come with conditions so we are using the more widely available rate) we must again take a look at Variable rates. Today’s best Variable rate product is sitting at around Prime less 0.40% … there’s even a few promotional Variables at Prime less 0.50% for qualified applicants. But for this article we will stick with Prime less 0.40%. That’s 2.60% today. We are almost at that 1.00% spread that I like to see.

Two years ago, the best Variable rate was at Prime less 0.75% with the option to lock into the BEST discounted fixed rate at any time (this option is important, don’t ever settle for a variable product that doesn’t have this clause). And 5 years ago, we had Variable rate products as low at Prime less 0.90%. Continue reading “Time to look at Variable Rates again.”

Posted July 4, 20132 Comments Interest rates

Banks maximizing mortgage penalties again… but there’s a bright side..

In case you haven’t heard, Fixed rates are up around 0.50% over the last 3 weeks. But the Banks haven’t increased their posted rates… How can that be?? And how does that affect you?

The BIG SIX BANKS have played the rate guessing game for as long as I can remember.. This time, they’ve added another twist to ensure you will be paying those inflated penalties even longer.. By not increasing the posted rates, they ensure themselves any existing BANK customer will pay the same inflated penalties.

Look back to 5 years ago when fixed rate discounts we around 1.10% off Bank posted rates.. Now fast forward to May 2013. Rate discounts reached an all-time high of 2.25%. And whether it was by design or not, this inflated your penalty by the same margin. (I’ll let you decide if this is just good old BANK luck… yeah, right.) Continue reading “Banks maximizing mortgage penalties again… but there’s a bright side..”

Posted June 20, 2013 Interest rates

When the U.S. sneezes, Canada gets a cold… I’m getting the sniffles…mortgage rates are headed up.

Yesterday, the U.S. Fed Chairman, Ben Bernanke, announced he ‘could’ start to ease their stimulation of the economy later this year. That small announcement has had a huge impact on the global stock markets and bond yields. Stock Markets are down around 2.00% around the world as of 2.30pm today.

The U.S. has been buying around $85billion worth of bonds every month in an attempt to keep interest rates low. And with that simple announcement yesterday, the world’s markets have reacted. Bond yields have started to climb…

Our own 5 yr Govt of Cda bond yield is up to 1.75%. That’s up around 10bps from yesterday, and up 60bps from the beginning of May. In fact, we haven’t seen these levels since October 2011 and again in March 2012. We already received warnings from our Lenders that wholesale mortgage rates are likely to go up. Remember, bond yields affect Fixed mortgage rates.. but they will have an indirect affect on Variable rates, too. Continue reading “When the U.S. sneezes, Canada gets a cold… I’m getting the sniffles…mortgage rates are headed up.”

Posted June 4, 2013 Bank News

Poloz in, Carney out as Bank of Canada Governor…3 major changes in less than a year!! Anyone else find this strange??!.

Stephen Poloz was announced as Mark Carney’s replacement as the new Bank of Canada Governor. The announcement was a surprise for many… Most thought the Deputy Governor, Tiff Macklem, would have been a more likely candidate. But Jim Flaherty, Minister of Finance, chose Poloz…. probably because he shares the same vision as Flaherty… tighter lending rules, higher rates.. etc..

But this article isn’t about why Poloz is in, and Macklem is out. I want to bring something else to your attention. Did you know that we have had 3 major changes in less than 6 months? Mark Carney is leaving Canada to head the Bank of England. Then, within 6 months, the head of OSFI, Julie Dickson, announced she will be leaving in 2014. And now Karen Kinsley, CEO of CMHC, has announced she is stepping down. I’ll add in a fourth.. Robert P. Kelly has come in as Chairperson of CMHC… You’ll need to read this to understand why this is relevant.

These are major changes folks. OSFI, CMHC and the Bank of Canada Governor. 3 major players that run and regulate Canada’s Financial and Banking sectors. Has anyone asked why they are all leaving now? Continue reading “Poloz in, Carney out as Bank of Canada Governor…3 major changes in less than a year!! Anyone else find this strange??!.”

Posted June 3, 20132 Comments Bank News

CMHC CEO Karen Kinsley out, Wall Street banker Robert Kelly in… anybody asking why??

Karen Kinsley has been with CMHC (Canada Mortgage and Housing Corporation) for 25 years. The last 10 as it’s CEO. CMHC makes buying a home more affordable by insuring the mortgage against default. End result is a lower down payment requirement and lower interest rates. CMHC is profitable. They earned $1.7 billion in 2012 and $17 billion over the last 10 years.

In 2012, the Federal govt and the Minister of Finance decided to move CMHC under OSFI (Office of the Superintendent of Financial Institutions). OSFI is a regulatory body that provides regulation and supervision to 152 Banks, Trust companies and other Lenders. They function like auditors. A move questioned by many and one that contradicts the spirit of what CMHC is supposed to stand for.

Enter Robert P. Kelly. Mr. Kelly was appointed as Chairperson of the Board of Directors of CMHC this same month. Coincidence? Here’s a bit of history on Kelly….He worked at TD Bank from 1981 to 2000 leaving as a senior executive that was on the short list to be TD’s CEO.. he didn’t get the job and left for the U.S. to join Wachovia, then later Bank of New York Mellon as CEO and Chairman. I remember Mr. Kelly from my days working at TD. He was always a higher profile, more visible executive… Continue reading “CMHC CEO Karen Kinsley out, Wall Street banker Robert Kelly in… anybody asking why??”