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CategoryMortgage News

Posted Consumer Debt

Bank of Canada rate up by 0.25% and personal debt levels down.

BANK OF CANADA RATE UP

July 20th, 2010….an interesting day.  This was the 5th of 8 scheduled Key Interest Rate announcements… No real surprises… the Key rate went up by 0.25%…. the second increase this year…

The new Bank Prime rate is now 2.75%.    Variable rate borrowers will see a 0.25% increase in their mortgage rate… but don’t feel too bad… your mortgage is probably just over 2.00%….. that’s much lower than even the lowest 5 year fixed rate mortgage of 3.69% which was being offered mid last year….and recent reports are calling for a very slow and gradual interest rate hike…click here for the latest.

PERSONAL DEBT LEVEL DOWN

Remember the reports about the high personal debt levels that Canadians had?  We were spending like fools… according to many “Experts”… And bank on May 13, I questioned these reports….

Now we are seeing that Canadian Personal Debt levels are down….Come on… we didn’t change overnight.. we  have just been taking advantage of these record low rates to invest or spend wisely…and what’s wrong with that?..  see the latest stats…


Posted Mortgage News

Does this ad make you laugh or get you mad?

In February, the Federal government announced many changes to tighten mortgage lending policies to ensure Canadians don’t get in over their head when it comes to mortgages.. they also promised to STANDARDIZE Mortgage Penalties…  well, we have not seen or heard anything about it… Come on Feds, make the change…   Canadians need your help..

Last week someone sent me this mobile pic from just outside a Scotiabank branch..  We couldn’t help but find the ad amusing…  In case you can’t read it.. “Penalty & fees have you  upset?  No respect? Get service and advice worth switching for”.…

Well Scotiabank, speaking on behalf of all Canadian borrowers for just a minute, the answer is YES… we are upset.. so what are you going to do about it?

Pause… wait… I don’ t hear anything…  Just what I thought.. nothing..

We found the arrogance disturbing.  Scotiabank is no different than any of the other major bank when it comes to calculating their prepayment penalties…and in fact, I have more than a few clients that will get quite upset after seeing this.

You see, they are part of a long list of Mortgage Borrowers that found out, the hard way, that mortgage prepayment penalties can be extremely high… 6%, 7% and sometimes 10% of the outstanding mortgage balance…  Here’s a good example from a Bank of Montreal client… this article was written in Ellen Roseman’s Blog…   Her reader is quoting a $30,000 penalty on a $360,000 mortgage with 2 years remaining…

Think you are immune?  Well, if you are in a fixed rate mortgage, then I’ve got news for you.. you are susceptible to the same outrageous penalties if you take any fixed rate mortgage.    The Banks are selling 5 year Fixed rate mortgages as getting ‘peace of mind’ and protection from potential rate increases….   And yet, study after study has proven that SHORT term and VARIABLE rate mortgages outperform any fixed rate..

Make an informed decision, stay alert and make sure you know what you are getting into when choosing a FIXED rate mortgage…  Feel free to contact me anytime for my advice or opinions.

Posted Mortgage News

Are you one of these people?

Was reading this survey about First Time Home Buyers that TD Canada Trust did recently...

Thought the most interesting stat was that 3/4 of the people surveyed were opting for a Fixed Rate mortgage.   And in the same paragraph, the TD rep acknowledged that Variable Rate mortgages performed better… Does any of this sound familiar?

Here’s some more good news.. well, actually it’s bad news for the Stock Market and investor confidence but it’s good news for interest rates… The 5 year Canada Bond has dropped significantly…  We were at 2.33% at one point today… meaning 5 year fixed mortgage rates should really be hovering around 3.80%… but instead we are seeing best rates at around 4.29%…   WHY?  Pure profit taking by the Banks…

But don’t fret…this uncertainty means there is less chance for rates to increase and less chance they will increase significantly…. And for those in a Variable rate, rates of 3.80% and 4.29% are still too high….  Variable rate mortgage clients are enjoying 2.00% or better…   Enjoy the summer!

Posted Mortgage News

More reckless Lending by BMO and RBC

There were 2 reports recently that made me kind of laugh…..  You may have seen the recent report about Bank of Montreal bringing formal charges for mortgage fraud against hundreds of people… including bank staff, appraisers, lawyers and mortgage brokers…

Well, last week there was a report about the BC government blasting RBC and BMO for their loose lending practices when it came to granting mortgages…they called them ‘willfully blind’ and ‘reckless’.

This week, we see a report about RBC receiving an award for Creditor of the Year award from the Credit Counselling Canada.  They won the award for ‘thinking outside the box’…  Well, they sure did think outside the box in BC…

Posted Mortgage News

2010 CMHC Survey shows Mortgage Broker share is stable

45% of First Time homebuyer’s said they would seek advice from a Mortgage Broker… according to the CMHC’s Mortgage Consumer Survey.

The study also found that internet usage was on the rise…no surprise there… 69% of First time buyers…

And 92% agree that Home ownership was a good, long-term investment.

68% of recent Homebuyer’s believe they will pay off their mortgage sooner than their current amortization.

All this adds up to a high level of confidence in our Housing market…   Enjoy those low interest rates…