CategoryMortgage Products

Posted October 2, 20132 Comments Interest rates

Another US Govt shutdown… could mean lower mortgage rates for Canada.

Remember the U.S. Debt ceiling crisis in the summer of 2011? Panic was an understatement. That story dominated headlines for close to 2 months. Stock markets dropped, but mortgage rates dropped, too. In fact, fixed wholesale mortgage rates dropped 0.50% in the months leading up to the Debt Ceiling deadline, from June to August…. And continued to drop another 0.70% into 2012.

Mortgage rates hit all-time lows in the fall of 2011 and just kept right on dropping. We hit our the all-time low in May 2013 before rates jumped almost 1.00% to our present 3.69%. (This is for 5 year fixed mortgages. Variable rates did not budge… Bank Prime rate has changed since Sept 2010…that’s important to remember as I will explain later) Continue reading “Another US Govt shutdown… could mean lower mortgage rates for Canada.”

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 April 29, 20137 Comments Case study

So-called “Best Rate sites” are put to the test with shocking results.

There’s been a surge of ‘Best Rate’ sites popping up… Chances are, you’ve probably seen one or more of their online ads… You know the ones…‘shopping’ for the Best mortgage rates in Canada’ and ‘comparing Canada’s mortgage brokers for the best rate”. It does sound great… and it seems to be getting lots of attention… Even the media are covering and quoting these sites… And although I like that these sites promote how Mortgage Brokers can offer great rates, I’ve noticed some disturbing trends that you need to watch out for.

“I JUST WANT THE BEST RATE”

You say you want the ‘best rate’? Really? Or do you want to pay the least amount of money on your mortgage? I’ll bet it’s the latter. Make no mistake, these two things are very different and I’ll prove it. But let’s face it, the rate gets everyone’s attention.. Most people don’t want to hear anything beyond that.. until they get burned for $$thousands on the mortgage later on.

Now what if I told you that 80% of my clients were paying a rate of 1.35% during 2009 and 2010, would that get your attention? Of course. And it’s true. 80% of my clients were in a Variable Rate mortgage based on my recommendations….and almost all of them didn’t panic and lock into a fixed rate (like the BIG SIX BANKS wanted them to)…they stayed in those products based on my specific advice recommending they not lock into a Fixed rate…. That’s called being in the right product at the right time. My average client saved $6,000 during that time. Continue reading “So-called “Best Rate sites” are put to the test with shocking results.”

Posted March 5, 2013 Interest rates

BMO’s 2.99% No Frills mortgage is back… and so is our warning to stay away from it!

So you’re shopping for a mortgage… and you see 2.99% advertised by BMO.. and you think, Wow, that’s a great rate!!… but is it really that great? And is it really a great mortgage product?

Well, first, what if I told you there was a lower rate out there? And what if I told you there was a lower rate without the restrictions and limitations of BMO’s NO FRILLS mortgage?

Ok, now that I got your attention, let’s continue…We saw this same product and rate advertised last year, in January 2012. BMO promoted their NO FRILLS, oops, I’m sorry, they want us to call it a ‘low-rate’ mortgage (guess that sounds better). There was a buzz in the air. My phone rang off the hook and my inbox was full of emails asking what this was all about. Continue reading “BMO’s 2.99% No Frills mortgage is back… and so is our warning to stay away from it!”

Posted January 16, 20131 Comment Mortgage News

Scotiabank closes ING Direct mortgage broker division… but who cares?

In an email sent to Mortgage Brokers today, ING announced they will close the Mortgage Broker division February 16, 2013. My first reaction was one of sadness. In the mid 2000’s, ING was a strong Lender and partner with Mortgage Brokers. They offered some great products, competitive pricing, a fair prepayment penalty calculation and had an excellent team of employees, including their senior management.

Yes, I was sad to hear they would close the Broker division… But then I asked myself how much would this affect me? my clients? How much business was I referring to ING these days? The answer soon made me realize that there isn’t any reason for sadness. I soon realized that since they made the switch to registering all their mortgages as a collateral mortgage charge, back in December 2011, I all but completely stopped recommending them to my clients. Continue reading “Scotiabank closes ING Direct mortgage broker division… but who cares?”