CategoryMortgage 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 June 21, 2016 Mortgage News

New record low fixed rates… how low can they go?

5 yr fixed rates just got better. With last weeks U.S. Fed chair, Janet Yellen, saying these low rates are the ‘new normal’, the markets reacted.

Bond yields are down and that has moved fixed rates lower. The best full featured, no handcuffs 5 yr fixed rate is 2.49% (yes, some fast closing specials exist but 2.49% is the best today). (oh, by the way, Yellen wasn’t the first govt rep to say this. Our own Senior Deputy Governor for the Bank of Canada, Carolyn Wilkins, said this 2 yrs ago.. Go Canada!)

Hard to believe they keep going lower. Does that mean we should jump into a 5 yr fixed? For some, yes. But for many of us, no. For over a decade, I’ve recommended Variable rate or a short term priced products. History has proven that short term priced products result in lower cost to the borrower.

However, there is something to be said for peace of mind. Many of us want to set it and forget it. For those that can’t sleep at night or for those that are borrowing to invest, then perhaps, 5 yr fixed makes sense.

If you really want to know what’s best for you and your situation, you must speak with an unbiased mortgage professional. A Mortgage Broker doesn’t work for any one Bank. They work for you. They will give you unbiased, neutral advice and they can offer hundreds of different products.

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 January 11, 20163 Comments Mortgage Rates

US Fed rate hike doesn’t mean Bank of Cda rate hike!

Last month, the US Fed Reserve Bank Chairperson, Janet Yellen, raised rates for the first time since 2006. Historically, Canada follows the US with rate movement.. However, times are changing…Don’t expect Canada to follow the US move anytime soon.

Divergence. That’s the new buzz-word. Bank of Cda Govr, Stephen Poloz said, “Usually you think of the Canadian economy following the U.S. economy fairly closely. This will be one of those places where it really doesn’t.” “But as a macro statement, there will a divergence there. We’re already seeing it, and so you should expect a divergence in policy too,” he said. Continue reading “US Fed rate hike doesn’t mean Bank of Cda rate hike!”

Posted November 24, 20154 Comments Interest rates

Mortgage rates went up…. but why? And will they continue to go up?

A month ago, I said Fixed mortgage rates probably hit the bottom. A week later, fixed mortgage rates started to go up… around 0.20% over the past 3 weeks. Variable rate mortgage pricing has gone from Prime less 0.65% to Prime less Prime less 0.40%.

Now, here’s the thing…. I don’t think rates will skyrocket over the next 6 or 12 months, like the pessimists would have you believe. I think mortgage rates hit the bottom….BUT, they probably won’t go up very quickly.

In fact, the forecast now is for the Bank of Canada rate to stay the same until 2017. This is just another example of how the world has become a smaller place. If someone sneezes in Germany, we catch a cold. With most of the global economies just getting by, there isn’t much reason for mortgage rates to go crazy. They should remain low.

The key driver for rates going up recently is nothing more than profit taking. Banks have had a great year… In case you didn’t know. That’s right.. we seem to forget that 2015 was one of the best years on record for real estate and mortgage volume… and house prices have never been higher. Funny how that seems to get lost in the media reports.

Look for Variable rate pricing to fall in the new year… Fixed rates could also come down slightly, but don’t count on them hitting the record lows that we saw this summer. Hey, that’s not to say rates are bad. We are still well under 3.00%. These are ridiculously low mortgage rates. Enjoy them while you can.

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