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CategoryMortgage Rates

Posted Bank News

Fixed mortgage rates could move up this week.

graph trend up Guess I shouldn’t have talked about the record low interest rates last week…   Today, 2 small lenders increased their fixed mortgage rates and another Lender warned of a potential increase coming sometime this week.  What’s driving the higher rates?   A jump in the 5 year bond yields.  Fixed mortgage rates are directly affected by the Govt of Canada bond yield.

With bond yields jumping 20 basis points in the past 1o days, it’s only logical to assume mortgage rates will go up.   click here to see bond yields.   But hey, with interest rates at record low levels, it’s no reason to panic.  Rates are still great…. if you want to protect yourself against a possible increase, get a rate hold… it’s free and there’s no obligation.   Most Lenders will hold rates for 120 days..

Need help to get a rate hold?  Call me.   I can help.

Your best interest is my only interest.

As always, I welcome your comments, calls and questions.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted Consumer Debt

BMO caves in to Federal govt pressure and raises mortgage rate.

Bmo wide It was bound to happen.  BMO announced their so-called ‘low-rate’ (NO FRILLS) 5 yr fixed rate mortgage would be increasing to 3.09% from 2.99%.   This comes shortly after the Federal Minister of Finance, Jim Flaherty, said that he called BMO and asked them to pull their 2.99% ads.   Last week, the Minister’s office asked Manulife Bank to withdraw their recent ad promoting a similar low rate.  Flaherty i don't know

While, 2.99% isn’t the best rate today, it was the lowest advertised rate from the BIG SIX BANKs.    It was somewhat symbolic.    Of course, Mortgage Brokers have access to even lower rates through the wholesale mortgage market, but these lenders don’t have the deep advertising pockets that BMO or the other BIG SIX BANKs have.   So the publicity surrounding this rate and the increase will get much more air-time.   You can actually find full-featured 5 year mortgages at 2.89% today, through a good mortgage broker (a word of warning.. I’ve seen lower rates offered, and I have access to these products… but these products are not full-featured and come with some limitations that make them less attractive… just be careful when choosing your mortgage and your mortgage broker)… Continue reading “BMO caves in to Federal govt pressure and raises mortgage rate.”

Posted 3 Comments on Canadian Govt doesn’t want you to find the lowest mortgage rate. Consumer Debt

Canadian Govt doesn’t want you to find the lowest mortgage rate.

communism in canada Yesterday, we saw our Federal Minister of Finance, Jim Flaherty, admit to having his office phone up Manulife Financial and ask them to stop advertising their 2.89% 5 year fixed rate mortgage special.  An unprecedented move for a government official…  Yes, it’s true!  But wait, it gets better (or worse).  Flaherty admitted to calling up BMO personally,  to ask them to stop advertising their 2.99% 5 year fixed rate (NO FRILLS mortgage).  click here for the article.

Now, just a comment about these products and rates…. if you are a regular visitor to CanadaMortgageNews.ca then you’ll know the BMO low-rate (or NO FRILLS to be more accurate) is a terrible product with too many restrictions and limitations…  Manulife has a decent product….rate is competitive, however, like most other Bank’s, there is some mystery about what their best rates really are…  so once again, you can’t rely on a website or bank advertising when it comes to finding the best mortgage…a mortgage broker is the best way to get unbiased advice with access to dozens of Lenders. Continue reading “Canadian Govt doesn’t want you to find the lowest mortgage rate.”

Posted Interest rates

Interest rates to stay low for longer than expected…

Mark Carney The, soon to be, ex-Bank of Canada Governor, Mark Carney, is leaving us with a present…  During yesterday’s Rate Announcement, the first of eight regularly scheduled rate meetings this year, Carney said the economy is growing at a slower pace than expected….  we having a cooling housing market….. inflation remains low and is not an immediate concern….  Last but not least, he expects the economy will not reach it’s full capacity in late 2014 and that withdrawing any monetary policy stimulus is less imminent than previously anticipated.

End result, no rate hikes are expected til 2014…  These comments come as a bit of a surprise given the Bank of Canada has wanted to raise rates for the past 2 years.  Well, maybe it’s Carney’s way of giving us a departing present….Let’s not look a gift horse in the mouth. Continue reading “Interest rates to stay low for longer than expected…”

Posted 2 Comments on Fed govt, BIG SIX BANK’s pushed us into Fixed rates!…part 2 of 2. Case study

Fed govt, BIG SIX BANK’s pushed us into Fixed rates!…part 2 of 2.

Flaherty and Harper

IT’S NO COINCIDENCE THAT THE BIG SIX BANKS CONTINUE TO REPORT RECORD PROFITS.

The Bankers were onto something.  Now if they could only keep Variable rate pricing higher or make itMark Carney tougher to get a Variable rate mortgage…. In 2010, the Fed govt would help increase those Bank profits…All new Variable rate mortgage borrowers would need to qualify at the Bank posted 5 year fixed rate.   The Feds said they had to tighten Mortgage Lending Rules… They had to make it tougher to qualify for a mortgage with fluctuating interest rates to ensure we would not have a ‘housing bubble’ and a ‘mortgage default problem’…  This pushed out 5% more borrowers from qualifying for, and benefiting from Variable rates.  And by the way, at that time, Variable rates ranged anywhere from 1.50% to 1.95% compared with the best discounted 5 yr fixed rate of 3.89%…..!  Anyone seeing a pattern here?   (Some stats to remember…Mortgage defaults have been under 0.50% for over 15 years are currently at around 0.33%… this is at or near record lows!!… so where’s the problem??)

This is also when the BIG SIX BANK’S inflated, and unfair mortgage penalty calculation came to light.   The lower rates became, the higher mortgage penalties climbed…  $10,000, $20,000, $30,000 in mortgage prepayment penalty charges were popping up in mortgage blogs and news sites.   Even the media had to jump in and cover some of this…  And when Canadians needed a break in their mortgage payments, they were left out in the cold.   These inflated penalties made it impossible to get out of their higher Fixed rate mortgages without paying an enormous penalty. Continue reading “Fed govt, BIG SIX BANK’s pushed us into Fixed rates!…part 2 of 2.”