Happy New Year! Wishing you all the best in 2011….
Here’s the Bank of Canada’s schedule for key interest rate announcements in 2011.
January 18, March 1, April 12, May 31, July 19, September 7, October 25, December 6.
The Bank meets eight times a year to set the Target Interest rate. This rate directly affects the Bank Prime rate and Variable rate mortgages. It also affects Fixed rate mortgage indirectly.
Historically, the Bank adjusts this rate up and down between 2 and 3 times a year. In 2010, we had 3 rate increases of 0.25% each after a full 12 months of no changes. And most experts were forecasting for even greater rate hikes… This all changed when the economic recovery stumbled in many parts of the world, raising fears of a double dip recession.
Even today, there is still uncertainty about the economy in many parts of Europe and the U.S. At home, in Canada, we seem to be doing well….not great, but okay.
This uncertainty is delaying the expected interest rate hikes that so many experts were calling for in 2010…. Best guess now is for rates to remain stable until April or even July.
Enjoy the low rates…!
Yes, everyone needs some time off, including me. I am taking a little break. Back in January 2011.
But before I go, I want to say thank you for making our first full year at CanadaMortgageNews.ca a great one! My personal goal was to write 2 posts a week and get the word out to as many Canadians as possible… 122 posts later, we had tens of thousands of hits… the site has really taken off in the past 3 months… all thanks to you… no advertising, no sponsors… all word of mouth…it’s all you… Thank you. I hope you have found the info and opinions helpful.
Let me take this opportunity to wish you and your loved ones a safe and happy holiday at this festive time of the year.
PS. Watch for more breaking news in the coming year.. including possible changes to mortgage rules (yes, more), the long-awaited standardized prepayment penalty calculations (sounds like it’s coming) and a real estate market that is expected to be flat, but that’s not everyone’s opinion. Oh, and of course, mortgage rates…where are they going? We’ll bring you the latest… but right now, rates are expected to remain flat for the next little while…
Today was the last of eight regularly scheduled meetings by the Bank of Canada (BOC). The BOC didn’t raise their Target rate.. no surprise here. With uncertain economic data in the U.S., Ireland and even a little shaky news in Canada, there was no chance of a rate hike.
It’s widely believed that Governor Mark Carney will not raise the rate until March 2011 at the earliest, or maybe even May 2011… possibly later… read more here.
One thing is for certain, the longer things remain uncertain, the longer we will be enjoying these record low rates… Variable rate mortgages can be had at 2.25% and a 5 year fixed is around 3.69%. Borrow wisely…
It’s been a slow week for mortgage news.. but that’s okay.. when it comes to interest rates, boring is good!
Mortgage rates are remaining low as the Economic data around the world is still not great.
Fixed rate mortgages are hovering at just over 4.00% for a 5 year term… still in historical low territory and well below the 25 year average of 8.25% for posted rates (discounted rates are approximately 6.75%).
Variable rate mortgage continue to be a favorite.. and why wouldn’t it be… under 2.00% rates, fixed prepayment penalties of 3 months interest compared with Fixed rate penalties of 3 months interest or Interest Rate Differential which have been as higher 8, 9, 10, 13 months interest or more… Yes, from your major Banks…
Hybrid mortgages are the hot product lately..l saw some stats stating they have become more popular… but be careful.. these products tend to have limitations and restrictions that can cost you dearly in the future….
Remember, a Mortgage is more than just the rate… Rate is the single biggest factor that affects your overall cost, but it’s not the only thing…
One more tip… any long-term contract has a price.. and the price is usually more expensive than we think.
Most of us understand that establishing and maintaining good credit is important. Beacon scores or Fico scores, as they are sometimes referred to, are generated based on many factors but the main things that influence your score are:
-number of years you have had credit (the longer the better).
-your repayment history (missing payments will hurt your score).
-the type of credit you have opened (term loan, revolving line of credit, credit card or finance company purchases).
-your balance in proportion to your available limit (don’t go over 70% of your limit).
-credit utilization overall (how much of your available credit have you used up).
-number of recent inquiries on your credit (make sure you don’t apply for too much credit).
-inquiries by finance companies (hard and soft inquiries….there is a difference).
-change in address (if you move frequently, this can affect your score negatively).
All these things affect your credit score. Wondering what a good credit score is? A great score is anything above 700. Most mortgage lenders would agree and this would qualify you for any mortgage product (recently, one lender came out with a 720 minimum score for a certain product). Some mortgage products require a 680 minimum score and generally speaking, 650 and above is good… 620 and below is weak…and 580 and below is poor.
You can obtain your own personal credit report from Equifax to find out what your score is and it does not count against you… it will not show up as an inquiry on your report…there is a small cost for this…. let me know if you need more info…