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Posted Interest rates

Unexpected Trump win on Canadian mortgage rates and market.

US electionThe surprise Donald Trump US election win has caught many off-guard.  The pollsters have been quiet to comment after they all predicted a Clinton win.

Here’s what week 1 looks like, after the Trump win.  The first few days saw some chaos in the stock market.  Stock market went down and so did Govt of Canada bond yields.

However within a day, the stock market began to rise.  The Dow Jones hit all time record highs.  The Toronto market was up also, but not as much as the US.  The Canadian $ took a bit of a beating.  And the Govt of Canada bond yields started to rise.  This last one is important to watch.

Fixed mortgage rates are closely tied to govt of Canada bond yields.  We’ve now seen Bond yields increase by over 0.35%.  that’s a huge increase in such a short period of time.   Banks and Mortgage Lenders have begun to increase fixed mortgage rates.

Investors are betting on Trump stimulating the US economy and taking no foreign prisoners.  That’s caused some jitters in the markets.  I’m watching the markets closely.   This could just be a short term reaction.  Or, it could be an adjustment to the record low mortgage rates.

MY VIEW…   Continue reading “Unexpected Trump win on Canadian mortgage rates and market.”

Posted Consumer Debt

Marital splits… woman seem to be at higher risk when it comes to finances.

 

Stack of Coins and Bride and Groom Wedding Cake DecorationsThey say about half of all marriages end up in divorce.  In Canada, it’s around 48%.  In the U.S., it’s around 53% according to Stats Canada.  You’ve probably heard these stats before.

But what happens when a couple splits and all the financial matters were being handled by just one spouse?  In most cases (but not all), it’s the woman who is left with no knowledge of money matters.    Over the years, I’ve seen hundreds of marital splits and in an overwhelming majority of cases, the woman is left in the dark when it comes to finances (that trend is changing as today’s women are becoming more financially astute..  good for them.. let’s continue that trend).

There is HOPE and HELP.   Here are some things you can do to take charge of your finances before or after a marital split: Continue reading “Marital splits… woman seem to be at higher risk when it comes to finances.”

Posted Mortgage News

Mortgage brief.. CMHC ‘red warning’.. what’s it mean?

red-warningMuch has been made about CMHC’s Economists ‘Red Warning’ that was put out for the 4th quarter of 2016.  Let’s take a look at what the report actually says.

CMHC’s economists have 3 categories of measurement that are of concern.  Overheating, Price acceleration and Overvaluation.

VANCOUVER AND TORONTO

The Vancouver market had already been identified by CMHC as having moderate Overheating and Price Acceleration and Strong Overvaluation.    Toronto now has the same issues with the same Overall Assessment of Strong evidence of problematic conditions.

Put another way, CMHC believes the Toronto and Vancouver housing markets are vulnerable.   While this is cause for concern, there was also some other info in the report that we should be probably not overlook… Continue reading “Mortgage brief.. CMHC ‘red warning’.. what’s it mean?”

Posted Mortgage News

Mortgage Brief…TD raises it Bank Prime… going rogue .. for now!

TDIn what I’d call,  a Halloween Hangover move, TD announced they will be raising their Bank Prime Mortgage rate to 2.85% from 2.70%.  In a circular I received today from TD, they threw us yet another surprise, in a month full of surprises.

What’s interesting is that on Oct 19, the Bank of Canada Governor, Stephen Poloz, was quoted saying he was considering lowering the rate.

Variable Rate mortgages are priced from the Bank Prime rate.  TD is adding a 0.15% premium to all Variable rate mortgage clients.

We should be watching for the other BIG SIX BANKS to follow.  If they don’t in the next week, the perhaps TD will pull back.  TD seems to be telling us it’s due to market conditions (whatever that means).  Personally, I think it’s just greed.  There’s not real reason to raise the rates….

Stay tuned… this story hasn’t fully played out yet.

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 Consumer Debt

Mortgage tricks… and treats!

halloween-moneyHappy Halloween! And before the kids knock on your door.. just thought I’d send a quick mortgage trick and trick..

TRICK..  ‘Stress Test’ for mortgage qualifying.  The Finance Minister, Bill Morneau, blindsided Canadian Banks, Financial Experts and consumers when the govt introduced mortgage rules making qualifying even tougher.  The new rules mean consumers must qualify at the posted bank 5 year fixed rate.

TREAT... The reality of the new mortgage rules is that it’s not going to affect that many.  One of Canada’s biggest mortgage lenders told me, confidentially, that over 95% of their portfolio would easily pass the new stress test.  The REAL devil here is the Canadian Press.  Unfortunately, they are making this latest change sound like a death-blow for the real estate market.  Gauging my own clients profiles, I would say that even fewer than 5% would be affected.

If you’ve followed my site, you’ll know I’m a huge Variable rate advocate.  More than 90% of my clients have been in a Variable rate product.  And guess what?  They’ve always been able to qualify using the posted 5 yr fixed rate.

The govt wants to slow the housing market and property value increases.  I agree, we don’t want to see house prices continue unsustainable increases.   Not sure this latest change is the correct move.  Perhaps, this rule could have apply for higher priced homes only..?   Exclude homes less than $600k or $700k? Just a thought..   I’m also unsure the lack consultation or input from industry experts, was a wise move.  More open discussion is needed.  Just my opinion..

Happy Halloween.

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