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Posted 1 Comment on Short term fixed products are still in… Money saving tips

Short term fixed products are still in…

SHORT TERM RATES ARE STILL IN

A few months ago, I said Variable was out, Fixed rates were in.   I recommended going with a short-term fixed rate products.  The reasons are simple:

  • You can get the same or better in a 2 and 3 yr fixed rate term.  That eliminates the Variable rate for me.
  • 2 yr is 2.19% and 3 yr is 2.29%.
  • Variable is 2.30% today.  Why choose a fluctuating rate when you can get a guaranteed better rate for the next few years?
  • I also don’t like the current Variable rate pricing that’s out there.
  • Prime less 0.40% isn’t good enough.. I like to see Prime less 0.50% or better.

Historically, we’ve always done better by choosing short-term rates.  And that’s what Variable rates are…A mortgage product priced from short-term funds.  The only difference today, is that it makes more sense to lock into 2 or 3 yr fixed term vs choosing a Variable rate.

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)

MORTGAGE TIP

Hey, want to know which Mortgage Advisor to use?  Check out their historical recommendations and forecasts.  That should tell you all you need to know about that advisor.   And if you can’t readily find those historical forecasts, then walk away and look elsewhere.

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 Interest rates

Should you look at 10 year fixed rate mortgages?

Fixed rate mortgageToday, 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 Debt

I have 2.39% for 5 yrs fixed available…but I wont sell it.

percentageIt’s true.  I have access to this great rate.  It’s around 0.20% lower than the best rate today.   And you won’t see me recommending it to my clients.

That’s right, I’m recommending they don’t take it.

Why?  It’s simple.  No, I don’t want my clients paying more on their mortgage. I want to see them PAY LESS to own their homes.  This is one of those products that carries an inflated prepayment penalty. Should the homeowner need to get out of their mortgage early, they will be hammered with a ridiculous exit cost.   We’re talking 10, 12, even 16 months worth of interest penalty.

Statistics clearly show we are paying or changing our mortgages every 3 years.   So, chances are, you will have to pay this penalty.   On a $300,000 mortgage, your penalty could be $9,000 or more.  Compared with $1,943.  That’s a $7,000 difference.

That 0.20% savings on the rate equals $600 per year..   You still think that 2.39% rate is great??

The next time you hear or see something that sounds too good to be true, it probably is.  If you aren’t sure, call me or an experienced Mortgage Broker for unbiased 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 2 Comments on Mortgage penalty calculations.. More important than the interest rate. Money saving tips

Mortgage penalty calculations.. More important than the interest rate.

greedy banker

WHY ISN’T ANYONE TALKING ABOUT THIS?

You bought a home…  you need a mortgage.. what’s the first question you ask your Banker?  “what’s your best interest rate?”.  And the second question is usually, “what product should I choose?”.

Almost no one asks about Mortgage Penalties or how they are calculated.  After all, how often does anyone have to pay a penalty, right?   WRONG!   $10,000, $20,000, $30,000 and higher.  This is how much penalties can add up to… these are real numbers.   And guess what?  This isn’t some unknown bank or small lender.. These are coming from the BIG SIX BANKS.!!

Here’s a little known stat…. “Canadians change their mortgage every 3 years, on average”.  Ask anyone that’s owned a home before.  Chances are, they’ve had to deal with a mortgage penalty at some point..  and for most of them, it’s an embarrassing subject.   After all, who wants to admit to being the victim?  Check out the stats… Continue reading “Mortgage penalty calculations.. More important than the interest rate.”

Posted Fun news

Not about Mortgages… Cut the crap!

cut the crapIt’s rare that I talk about something that isn’t directly related to mortgages, real estate or finances.  Today is one of those days.  I want to share this pretty cool podcast channel I stumbled upon.  Maybe you’ll find it as useful as I did.

Cut the Crap.

Yup, that’s the name of this podcast channel.   Ok, at first, I thought, what can this be about?  Maybe it’s a spinoff from the old Penn and Teller show?? But then, I saw the headline at the bottom “Never read a book again”.   I thought, okay, let’s check this out.   And I’m glad I did. Continue reading “Not about Mortgages… Cut the crap!”