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Higher minimum down payment coming.. relax, it’s just political posturing.

Bill MorneauAs expected, and as I had predicted back on October 21st, the Federal govt made their first major announcement last week.  All new govts want to make a major announcement early… It shows they are doing something….So, here it is.

The new Federal Minister of Finance, Bill Morneau, broke the news on Friday.   A change to the minimum down payment rules.   That’s right, the minimum down payment to buy a house is going up…. well, sort of… Okay, that’s the headline … but now, keep reading for the real facts.   Here’s a link to The Star’s article by Susan Pigg quoting yours truly…. Continue reading “Higher minimum down payment coming.. relax, it’s just political posturing.”

Posted 1 Comment on Negative interest rates by the Bank of Canada… No, not likely. Interest rates

Negative interest rates by the Bank of Canada… No, not likely.

stephen polozYou gotta love the media.  Yesterday, the Bank of Canada Governor gave a speech and announced a change in contingency plans should we fall into another financial crisis… like the US-made global recession in 2008.

But if you read the headlines, you would think the sky has fallen.  All I kept seeing were headlines claiming “Canada could see Negative interest rates.  Below zero interest rates.   Canada would consider negative interest rates…  ”   Wow, talk about misleading the public.

Okay, so here’s what he really said, and this is straight from the Bank of Canada website…I quote… “We don’t need unconventional policies now, and we don’t expect to use them. However, it’s prudent to be prepared for every eventuality,” Governor Poloz said in a speech today to the Empire Club of Canada.

He went on to say that he believes that our economy is on target to rebound for 2017.. and here’s another direct quote.  “The Bank is forecasting increasing annual growth in 2016 and 2017, with the Canadian economy expected to reach full capacity around mid-2017.”

I think this is pretty clear.   The ‘worst case scenario’ plan has changed..  and the BOC govr expects our economy to rebound in the next 12 to 18 months.   Hope this helps to clarify the message.  Keeping it real.. and keeping it simple.

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 4 Comments on Mortgage rates went up…. but why? And will they continue to go up? Interest rates

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

fearup down graph

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

Posted 1 Comment on Paris attacks won’t change human kindness.. Maybe this story will help to brighten your day. Fun news

Paris attacks won’t change human kindness.. Maybe this story will help to brighten your day.

car accidentLast week, I started writing this article.. but just couldn’t find time to finish.. And then, the Paris terrorist attacks happened.  How tragic and senseless.  Well, maybe this article will lift your spirits just a bit.

About a month ago, I had an interesting experience… I was parked downtown… was walking back to my truck and noticed a note on the windshield.    It read, “I hit the front corner of your truck!!  I’m so sorry. You can contact me…  416 123 4567 (I’m blocking out the true number)  Shannon”.

I had a look at the front of my truck and sure enough the bumper had been pushed in.   I’ll admit, my first reaction was anger and bit of self pity… you know, ‘why did this happen to me?’..  That sort of thing.

But then I started to wonder… was this phone number real or did someone just write a note to make it look like they were doing the right thing?    I quickly called that number …  sure enough, Shannon was real.  She answered and was so apologetic.   She felt very bad about what happened.

I quickly stopped her and said, “it’s ok.  Accidents happen all the time.  You did what many others wouldn’t do.  You stepped up and took responsibility.  I’m so thankful that you did.   Honesty and honor are just words to some people.  You are clearly a person of honor.  Thank you for being honest.”

Shannon turned a bad situation into a good experience.  As strange as this sounds, I actually felt pretty good the rest of the day.

Last week, I brought my truck in for the repair.  Shannon was true to her word and paid the autobody shop and also paid for my car rental.

Thank you Shannon…. for showing me there are still good, honest people in this world.. taking responsibility for their actions.    Thank you for making me believe in the human spirit.   I hope I can pay it forward one day.

Hope this brightens your day, just a little.

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 cost today is $1380/mth for every $300k… and sharing high net worth secrets. Consumer Debt

Mortgage cost today is $1380/mth for every $300k… and sharing high net worth secrets.

percentageFixed mortgage rates went up this week on the wholesale market.   Only about a 0.10% increase…  We are still way below 3.00% for 5 yr fixed rates. Hey, that’s pretty good!  (watch for the media to blow it out of proportion soon.. they seem to love feeding on negativity).

Thought I’d share some quick numbers..    Did you know that a $300k mortgage will still carry for $1380/mth?   And that’s with a 25 yr amortization.  If we go to a 30 year amort, the payment drops to $1221/mth.

Let’s increase the mortgage to $400k.. payments are $1840/mth and $1628/mth for a 25 and 30 year amortization, respectively.   Hey, these are still incredibly low mortgage rates.   Anything under 4.00% should be considered a gift.  (I’ll get into what Canada’s wealthy are doing in a few moments) Continue reading “Mortgage cost today is $1380/mth for every $300k… and sharing high net worth secrets.”