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Posted 2 Comments on Trudeau sworn in as new PM, and bond yields jump leading to higher fixed mortgage rates! Interest rates

Trudeau sworn in as new PM, and bond yields jump leading to higher fixed mortgage rates!

Trudeal Liberal majorityYesterday, our new Prime Minister gets sworn in.  Justin Trudeau is Canada’s 23rd Prime Minister.   Some interesting facts…  Bond yields have gone up significantly in the last 2 weeks, since the election.  Fixed rates are priced directly from the Govt of Cda Bond yields.  If the yields go up, then fixed mortgage rates go up.  If they go down, then fixed mortgage rates go down.

Since the election on Oct 19, the bond yields have made a steady climb upwards.  Going from around 0.80% to 0.97% today..     Investors seem to think the Trudeau govt will keep it’s promise and spend our way to prosperity.   The concern is that if the govt of Canada increases its borrowing, the borrowing costs will go up.  Meaning it will cost the govt more, which in turn affects personal borrowing costs.   That’s you and I.

Watch for fixed mortgage rates to climb over the next month or so.  Right now, the increase is expected to be minimal…. but that could change.

I’ll be watching and reporting how this plays out.   Let’s hope the campaign promise of increasing the deficit was one of those promises that doesn’t get honored.   If you want to keep borrowing costs low, then you also want less govt, not more.

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 Today is your last chance to stop DOUBLING of Land Transfer Tax. Mortgage News

Today is your last chance to stop DOUBLING of Land Transfer Tax.

kathleen wynneAs this is such an important issue, I’m gonna repeat my last article.  Today is the last day to voice your opinion to our Provincial govt and tell them how you feel about the possibility of DOUBLING your Land Transfer Tax.     The govt is accepting all opinions until today.

The Minister of Municipal Affairs and Housing is Ted McMeekin… You can email his office through Mark Cripps at  Mark.Cripps@ontario.ca and by phone at 416 585 6842.

In case you don’t know what Land Transfer Tax is… the province charges a tax to the purchaser, every time a home is sold.  Yup, another cash grab.  It’s kinda like when you buy a new car… when you buy it, you are charged sales tax (today, that’s 13%… remember when it was 7% and 8%?  seeing a pattern here anyone?).   And when you sell that car, the sales tax is levied once again to the new purchaser…when they sell it, the new purchaser must pay this sales tax again… and so on, and so on.    But why?  Why should a sales tax be charged over and over again?   Can anyone explain this?

If you buy a house, and sell in 2 or 3 or 10 yrs, the govt charges this Land Transfer Tax.  It’s ridiculous and it’s not a fair system of levying a charge..   Yet, it’s something that has been accepted as the norm.

In Toronto, the mayor couldn’t balance the budget so he seeked special powers from the Province to introduce a Toronto Land Transfer Tax in 2008.  Yup, they just created a new tax out of thin air and slammed all property buyers with a double tax..   Nice, eh?

Look, if you are as upset with this as I am, then take 2 mins and send an email to the govt.   It’s one thing to bring into a major city like Toronto, but to bring into all communities across the province would be disastrous.   Not all of Ontario is experiencing prosperity.  This is shameful.  I don’t like making strong statements like that.  But I can’t help myself.

Stand up Ontarians!  Have your say.

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 New Land Transfer Tax for ALL of Ontario??!! Ms. Wynne, stop the madness! Mortgage News

New Land Transfer Tax for ALL of Ontario??!! Ms. Wynne, stop the madness!

kathleen wynneDid you know that in 2008, the city of Toronto was given special powers by the Provincial govt to bring their own municipal land transfer tax?   Since then, homebuyers in Toronto have had to pay 2 land transfer taxes.  The Provincial one and the municipal one.

On a $500,000 home, Land Transfer tax in Toronto is $12,200.  In the rest of Ontario, it’s $6475.  On a $750,000 home, LTT in Toronto is $22,200. The rest of Ontario, it’s $11,475.  It’s a sliding scale with the % going up the more your home is worth.

Yesterday, October 27th (remember this date), we saw news reports that the Ontario provincial  is considering extending those same special powers to the rest of Ontario.    I’ll repeat that… the Provincial govt, led by Ms. Kathleen Wynne, is considering extending special powers to allow the rest of Ontario to add their own municipal land transfer tax.  Continue reading “New Land Transfer Tax for ALL of Ontario??!! Ms. Wynne, stop the madness!”

Posted Interest rates

Have Fixed mortgage rates hit the bottom?

record low ratesEarlier this year, Fixed rates hit new all-time lows.  This must sounds like a broken record, or for those in the modern error, sounds like a glitch or a skip (somehow, ‘broken record’ sounds better).

5 year fixed rates hit 2.59%.  This is the lowest we have ever seen. (before you start emailing me that you’ve seen lower rates, yes, I know.. I see them too and have access to them.. but those products are full of restrictions, limitations and inflated prepayment penalty calculations… for our purposes, I’m only discussing quality mortgage products with no gimmicks or strings attached).

Now, looking at the 5 yr govt of Cda bond yields (this is where fixed rates are closely priced from), we have seen this drop down to as low as 0.70%… it’s been holding steady in the 0.80% range since July.    Normally, the 5 fixed rate is priced 1.10% to 1.50% above the 5 yr bond yield..  but the spread has been at or over 1.79% for quite a while.   So, why haven’t the fixed rates gone down further? Continue reading “Have Fixed mortgage rates hit the bottom?”

Posted Mortgage News

Trudeau effect on housing market, interest rates and more….!

Trudeal Liberal majority“My fellow Canadians,  Canada has spoken…”  you’ve heard the speech before.  Okay, now that the party is over, what’s the hangover gonna look like?    It’s hard to say for sure.   Politicians are infamous for making promises they can’t keep.

One thing that we (I’m talking about anyone with a mortgage or invested in real estate) should be concerned with is what the Liberals plan to do with housing, mortgage rules, interest rates.

Here’s part of what they have promised..    Good and Bad. Continue reading “Trudeau effect on housing market, interest rates and more….!”