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Posted Mortgage News

Record low Bond yields means even lower fixed mortgage rates

graph trend downFixed mortgage rates are tied into Govt of Cda bond yields.  As the yields go done, so does the fixed mortgage rates.. well, usually.. more on that later..These bond yields have hit all-time lows in the past week… Yesterday, they were as low as 0.55%...  To put that into perspective, the 5 yr bond yield is lower than the Bank or Canada overnight rate, which now stands at 0.75%.  Another historical event.  That almost never happens.

Check out these 2 historical charts to compare the Bank of Canada rate from 1935 to Dec 2014 and 5 year Govt of Cda bond yield from 1980 to Dec 2014….

If you’re wondering what this means for you, a Canadian consumer, it means mortgage rates should go even lower.   Institutional investors are pricing in a further Bank of Canada rate cut at their next schedule meeting on March 4th, 2015. Continue reading “Record low Bond yields means even lower fixed mortgage rates”

Posted 3 Comments on BIG SIX BANKS finally cut Prime rate.. Well, sort of…! Bank News

BIG SIX BANKS finally cut Prime rate.. Well, sort of…!

banksters monopolyLast week, the Bank of Canada (BoC) cut their overnight rate by 0.25%.  The move surprised all the so-called ‘Financial Experts’…  (well, not me… As I had suggested rates were likely to drop in the previous week’s article and also in the previous month).

Our BIG SIX BANKS had their own surprise for us.   Instead of passing along the usual rate cut to consumers, they sat on their hands and did nothing.   In fact, TD Bank felt good about it and made public statements about how their Bank Prime rate wasn’t fully influenced by the BOC rate.     (That’s such a load of bull, you can almost smell it coming out of your screens!)

And also last week, the Banks immediately cut the rate they pay you on your savings by that same 0.25%.   Continue reading “BIG SIX BANKS finally cut Prime rate.. Well, sort of…!”

Posted 5 Comments on TD green or TD GREED?!. as they refuse to lower the Prime rate!! Consumer Debt

TD green or TD GREED?!. as they refuse to lower the Prime rate!!

greedy banker Yesterday’s rate cut announcement by the Bank of Canada (BOC) governor, Stephen Poloz, caught all Economists by surprise.  The BOC cut their overnight rate by 0.25%.   Historically, and traditionally, this meant that the Bank Prime rate would follow.  Bank Prime rate is 3.00% and we expect it to fall to 2.75%TD.

But HOLD ON!…Today, it’s the BOC governor, Poloz, that will be surprised as TD Bank says they WON’T  be cutting their Bank Prime rate!  The BOC cut the rate to help stimulate the economy.  Businesses borrow commercial funds priced against Bank Prime… and consumers borrow lines of credit and Variable rate mortgages against Bank Prime. Continue reading “TD green or TD GREED?!. as they refuse to lower the Prime rate!!”

Posted Mortgage News

Bank of Canada Rate cut is positive news… don’t listen to fear mongers.

fear FEAR..!  They say fear motivates us to do things we shouldn’t.  If you’ve been reading the News Headlines for the past several weeks, you’ve been hammered with RATE HIKE FEARS!  Everyone was saying rates were gonna go up.

It wasn’t just speculation, it was a foregone conclusion.  Almost factual!   There were headlines even reporting how much of an impact these new ‘higher rates’ would affect our lives, our budgets, our house values, our savings, etc.    We saw so-called ‘Experts’ recommending we lock into long term Fixed rates!   There was one articles telling us we should consider selling out homes!   I mean if you didn’t know better, you would think the sky was falling!

Panic was starting to set in for thousands of Canadians.  I was getting calls from concerned consumers asking if they should be doing anything with regards to their mortgage, their investments, and other personal finances. Continue reading “Bank of Canada Rate cut is positive news… don’t listen to fear mongers.”

Posted 1 Comment on Interest rate surprise? Not to our readers! : Bank of Canada drops key lending rate to 0.75% Bank News

Interest rate surprise? Not to our readers! : Bank of Canada drops key lending rate to 0.75%

big newsLast week, I made a bold statement about interest rates.   I said rates will remain low for some time.   And they could even decline.

That forecast was met with a certain degree of criticism.    Well, no surprise for CanadaMortgageNews.ca followers, the Bank of Canada cut the rate by 0.25% to 0.75%.

This means Variable Mortgage rates will fall by 0.25%.   It also means we’ll probably see fixed rate mortgages also fall….. As I predicted.

Stay tuned for more details on this…

http://www.ctvnews.ca/mobile/business/key-interest-rate-unexpectedly-lowered-1.2198493

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