CanadaMortgageNews.ca

Posted March 27, 2013 Consumer Debt

BMO caves in to Federal govt pressure and raises mortgage rate.

It was bound to happen. BMO announced their so-called ‘low-rate’ (NO FRILLS) 5 yr fixed rate mortgage would be increasing to 3.09% from 2.99%. This comes shortly after the Federal Minister of Finance, Jim Flaherty, said that he called BMO and asked them to pull their 2.99% ads. Last week, the Minister’s office asked Manulife Bank to withdraw their recent ad promoting a similar low rate.

While, 2.99% isn’t the best rate today, it was the lowest advertised rate from the BIG SIX BANKs. It was somewhat symbolic. Of course, Mortgage Brokers have access to even lower rates through the wholesale mortgage market, but these lenders don’t have the deep advertising pockets that BMO or the other BIG SIX BANKs have. So the publicity surrounding this rate and the increase will get much more air-time. You can actually find full-featured 5 year mortgages at 2.89% today, through a good mortgage broker (a word of warning.. I’ve seen lower rates offered, and I have access to these products… but these products are not full-featured and come with some limitations that make them less attractive… just be careful when choosing your mortgage and your mortgage broker)… Continue reading “BMO caves in to Federal govt pressure and raises mortgage rate.”

Posted March 21, 20133 Comments Consumer Debt

Canadian Govt doesn’t want you to find the lowest mortgage rate.

Yesterday, we saw our Federal Minister of Finance, Jim Flaherty, admit to having his office phone up Manulife Financial and ask them to stop advertising their 2.89% 5 year fixed rate mortgage special. An unprecedented move for a government official… Yes, it’s true! But wait, it gets better (or worse). Flaherty admitted to calling up BMO personally, to ask them to stop advertising their 2.99% 5 year fixed rate (NO FRILLS mortgage). click here for the article.

Now, just a comment about these products and rates…. if you are a regular visitor to CanadaMortgageNews.ca then you’ll know the BMO low-rate (or NO FRILLS to be more accurate) is a terrible product with too many restrictions and limitations… Manulife has a decent product….rate is competitive, however, like most other Bank’s, there is some mystery about what their best rates really are… so once again, you can’t rely on a website or bank advertising when it comes to finding the best mortgage…a mortgage broker is the best way to get unbiased advice with access to dozens of Lenders. Continue reading “Canadian Govt doesn’t want you to find the lowest mortgage rate.”

Posted March 5, 2013 Interest rates

BMO’s 2.99% No Frills mortgage is back… and so is our warning to stay away from it!

So you’re shopping for a mortgage… and you see 2.99% advertised by BMO.. and you think, Wow, that’s a great rate!!… but is it really that great? And is it really a great mortgage product?

Well, first, what if I told you there was a lower rate out there? And what if I told you there was a lower rate without the restrictions and limitations of BMO’s NO FRILLS mortgage?

Ok, now that I got your attention, let’s continue…We saw this same product and rate advertised last year, in January 2012. BMO promoted their NO FRILLS, oops, I’m sorry, they want us to call it a ‘low-rate’ mortgage (guess that sounds better). There was a buzz in the air. My phone rang off the hook and my inbox was full of emails asking what this was all about. Continue reading “BMO’s 2.99% No Frills mortgage is back… and so is our warning to stay away from it!”

Posted February 27, 2013 Interest rates

Does 10 yr fixed rates make sense now?…

Fixed rates are still low… and a question I seem to get asked more often these days is, “when does it make sense to take a 10 year fixed rate?” And the answer, for me, is almost never.

Today, you can find a good 10 yr fixed rate under 3.70%. That’s a historical low rate for a 10 yr term. When you hear ‘record low’, it’s worth taking a look.

THE GOOD:

peace of mind… there is something to be said for knowing what your payments will be for the next 10 years. It’s like buying insurance.
we are at historical low 10 year rates.
if you paid your mortgage out after the 5 year mark, your penalty is capped at 3 months interest (a hidden provision in our mortgage laws…. I’m sure the Bankers are trying to get this removed too). Continue reading “Does 10 yr fixed rates make sense now?…”

Posted February 4, 20131 Comment Consumer Debt

Personal Debt level concerns are overblown according to Equifax stats.

So here we go again.. More stats that show our personal debt levels aren’t out of control… That’s right, I said ‘aren’t’ out of control. Equifax Canada says our defaults are at record low levels and we are paying off our debts faster. This doesn’t come as any surprise to me. Anyone that’s followed my posts knows that I have questioned all the popular articles telling us we are not managing our debts responsibly.

You’ve seen the reports… ‘Personal debts at record high levels’…..’Personal Debt crisis’. We’ve been hammered with the same headlines for the past few years. I just wasn’t seeing this with my readers or my clients… I kept seeing consumers wanting to take advantage of these record low interest rates to invest or improve their homes (why is that a bad thing?). That’s not bad debt in my opinion… that’s good debt.. And now we have some stats to back up what I have experienced. Continue reading “Personal Debt level concerns are overblown according to Equifax stats.”