The Bank of Canada meets Tuesday to set the overnight rate, which in turn affects the Bank Prime rate… and as expected, no one thinks they will raise rates… Great news for borrowers.. money remains cheap… Read the full report. Interesting little aside… the activity for mortgage underwriters has really picked up in the past 3 weeks… looks like borrowers are taking advantage of the low rates….
Hard to believe that we were or are in a recession when you hear reports like this one in the media. It’s easy to say that this market is interest rate driven…. there’s a lot of truth to that, but there must also be some level of consumer confidence… confidence in having a job, being able to pay the mortgage… We’ll have to watch and see how the Feds will view these numbers…
Remember, inflation will surely cause the government to raise rates.. up til now, no inflation concerns… Personally, I think it was partly driven by pent-up buyer demand…the market was much slower than normal in September, October and November… we’ll be watching and reporting…stay tuned..
Some fun to end the week….Burlington’s Mayor, Cam Jackson, wants the city to be included in the next version of Canadian Monopoly…. as it stands, Burlington is not in the top 65 cities and the Mayor doesn’t agree… I think I support his position… read more in the Toronto Star . If you want to vote, go to http://www.monopolyvote.ca and have your say….
Last year, variable rate mortgages were Prime plus 0.60%… a far cry from the Prime minus 0.90% that we saw 2 years ago. Today, one of our Lenders has just come out with a special promotion of Prime less 0.30%….wow! Prime is 2.25% less 0.30% gives us a rate of 1.95%…. gotta love it.
Here’s a little more good news…. Real estate prices are expected to remain strong in the first half of 2010 according to an article in the Canadian Press.
Did you know….. a 0.25% rate difference on a $250,000 mortgage adds up to a $3,100 savings over a typical 5 year term? Factor in that your principal residence mortgage is not tax deductible and add in a 40% tax bracket and you are talking around a $5,000 difference…