Enjoy the low rates..No rate hike with Bank of Canada

The Bank held their third, of eight, scheduled meetings this week.   As widely predicted, the Bank of Canada announced that it is holding the key rate steady.

While noting that “economic growth has been faster than expected”, the bank said it’s too early to determine if the economy is on a “sustainable growth path”, citing weakness in export growth, business investment and employment.

The Bank’s three measures of core inflation, taken together, continue to point to material excess capacity in the economy. While there have been recent gains in employment, little growth in wages and hours worked continue to reflect economic slack in Canada, in contrast to the United States.

The bank also took into account uncertainties that include the potential impact of U.S. trade policies. The next rate-setting day is May 24.

This announcement means there should be no change to the prime rate. Great news if you have a variable-rate mortgage or line of credit, need a new mortgage, are renewing, or want to save thousands by consolidating debt at the lowest-cost funds. Or perhaps you are thinking of using home equity to invest in a rental property or second home, or cost effectively complete renovations.

Given the uncertain economic outlook, we continue to expect interest rates to stay low in Canada well into 2020, although the new mortgage rules have caused mortgage rates to be very complicated. Quick rate quotes are not very reliable! That’s why it’s so beneficial to work with an experienced mortgage broker who has access to a wide range of lenders and knows the right questions to ask to assess your situation and provide the best mortgage for your needs. Save yourself time and stress; don’t just ask what the rate is, have a conversation instead.

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

US election year… low rates today, but higher rates tomorrow.?

US electionLooking at this pic, aren’t you happy to be living in Canada?    Ok.. back to the article…

September 7th is the sixth of eight scheduled meeting dates for 2016.  The Bank of Canada governor, Stephen Poloz, is expected to leave the rate unchanged.  The Bank of Canada rate affects Bank Prime rates and Variable mortgage rates.  It also affects Fixed mortgage rates, indirectly.stephen poloz

Historically, Canadian mortgage rates have followed the US election year.  As we lead up to an election, rates tend to lower than normal.   And in the months after the election, rates go up.  Not always, but this happens often.

Will this happen in 2017?   Hard to say… however, we’ve seen the US Fed Reserve Chair, Janet Yellen, state that the US rate could go up as soon as Sept 21.

This may or may not happen.   Ms. Yellen has hinted at a looming rate hike for months.   (sort of reminds me of our previous Bank of Canada governor, Mark Carney, making numerous statements of a pending rate hike that didn’t materialize for years).   Be careful, she could be known as “The woman who cried wolf”?

Stay tuned.. the next few months could be a bit of a roller coaster..   And as always, don’t panic.  If you’re not sure, contact an experienced Mortgage Broker for neutral, unbiased advice.

Oh, by the way, did you know we are experiencing the lowest fixed rates in history?  For those that have a mortgage, congrats.  You should be paying less interest than ever before.

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

Mortgage Brief…Bank of Canada doesn’t change rate..

stephen polozThis week, the Bank of Canada Governor, Stephen Poloz, held rates steady.  No increase or decrease. click here for BoC report.

The Bank of Canada meets 8 times a year, at preset meeting dates.   The Target Rate is used by Canadian Banks to set their Prime rate.  This also affects Variable rate mortgages and even influences short term rates.

Bad news is good news for mortgage rates.  Inflation is under 2% (well below the 3% max that is needed before rates climb)..  And the Canadian economic outlook is still not strong enough to support a potential rate increase.

So, for now, enjoy the low rates… actually, they’ll probably be around for a lot longer..

Remember, we are experiencing record low rates.. but this doesn’t mean we should all jump into a 5 yr fixed rate product..  We all have different wants, needs and goals..  Speak with a Mortgage Broker to get professional advice.

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

US Fed rate hike doesn’t mean Bank of Cda rate hike!

Janet YellenLast month, the US Fed Reserve Bank Chairperson, Janet Yellen, raised rates for the first time since 2006.    Historically, Canada follows the US with rate movement..  However, times are changing…Don’t expect Canada to follow the US move anytime soon.

stephen polozDivergence.  That’s the new buzz-word.  Bank of Cda Govr, Stephen Poloz said, “Usually you think of the Canadian economy following the U.S. economy fairly closely. This will be one of those places where it really doesn’t.”   “But as a macro statement, there will a divergence there. We’re already seeing it, and so you should expect a divergence in policy too,” he said. Read the rest of this entry »

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. Read the rest of this entry »

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. Read the rest of this entry »

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

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