TagBank of Canada

Posted June 21, 2016 Mortgage News

New record low fixed rates… how low can they go?

5 yr fixed rates just got better. With last weeks U.S. Fed chair, Janet Yellen, saying these low rates are the ‘new normal’, the markets reacted.

Bond yields are down and that has moved fixed rates lower. The best full featured, no handcuffs 5 yr fixed rate is 2.49% (yes, some fast closing specials exist but 2.49% is the best today). (oh, by the way, Yellen wasn’t the first govt rep to say this. Our own Senior Deputy Governor for the Bank of Canada, Carolyn Wilkins, said this 2 yrs ago.. Go Canada!)

Hard to believe they keep going lower. Does that mean we should jump into a 5 yr fixed? For some, yes. But for many of us, no. For over a decade, I’ve recommended Variable rate or a short term priced products. History has proven that short term priced products result in lower cost to the borrower.

However, there is something to be said for peace of mind. Many of us want to set it and forget it. For those that can’t sleep at night or for those that are borrowing to invest, then perhaps, 5 yr fixed makes sense.

If you really want to know what’s best for you and your situation, you must speak with an unbiased mortgage professional. A Mortgage Broker doesn’t work for any one Bank. They work for you. They will give you unbiased, neutral advice and they can offer hundreds of different products.

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 January 11, 20163 Comments Mortgage Rates

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

Last 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.

Divergence. 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. Continue reading “US Fed rate hike doesn’t mean Bank of Cda rate hike!”

Posted December 9, 20151 Comment Interest rates

Negative interest rates by the Bank of Canada… No, not likely.

You gotta love the media. Yesterday, the Bank of Canada Governor gave a speech and announced a change in contingency plans should we fall into another financial crisis… like the US-made global recession in 2008.

But if you read the headlines, you would think the sky has fallen. All I kept seeing were headlines claiming “Canada could see Negative interest rates. Below zero interest rates. Canada would consider negative interest rates… ” Wow, talk about misleading the public.

Okay, so here’s what he really said, and this is straight from the Bank of Canada website…I quote… “We don’t need unconventional policies now, and we don’t expect to use them. However, it’s prudent to be prepared for every eventuality,” Governor Poloz said in a speech today to the Empire Club of Canada.

He went on to say that he believes that our economy is on target to rebound for 2017.. and here’s another direct quote. “The Bank is forecasting increasing annual growth in 2016 and 2017, with the Canadian economy expected to reach full capacity around mid-2017.”

I think this is pretty clear. The ‘worst case scenario’ plan has changed.. and the BOC govr expects our economy to rebound in the next 12 to 18 months. Hope this helps to clarify the message. Keeping it real.. and keeping it simple.

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 August 31, 2015 Interest rates

Rates usually drop leading up to a Federal election!

History tells us that mortgage rates usually drop leading up to an election. And 2015 has followed that trend. It started in January of this year, when the Bank of Canada (BOC) Governor, Stephen Poloz, shocked Economists with his surprise 0.25% Bank Rate cut.

(CanadaMortgageNews.ca readers will remember, not all were shocked, as I had predicted a rate drop just days earlier).

Then in July, the BOC Govr did it again.. this time, it wasn’t as much a shock. The Bank Prime was cut by another 0.25% after months of negative Economist data showed the Canadian economy was slowing. Continue reading “Rates usually drop leading up to a Federal election!”

Posted July 29, 20152 Comments Bank News

BIG SIX BANKS aren’t passing along the Bank of Canada rate cut to consumers?

Today, the actual BANK PRIME rate should be 2.50%, not 2.70%. What am I talking about?… follow me on this and let’s see if this makes sense.

It’s been a few weeks since the Bank of Canada cut the rate. I’ve been waiting to see how this would play out… First, let’s get the terminology clear. Bank of Canada overnight rate, or Key rate as it’s referred to, directly affects the Retail Bank Prime rate and Variable rate mortgages. This does not have a direct impact on fixed rate mortgages.

Last January, the Bank of Canada Governor, Stephen Poloz, surprised most economists and financial experts when he cut the rate by 0.25% (well, not all experts, I called for a rate cut just a week earlier).
Continue reading “BIG SIX BANKS aren’t passing along the Bank of Canada rate cut to consumers?”