Quoting rates isn’t straightforward anymore. Your final rate is based on your credit score, purchase price or home value (homes over $1 million purchased after Oct 17, 2016 have higher rates), the loan to value (mortgages under 65% LTV and above 80% LTV get best rates), location, job type and income confirmation documents.
That’s right… ALL these factors will determine your interest rate!
Today, there’s a great variable rate available at Prime minus 1.09%. That translates to 2.39%. This is a real rate… it’s not a bait-and-switch ad like so many rate-comparison sites are quoting these days.
Continue reading “Prime minus 1.09%… Yes, this is a record-low Variable Rate!”
Yesterday, Bank of Canada (BoC) Governor, Stephen Poloz, left rates unchanged. This kept the bank prime rate at 3.45%.
This also, indirectly, affects fixed mortgage rates. Great news for anyone with a mortgage. Go ahead, it’s okay to feel good about paying a low interest rate on what’s probably the biggest debt of your life!
ARE ECONOMISTS RIGHT?
For months we’ve heard economists forecasting 2-4 BoC rate hikes for 2018. So far, we’ve had one increase – in January. Should we be expecting three more increases? Only time will tell, since the BoC raises its rate when inflation rises above the target inflation rate… currently the range is between 1% and 3%, and sits at an acceptable 2.10%. Some believe inflation has increased temporarily, in part, due to increased minimum wage.
Continue reading “Got a mortgage? Good news: Bank of Canada didn’t raise rates yesterday!”
In what I’d call, a Halloween Hangover move, TD announced they will be raising their Bank Prime Mortgage rate to 2.85% from 2.70%. In a circular I received today from TD, they threw us yet another surprise, in a month full of surprises.
What’s interesting is that on Oct 19, the Bank of Canada Governor, Stephen Poloz, was quoted saying he was considering lowering the rate.
Variable Rate mortgages are priced from the Bank Prime rate. TD is adding a 0.15% premium to all Variable rate mortgage clients.
We should be watching for the other BIG SIX BANKS to follow. If they don’t in the next week, the perhaps TD will pull back. TD seems to be telling us it’s due to market conditions (whatever that means). Personally, I think it’s just greed. There’s not real reason to raise the rates….
Stay tuned… this story hasn’t fully played out yet.
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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?”
Last 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…!”
It seems like a rate hike is almost certain for tomorrow’s Bank of Canada meeting.. but we need to put this in perspective… The Bank of Canada has not raised rates since July 2007… and Mr. Carney has never raised the Target rate since he took his place as Governor…. (he should be a popular person among Canadian borrowers).
But let’s put it in perspective…even if the Variable rate doubles to 4.50% from it’s current 2.25%, we would still be in historically low interest rate territory when it comes to variable mortgage rates…
A 25bps or 50bps or even a 100bps increase should only slow the housing market and not kill it….. Remember, these are EMERGENCY RATES…. The Emergency is over.. and we should want it be over… We should be happy that we’ve been able to enjoy these record low rates for so long….. the sky isn’t falling… we won’t be seeing rates of 9% or 10% or anything near that level…