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TagFixed rates

Posted Mortgage News

U.S. looking at Canada’s mortgage and banking yet again..

Found this article interesting….

Canada is the envy of the world when it comes to our mortgage and banking regulations.   This article in the Huffington Post questions why is there a 30 year fixed rate mortgage term and points to Canada’s mortgage and banking system as a better, more viable option.

In case you didn’t know, 30 year fixed rate terms are the norm in the U.S.   5 year Variable rate mortgages are the more common mortgage product around the world, including Canada.   200 U.S. Banks have failed since 2008… NONE in Canada… and in 1985, almost 3,000 U.S. banks failed but only 2 Canadian Banks closed their doors....

Go ahead Canada, feel good about yourselves…!

Posted 2 Comments on Spring market means lower mortgage rates..and some more creative financing. Mortgage Rates

Spring market means lower mortgage rates..and some more creative financing.

A funny thing happened on our way to higher interest rates….  They did an about face and went down.

Fixed Rates

The bond market drives fixed rates… and the 5 year Govt of Canada bond market has come down around 50bps in the last month…  So far, we have seen lenders reduce fixed rates by around 30bps… We are seeing 5 yr fixed rates in the 3.89% from some better lenders… and we could see a few more drops.

But we are also seeing some very interesting programs for cashback deals that are worth a look at….there is a 5 year fixed rate at 4.29% with a 2% cashback.. this one is worth looking at as it puts some cash in your pocket and gives you a good rate…

Variable Rates

Fixed rates are good for those that don’t want to worry about rates going up or down and don’t mind paying a little more for the security of fixed payment.  But we can’t ignore the lower variable rate mortgages… still hovering around 2.25%…

Earlier this year, most Economists and Experts believed the Bank of Canada was going to raise the rate at their next regular meeting on May 31st.. but with weak economic data coming out of the U.S., Europe and even Canada, most now believe the Bank of Canada won’t move until September or even next year in January.

Historically, Variable rate has outperformed Fixed rates…the product choice depends your risk tolerance, goals and objectives….

Posted Interest rates

The effect of an NDP win or coming in 2nd place and mortgage rates.

We don’t normally get involved in politics on this site… not unless it can affect mortgage rates, the housing market or the economy…One of the more infamous examples was in 1995 during the Quebec Referendum.   Does anyone remember that?

Just before the referendum, a new poll had suggested that Quebecers’ could win a majority vote to separate.  This sent the Canadian stock market and the Canadian dollar plunging.   You might also remember that the Bank of Canada rate jumped 1.00% over night along with mortgage rates.  It’s the single biggest increase that we have ever seen.  It forced many of us to lock into a 5 year fixed rate… (something the Banks loved as the 5 year fixed rate product is the most profitable).

I’m not saying this will happen again but there was a report in The National Post that says BMO put out a warning to investors that things could be shaky if Jack Layton and the NDP  continue to gain ground in the polls.

Another recent development this week is that a few major Lenders have increased their rates on new Variable rate mortgages.  We have seen them go from Prime less 0.75% to Prime less 0.50%.   They say it’s due to profitability pressures…. but I wonder if has more to do with the election next week?

Posted 1 Comment on TD and RBC are first to raise fixed rates… Interest rates

TD and RBC are first to raise fixed rates…

RBC and TD Canada Trust are raising fixed mortgage rates from 20bps on shorter terms, to 35bps for longer terms…. The new posted 5 year fixed rate is 5.69%…

The so-called ‘special fixed rate’ advertised by Retail Banks is now 4.44% at TD and 4.54% at RBC.… (Of course, Mortgage Brokers have access to even lower rates…)

Three weeks ago, Banks lowered their fixed rates after the Bond market dropped due to the Mid-east turmoil and the Japan Tsunami.   Bond yields have gone up from 2.45% on March 16 to 2.77% today.    That 32bps increase has prompted the Banks to raise rates.   Fixed mortgage rates are affected by Bond Yields.

Variable rates remain unchanged.   Not sure what’s best for you?  Speak with a qualified Mortgage Broker to get some direction.

 

Posted 19 Comments on CBC news reports Scotiabank slams client with $30,000 penalty! Case study

CBC news reports Scotiabank slams client with $30,000 penalty!

A word about world events the past 4 weeks…  We have seen a lot of turmoil overseas……  Egypt, Libya  and other middle east countries…. We need to pay attention…. Let’s hope for an immediate and peaceful resolution…

The Tsunami in Japan has been horrible… the images on TV are tough to watch…what a tragedy… Our hearts go out to the people of that nation.

Fixed rates drop slightly and Variable rates remain flat.

We have also seen how mortgage rates can be affected by these events… The uncertainty has caused the Bond market to fall…. and we even saw a very small rate reduction by the Big Banks… Posted Fixed rates are down around 10bps… 5 yr fixed is 5.34%. Continue reading “CBC news reports Scotiabank slams client with $30,000 penalty!”