TagMortgage Broker

Posted February 3, 2015 Mortgage News

Record low Bond yields means even lower fixed mortgage rates

Fixed mortgage rates are tied into Govt of Cda bond yields. As the yields go done, so does the fixed mortgage rates.. well, usually.. more on that later..These bond yields have hit all-time lows in the past week… Yesterday, they were as low as 0.55%... To put that into perspective, the 5 yr bond yield is lower than the Bank or Canada overnight rate, which now stands at 0.75%. Another historical event. That almost never happens.

Check out these 2 historical charts to compare the Bank of Canada rate from 1935 to Dec 2014 and 5 year Govt of Cda bond yield from 1980 to Dec 2014….

If you’re wondering what this means for you, a Canadian consumer, it means mortgage rates should go even lower. Institutional investors are pricing in a further Bank of Canada rate cut at their next schedule meeting on March 4th, 2015. Continue reading “Record low Bond yields means even lower fixed mortgage rates”

Posted December 31, 2014 Debt

Looking ahead to 2015 rates and trends

Seasons Greetings! Happy New Year! Quick thank you for making 2014 a great year! Hope yours was just as special. And I’m wishing you much success and happiness in 2015.

I’ll make this quick as I’m sure you have some New Year’s Eve celebrations to attend to.

QUICK YEAR IN REVIEW.

Interest rates haven’t really changed this year.
5 yr fixed rates are under 3.00%.
Variable rate pricing improved to around Prime less 0.60% (less in some cases and dropping).
In fact, looking at the big picture, interest rates haven’t really changed much in the last 4 yrs. Yet, you wouldn’t know it by reading the newspaper headlines….(sorry to my media friends…)

Let’s get to it. MY THOUGHTS ON 2015. Continue reading “Looking ahead to 2015 rates and trends”

Posted August 13, 20143 Comments Interest rates

Variable or Fixed? an update on how to choose.

FIXED OR VARIABLE?

The debate over fixed vs variable never seems to end. For the past 5 years, the Federal govt and the BIG SIX BANKS have been doing everything in their power to force us into choosing a 5 year Fixed rate. The govt says it gives us security and protection against the anticipated interest rate hikes. BANKS jumped on this bandwagon because 5 yr fixed is the most profitable mortgage product.. and with fixed rates hovering at 3.00% for the last 3 years, it’s been an easy sell.

On the surface, it’s not bad advice. Fixed rates were supposed to go up. The spread between Fixed and Variable has been less than 1.00% over the last 3 years. My rule of thumb is that Variable rates should be 1.00% lower than 5 yr fixed in order to benefit from the possible rate fluctuations. So naturally, 5 yr fixed was a better choice.

DO YOU TRUST YOUR GOVT AND YOUR BANK? Continue reading “Variable or Fixed? an update on how to choose.”

Posted August 8, 2014 Money saving tips

But it came in a beautiful box?!

If I gave the option of choosing between 2 cell phones, which would you choose? Both phones had similar specs and were identical in almost every way… except PHONE 1 came in a nicely gift wrapped box with a bow on it. PHONE 2 came in brown paper bag but was less expensive and also had slightly better options.

Most of us would choose PHONE 2 right? Wrong! When it comes to mortgages, most of us are focusing too much on the beautiful gift box and not paying enough attention to the contents. They say around 47% of all mortgages go through a BANK and 39% go through a Mortgage Broker. Broker share is up, but not enough in my opinion.

When it comes to mortgages, the BIG SIX BANKS have been charging higher rates than what can be had from MORTGAGE BROKERS (see Bank of Canada study ‘competition in the Canadian mortgage market). And their inflated prepayment penalty calculations are now infamous (typical BIG SIX BANK penalties are around 4 times higher than other lenders).
Continue reading “But it came in a beautiful box?!”

Posted April 4, 20142 Comments Case study

Is your banker giving you their best rate?

EVEN THE BANK OF CANADA SAYS MORTGAGE BROKERS WILL GET YOU A LOWER RATE.

The Bank of Canada did a study a few years ago called Competition in the Canadian Mortgage Market. The study concluded that consumers get a lower interest rate through brokers. They also said that higher income earners were actually paying higher rates because they are less likely to spend the time to shop around for lower rates.

Last week, I did an interview for the news media about what a broker does. They also interviewed one of my clients. This client owns more than one property, he’s an experienced real estate investor and a senior manager for a major corporation. He uses my service because I save him time and money. He trusts my advice. It’s that simple. Here’s a link to the article.

IS YOUR BANKER GIVING THE BEST RATE?

A simple question. How many of us can truly answer, yes? You walk into your branch, you see a posted rate. Then your banker shows you the “special rate” or “discounted rate”. And then maybe they tell you they can do a little better. But how much better? And why aren’t they giving this up front? Don’t loyal customers deserve the best? Does this game sound familiar?

Continue reading “Is your banker giving you their best rate?”