TagMortgage Broker

Posted April 29, 2015 Case study

Online shopping for Stocks, Vacations and Mortgages. An In-depth comparison…

IS CHOOSING A MORTGAGE IS AS EASY AS BOOKING A TRIP OR TRADING A STOCK?…LET’S FIND OUT!

Sure, you can book a flight online or a buy a stock through the web. But, can you really choose the right mortgage product on your own? Can you really find the absolutely lowest cost mortgage financing option? I’ll bet some consumers can. I’ll also bet the vast majority cannot…. and there’s a steady stream of horror stories, on this news site and others, that show just how costly and financially dangerous it is to be in the wrong mortgage product, with the wrong lender.

I’ve shared dozens of those experiences on this site. Consumers who were directed into the wrong mortgage by their Banker or by some web site claiming to offer ‘the lowest rate’. I empathize with these consumers as I believe they were just trying to save some money but instead ended up paying far more than they had to. Continue reading “Online shopping for Stocks, Vacations and Mortgages. An In-depth comparison…”

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?!”