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TagUS Fed chair

US election year… low rates today, but higher rates tomorrow.?

US electionLooking at this pic, aren’t you happy to be living in Canada?    Ok.. back to the article…

September 7th is the sixth of eight scheduled meeting dates for 2016.  The Bank of Canada governor, Stephen Poloz, is expected to leave the rate unchanged.  The Bank of Canada rate affects Bank Prime rates and Variable mortgage rates.  It also affects Fixed mortgage rates, indirectly.stephen poloz

Historically, Canadian mortgage rates have followed the US election year.  As we lead up to an election, rates tend to lower than normal.   And in the months after the election, rates go up.  Not always, but this happens often.

Will this happen in 2017?   Hard to say… however, we’ve seen the US Fed Reserve Chair, Janet Yellen, state that the US rate could go up as soon as Sept 21.

This may or may not happen.   Ms. Yellen has hinted at a looming rate hike for months.   (sort of reminds me of our previous Bank of Canada governor, Mark Carney, making numerous statements of a pending rate hike that didn’t materialize for years).   Be careful, she could be known as “The woman who cried wolf”?

Stay tuned.. the next few months could be a bit of a roller coaster..   And as always, don’t panic.  If you’re not sure, contact an experienced Mortgage Broker for neutral, unbiased advice.

Oh, by the way, did you know we are experiencing the lowest fixed rates in history?  For those that have a mortgage, congrats.  You should be paying less interest than ever before.

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

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

record low rates5 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

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

Janet YellenLast 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.

stephen polozDivergence.  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!”

When this guy can’t qualify for a mortgage, you know the mortgage rules are too tight!

BernankeFORMER US FED CHAIRMAN CAN’T GET A MORTGAGE.

Anyone remember this guy?  Ben Bernanke.   He’s just the former Chairman of the US Federal Reserve Bank. He served two terms from 2006 to 2014.   Earlier this month, he revealed that he was declined for a mortgage refinance.  Now, just to put this in perspective, he used to make a nice 6 figure salary.  And today, he is paid an estimated $250,000 per speaking engagement.

How can he not qualify?  Clearly, the mortgage rules tightening process has gone waaaaaay overboard.   But this isn’t just happening in the US.   Canada’s mortgage lending rules have always been tighter than the US.  And over the past 6 years, the Canadian govt has brought in numerous changes to tighten the rules even further.  (Actually, experts agree that they went way overboard.  And we are only now seeing the effects of the rule changes.. Look out.  You’re in for a big surprise the next time you need mortgage money).

CANADIAN MORTGAGE RULES ARE EVEN TIGHTER!!

Canada’s Banking industry has been the envy of the world.  We came out of the 2008 US sub-prime mortgage crisis with no visible scars.   Continue reading “When this guy can’t qualify for a mortgage, you know the mortgage rules are too tight!”

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