TagVariable rate

Posted July 22, 20172 Comments Consumer Debt

Banks pass on rate hikes but not the savings.. Shame on the BANKS!

On January 2015, the Bank of Canada cut the prime rate by 0.25%. But the BIG SIX BANKS didn’t cut the Prime rate as they normally do. Instead, they waited a week… tried to justify why they couldn’t cut the rate… and finally caved in and cut it.. but ONLY by 0.15%.

That’s right, they pocketed the remaining 0.10%. And in case you haven’t heard, the BIG SIX BANKS have been posting record profits, year after year after year after year after year. In 2016, the 5 most profitable corporations were:

RBC
TD
SCOTIABANK
BMO
CIBC

Continue reading “Banks pass on rate hikes but not the savings.. Shame on the BANKS!”

Posted July 12, 2017 Bank News

Bank of Canada rate hike.. it’s really not a big deal.

BREAKING NEWS… BANK OF CANADA RAISES RATE BY 0.25% AND THE SKY HASN’T FALLEN!!

Stephen Poloz, the Bank of Canada Governor, raised the Target rate by 0.25% to 0.75%. Maybe now the media will move on to other news.

Seriously, aren’t we all kinda tired of hearing how rates are going to skyrocket,…how this is going to make our mortgages unaffordable… how we have record debt levels.. how we are going to default our mortgages, lose our homes and go into a recession…it’s doom and gloom? This isn’t happening.

SOME FACTS ABOUT THE RATE HIKE Continue reading “Bank of Canada rate hike.. it’s really not a big deal.”

Posted April 14, 20171 Comment Bank News

Enjoy the low rates..No rate hike with Bank of Canada

The Bank held their third, of eight, scheduled meetings this week. As widely predicted, the Bank of Canada announced that it is holding the key rate steady.

While noting that “economic growth has been faster than expected”, the bank said it’s too early to determine if the economy is on a “sustainable growth path”, citing weakness in export growth, business investment and employment.

The Bank’s three measures of core inflation, taken together, continue to point to material excess capacity in the economy. While there have been recent gains in employment, little growth in wages and hours worked continue to reflect economic slack in Canada, in contrast to the United States.

The bank also took into account uncertainties that include the potential impact of U.S. trade policies. The next rate-setting day is May 24.

This announcement means there should be no change to the prime rate. Great news if you have a variable-rate mortgage or line of credit, need a new mortgage, are renewing, or want to save thousands by consolidating debt at the lowest-cost funds. Or perhaps you are thinking of using home equity to invest in a rental property or second home, or cost effectively complete renovations.

Given the uncertain economic outlook, we continue to expect interest rates to stay low in Canada well into 2020, although the new mortgage rules have caused mortgage rates to be very complicated. Quick rate quotes are not very reliable! That’s why it’s so beneficial to work with an experienced mortgage broker who has access to a wide range of lenders and knows the right questions to ask to assess your situation and provide the best mortgage for your needs. Save yourself time and stress; don’t just ask what the rate is, have a conversation instead.

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

Posted March 30, 20165 Comments Interest rates

Variable rate is out, Fixed rates are in…. But, which term…?

For more than a decade, I’ve been recommending Variable rate mortgages, as the product of choice. My clients have saved $thousands. It’s been a great 11 year run.. But now, the strategy has changed slightly. Read on, to see my newest recommendations..

QUICK VARIABLE RATE HISTORY.

First, you need to understand the history.. Variable rate had lots of pluses. It had a lower rate of interest, the penalty can never go over 3 months interest, and you have the option to lock into a Fixed rate at any time.

Being in a Variable meant paying lower rates. In fact, the difference, compared with Fixed rates, ranged between 1.00% and 3.00%. This translated to several $$thousand in less interest each year. Continue reading “Variable rate is out, Fixed rates are in…. But, which term…?”

Posted November 24, 20154 Comments Interest rates

Mortgage rates went up…. but why? And will they continue to go up?

A month ago, I said Fixed mortgage rates probably hit the bottom. A week later, fixed mortgage rates started to go up… around 0.20% over the past 3 weeks. Variable rate mortgage pricing has gone from Prime less 0.65% to Prime less Prime less 0.40%.

Now, here’s the thing…. I don’t think rates will skyrocket over the next 6 or 12 months, like the pessimists would have you believe. I think mortgage rates hit the bottom….BUT, they probably won’t go up very quickly.

In fact, the forecast now is for the Bank of Canada rate to stay the same until 2017. This is just another example of how the world has become a smaller place. If someone sneezes in Germany, we catch a cold. With most of the global economies just getting by, there isn’t much reason for mortgage rates to go crazy. They should remain low.

The key driver for rates going up recently is nothing more than profit taking. Banks have had a great year… In case you didn’t know. That’s right.. we seem to forget that 2015 was one of the best years on record for real estate and mortgage volume… and house prices have never been higher. Funny how that seems to get lost in the media reports.

Look for Variable rate pricing to fall in the new year… Fixed rates could also come down slightly, but don’t count on them hitting the record lows that we saw this summer. Hey, that’s not to say rates are bad. We are still well under 3.00%. These are ridiculously low mortgage rates. Enjoy them while you can.

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