5yr @ 3.64%* – 3.79%

4yr @ 3.49%

3yr @ 2.90%

*some conditions apply (i.e. prepayment flexibility etc)

How are Fixed Mortgage Rates determined?

The Canadian government and the Bank of Canada both play a major role in setting fixed mortgage rates. Fixed mortgage rates are influenced by the major bond yields. Bonds have always been considered a safer investment than equities and stocks. This is especially true when considering Government bonds.
When an economy is booming, most investors will invest in stocks and equities because they will earn a higher rate of return. This causes demand for bonds to decrease.  When this happens, the bonds must increase the yields of the bonds to entice investors.
When an economy is in a recession (much like today), investors will search for a safe place to store their money. Stocks will decrease or have a negative yield, which will cause investors to put money into bonds. This will cause bond yields to go lower because of the increased demand.

When the economy changes, the government of Canada is forced to increase or decrease long term bond prices. When this happens, it will reduce or increase the lending costs for banks. The banks will then pass on these new rates to borrowers by increasing or decreasing fixed mortgage rates.

For more information about rates and where we currently stand in the grand scheme of things, please don’t hesitate to give me a call.

Meaning what?  The BoC will now (more than likely) leave well enough alone for the foreseeable future.  Although… we’ve heard that before.  The next interest rate meeting is September 8th.  Below is a chart of where we’ve been over the years. (Click on it for a bigger view)

5yr Fixed @ 4.04%

3yr Variable @ 1.80% (Prime -.70%)

If you’re renewing, refinancing or purchasing… Call me NOW to hold these great rates!

I hope you’re enjoying a great summer so far!

Please enjoy the following: Historical Rate Charts – Fixed and Variable.  (Please click on graphs to open in full-sized window)

(Courtesy of Firstline Mortgages – A Division of CIBC)

First off, self-employed borrowers with more than three years in the same business who apply for a mortgage using stated income, as well as commissioned-income borrowers, are now required to provide to provide traditional proof of income (or “third party validation”) through regular income documents like financial statements, contracts and T4s.

Those who have recently become self-employed and don’t have third-party validation can still apply for a mortgage, but have to come up with a 10 per cent down payment instead of five per cent. Refinancing will also be cut to 85 per cent loan to value instead of the previous 90 per cent.

Please call to discuss.

90 Day Rate-Hold available. Call John now for more information!

(604) 710-1500

1. All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term
2. The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one’s home
3. Non-owner occupied properties will require a minimum down payment of 20%.

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.

While these changes were not dramatic, they will still effect the odd borrower who will have to come up with a little more money to buy the house they want.  Although, the 80% rental rule will pose a problem to those wanting to invest in rental properties.  Please feel free to call and discuss!

A growing number of Canadians are opting to use mortgage brokers instead of going to the bank branch, a recent study said.

According to Maritz Research, which conducted the study on behalf of CAAMP, the mortgage broker channel handled 23 per cent of all mortgage activity in 2008. This number was higher in Western Canada, (34 per cent in Alberta and 27 per cent in British Columbia), as well as amongst females (26 per cent), who were more likely than men (20 per cent) to deal with brokers.

“In the past, the first or only place a person would go when looking for a mortgage was to their local bank, however more and more Canadians are now seeking out the services of Mortgage Brokers to help them navigate the biggest purchase of their lives,” said study author Rob Daniel, managing director, Maritz Research Canada, to the Financial Post.

Another strong demographic for mortgage brokers was with young Canadians. In the 18 to 34 demographic brokers represented a 28 per cent share. With 53 to 54 year olds this decreased to 24 per cent, and with the 55 and older crowd it was even lower, at just 17 per cent.

It’s nice to see Canadians understand the value in the service we provide.  In the US, people use brokers for everything – health, auto, home & life insurance etc.  So rather than heading straight to the bank (with their 5-10 products) and accepting their ‘lowest’ rate… why not submit your application once and have all the mortgage products from over 50 lenders in Canada at your disposal?  Keep this in mind: Banks always look out for themselves.  As your mortgage broker, I am always fighting for your best interests.  Unbiased advice at no cost to you, along with greater savings and selection make this the growing trend.  Who wouldn’t want a tailor-made mortgage along with huge savings?

Call John @ (604) 710-1500!

If you’re currently in a Variable Rate mortgage and are considering converting to a Fixed product… STOP! I may be able to:

1. Pay out your penalty.
2. Get you a brand new 5 yr+ Product. (If you have 2-3 years left on your mortgage, do you really want to renew your mortgage when rates could potentially be a lot higher in a few years?)
3. Get an interest rate that is much lower than the conversion rate within your current mortgage; saving you thousands.
   

The time to ask these pertinent questions is right now.  We are seeing some of the lowest rates in Canadian mortgage history.  Why not take advantage of what many are calling the “bottom” of interest rates?  I can help you plan your long-term goals while taking advantage of these savings.  It’s smart-planning and free to boot!  Call now!