Fixed rates jumping a 1/4 of a % to around the 4.25% at major instituitions for popular 5 year term product.   No change to adjustable / variable rate mortgages which are still in low 2% range.  2.20%-2.30% at most lenders.

Interesting article in Globe and Mail debating whether good time to buy …

http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/rising-mortgage-rates-are-worse-than-you-think/article1897959/

Rates have settled after slight jump end of 2010.   Five year fixed rate anywhere from 3.79% to 3.99% depending on lender and closing date.  

Variable/adjustable rate mortgages still quite attractive as Bank of Canada held prime rate at 3% today.  So with discounts of up to .80% below prime that nets out to 2.20% for a low low interest rate.  

Bigger change to market due to Federal Government adjusting lending rules as they try to limit Canadian’s exposure to debt.   New rules below from Federal Finance Minister Jim Flaherty.  They were announced yesterday aimed at reducing Canadians’ soaring household debt.

The 3 New Rules:

1. Mortgage amortization periods will be reduced to 30 years from 35 years.
2. The maximum amount Canadians can borrow to refinance their mortgages will be lowered to 85 per cent from 90 per cent.
3. The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit.

The change in amortization and refinance borrowing limits will go into effect on March 18, 2011 and the change in insurance on home equity lines of credit will go into effect on April 18, 2011.

Best of the Holiday Season to all!   Few lenders are being generous as well.  Generally fixed rates across the board went up last week at least .25%.   Big banks popular 5 yr. fixed rate now sitting just a smidge above 4% at 4.04%.   One lender, Desjardin Credit Union, has yet to raise their rate from 3.79% though.  Perhaps extending xmas good cheer!   Actually they are still offering a 3.59% five year rate til end of year but if considering that one is cutting things very short.    Another lender in broker channel, Merix Financial, offering a good 5 yr. fixed deal into new year at rate of 3.89%.

How bout the adjustable / variable rate mortgage?   Well good news on that front as Novemeber’s inflation #s came in this week and core inflation ( excluding volatile items such as energy ) dropped a little from Oct. to 1.4%.  This is a full .6% below Bank of Canada’s target of 2% so adds further thought that Mark Carney will hold off on next rate hike til summer of 2011.

Best variable rate on high ratio mortgages currently .80% below prime.  On conventional mortgages, downpayment 20% or greater, best offer now .75% below.   So with prime at 3% that is mortgage rates at 2.20% or 2.25%.   Very inexpensive.  Historic lows!

Ho ho ho!!!!

Once again fixed rates are trickling upwards.  Popular 5 yr. fixed rate eclipsing 4% with major banks with TD first to move to a rate of 4.04%.  No reason to panic if in variable/adjustable rate mortgage though.   No talk of any change in Prime Rate til perhaps spring or summer 2011.  Most products still in lower to mid 2% range so room to spare.  Just keeping people informed.   Prime minus .80% available with a few specials. 

5 year fixed rate been in historic 3 % range so long seems kinda significant going above 4%.  Yet in perspective, 4.04% still extremely low low rate.  

If any questions please feel free to contact us at Buyingblock.com at anytime. 

Further bond activity now suggesting good chance short term rates may go up sooner than later with March 2011 possiblity.   Fixed rates jumped over the last few weeks roughly a 1/4 point.   Best five year offer in broker channel currently 3.54% and adjustable / variables still in low 2 % range at 2.20-2.30% depending on lender.  3 and 5 year terms available.   If any rate ?s please feel to contact Buyingblock.com .   

Hello all, appears bond market is heating up due to U.S.’s new round of Quantative Easing and debt problems in Ireland and other parts of Europe.  Some of big banks have raised rates a quarter percent on popular five year fixed rate product.  Still super deals around.  Five year fixed as low as 3.39% on quick close specials or 3.49% which can be held for up to 120 days.   Good time to get preapproval! 

Variable / adjustable rates still below 3% with discounts as low as .80% below prime.  Some conditions apply.   Forecasts not calling for any change in prime rate. 

Fixed rates falling again as bond yields shift.   Big banks as low as 3.59% on a 5 year term while broker channel has mortgage lenders down to 3.49% .  Historic lows!  

Variable rate mortgages still attractive even with prime increases.  Discount below prime as great as .80%, which nets out to 2.20% based on prime rate today.   Much thought Bank of Canada will be sitting on sidelines with upcoming rate announcements as employment #s were not promising last month. 

In mortgage industry news, TD Canada Trust has come out with a new strategy to keep their clients — or as some have described it : hand cuff them.   Starting in Oct. they will be registering mortgages with a collateral charge at 125% of property value instead of regular mortgage charge set at actual mortgage amount.   While this will allow one easier access to refinance with TD without need of legals and re-registeration of higher mortgage if home value does appreciate, it does negate chance of shopping around for best rate when term expires since collateral charge mortgage is non transferable and must be paid in full before being discharged.  So while future flexibility might seem attractive, the lack of choice down the road could force you into a higher rate TD mortgage and cost you thousands in interest. 

For instance, a $300K mortgage at TD’s rate of 3.59% would have interest costs of $49,990.65 over 5 years with an amortization of 25 years.  If one were to shop around and get a .10% discount on their rate, interest costs would drop to $48,566.21, over $1400 less.  Compare that to the cost of refinance with lawyers or Land Tranfer company at only around $600-$700 and one can see you are much better off having the flexibility to change lenders for lower rate.

Remember it is not just when you purchase your home that one should shop around for best rates.  On renewals one is often able to save money since financial institutions low ball their renewal offers in the hope that current customers will be lazy and accept what is offered.

Bank of Canada has raised the prime rate again his month but fortunately the discounts lenders are offering on Adjustable and Variable Rate products has increased which has negated the rise for those entering the housing market.   And fixed rates continue to fall and hover near historical lows.  Three year fixed rate as low as 2.9%.  Five year term just below 3.60%!   

So with these increased discounts on floating rates and fixed rates at an all time lows now is a good time to consolidate any high interest debt products into a secured mortgage.  Recent stats have mentioned that Canadians are at their highest debt load ever, second only to the U.S. out of all the G7 countries.  In the second quarter of 2010 the average amount of debt carried by Canadians was about 20 per cent of the value of everything they owned, compared to about 26 per cent for the U.S. in the first quarter in 2010.  Debt included mortgages, credit cards and lines of credit and the assets measured included homes, cars and financial assets.

Statistics Canada recently reported that in the second quarter of 2010 Canadians had racked up $1.48 trillion in household debt, up 6.9 per cent or an increase of $96 billion from the same time last year.  The same day the Canadian Payroll Association said that 59 per cent of Canadians are stretching their pay to the limit and expect they would be in financial difficulty if their pay was cut or delayed by one week.

If you have some debt outside of your mortgage that you think you should consolidate, or would even like Buyingblock to review things for you, please contact us and let us try to put these historic low rates to work for you. 

Mark Carney and Bank of Canada raised key lending rate another 1/4 point this week raising consumer Bank Prime to 3%.  This will make variable and adjustable rate mortgages more expensive.   That is the bad news.  Good news is that discounts below prime on variable and adjustable rate mortgages are improving.   Now possible to obtain discounts as great as .70% below prime.   That nets out to 2.3% which is still historically low interest rate.   Fixed rates have fallen again to levels of last year post credit meltsdown.  Five year fixed term available on quick close special at rate of 3.60%.   120 day rate hold available with rate of 3.69%.  

As the housing market in Canada continues to show signs of cooling off, mortgage lenders try to heat things up by dropping fixed rates some.  Now available on 5 year fixed terms as quick close specials or with limited prepayment options : 3.79% and 3.84%.   So rates are again near the historic lows of 2009!   Variable and adjustable rate mortgages continue to hover just over 2% with Bank of Canada meeting in early Sept. for next rate announcment.   Speculation in market is for Mark Carney to hold rates steady as opposed to raising another 1/4 point as was expeceted only a few weeks ago.  Housing market concerns and continued slow down of US economy main factors. 

Contact www.Buyingblock.com with any mortgage or housing questions. 

Michael Pezzack