When choosing a mortgage, you want advice that you can count on. As a member of one of Canada’s longest established national broker networks, Our Brokers are dedicated to providing you with all the information you need to make a well-informed decision on your mortgage financing needs. We’re updated with knowledge of the current market trends, rates, and regulations regularly, allowing us to provide you with sound guidance.
More lenders are now offering a wider range of mortgages to choose from. Consumers have begun to shop around for their mortgage rather than simply taking what their financial institution offers. Lenders have started advertising discounted rates, making it obvious that there’s a good reason to shop around. But the biggest reason for the increasing reliance on a mortgage broker is that we can offer you several important advantages:
- Independent, unbiased advice. As mortgage brokers, we provide mortgages from various lenders, so we’re not tied to one lender or one type of mortgage.
- More mortgage choices. Mortgage brokers have direct electronic access to virtually every major lender in Canada, so we can show you a wide range of rates and features.
- Best-available rates. We study the rates daily and always know where to find the most competitive ones. Plus we know how to negotiate with lenders to ensure you’re getting the best available deal.
- Fast, convenient local service. Mortgage brokers are highly motivated to keep your mortgage moving forward quickly because we only get paid – by the lender – when your mortgage is complete.
- Specialized knowledge. As mortgage professionals, we have a thorough understanding of all available products, features and rates. And we can explain everything to you so you know exactly what you’re getting into.
- Secure, established lenders. Mortgage brokers deal with the same reputable, established Canadian financial institutions you’re used to. Plus, we have access to some innovative broker-only lenders who offer even more attractive rates and features.
The Mortgage Centre became one of Canada’s first national mortgage broker organizations in 1989. I’m fully qualified to provide you with all of these benefits. Plus, we’re local business persons with roots in the community and a deep understanding of your local market.
Using a Mortgage Broker from The Mortgage Centre/Dico Holdings is by far your best mortgage option.
The latest policy announcement and monetary statement from the Bank of Canada amount to good news for mortgage borrowers. The Bank is holding its benchmark rate at 1% and has lowered expectations for economic growth.
The Bank is maintaining its stance that the next rate move will be up, but it is also indicating that isn’t likely to happen anytime soon. Reduced growth forecasts, increased slack in the economy and low inflation pressure have some market watchers putting off any rate hike as far as 2015.
There are also external factors that support the “lower for longer” view, in particular the lack of speed in the U.S. recovery and the new, extraordinary efforts by Japan to stimulate its economy. The Japanese moves play into international currency and bond markets where Canada is one of a shrinking number of safe havens. The BoC may be forced to use low interest rates to prevent the Loonie from becoming too strong.
Commentary provided by First National Financial LP
Everything is falling into place with one exception.
So far so good. Overall activity in the global economy continues to move in the right direction and global stock markets continue to react positively.
In the US, growth-related data continue to be relatively strong. Housing activity continues to surge, led by another strong gain in multi-family units. Housing starts were up by more than 80% annual rate in the fourth quarter. While the Fed will probably be willing to keep interest rates stable until 2015, it is likely that by spring, we will start hearing talks about downscaling the current pace of asset purchasing by the Fed ($85 billion a month). That will work as a negative for the long-end of the yield curve.
In Canada, everything is falling into place with one exception—the labour market. Looking at recent numbers suggest that the economy is slowing. Retail sales (ex-autos) are slowing and overall GDP is also showing signs of deceleration. The inflation numbers are softer than expected (with falling mortgage interest cost accounting for roughly half of the gap between market expectations and the actual figure). The only thing that does not fit into this picture is the robust employment numbers that show net monthly gain of more than 60,000 jobs. It is interesting that the Bank of Canada hardly mentioned the better than expected employment numbers in its recent communication to the market, suggesting that even the Bank is not convinced that these numbers are sustainable. In fact, it appears that the Bank is a bit more dovish regarding the momentum in the economy. At this point, our thinking is that the Bank will keep rates unchanged until early 2014.
Housing market activity projected to soften in the near-term
Benjamin Tal Deputy Chief Economist CIBC World Markets
House prices in Canada will probably fall in the coming year or two, but any comparison to the American market of 2006 reflects a deep misunderstanding of the credit landscapes of the pre-crash environment in the US and today’s Canadian market.
The Canadian housing market has more distinguishing attributes that separate it from the pre-crash US market. Yes, the debt-to-income ratio in Canada just broke the American record set in 2006, but comparing the three years heading into the US crash to the past three years in Canada reveals that the debt-to-income ratio in Canada has been rising at half the speed seen in the pre-crash US market.
Even more important than the amount of debt is its quality. The distribution of the credit score in Canada has not changed dramatically in the past four years. That is very different than the experience seen in the US in the four years heading into the recession.
In the US an astonishing one-third of mortgages taken out in 2005 and 2006 were in negative equity position, and more than half had less than 5% equity. In Canada, the negative equity position is nil, and only 15-20% of new originations have an equity position of less than 15%.
In a final analysis, not all is well in the Canadian housing market. Home prices are overshooting their fundamentals, mainly in large cities such as Toronto and Vancouver. The recent slowing in sales activity will probably be followed by price adjustments in many cities across the country. But the Canada of today is very different than a pre-recession US. Therefore, when it comes to jitters regarding a US-type meltdown here at home, the only thing we have to fear is fear itself.
The American consumer is starting to move in the right direction.
Benjamin Tal Deputy Chief Economist CIBC World Markets
First quarter US GDP was OK, but nothing to write home about. What's important, however, is that the American consumer is starting to move in the right direction. Will the bruised American consumer regain its traditional role as the main engine of America’s economic growth? We think so. An array of indicators suggests that consumers will build on recent momentum and will probably surprise the market with their regained resiliency.
In Europe, both the UK and Spain are now officially in a recession and once again the market gets nervous. While the European Central Bank will take its time to intervene, there are already some communications from the Bank that it will be willing to reintroduce its lending program if needed. The likelihood is that this kind of merry-go-round will dominate the European markets in the coming months.
Bank of Canada might start raising rates before the end of the year.
In Canada, the government is giving Canada’s banking regulator—The Office of the Superintendent of Financial Institutions—new authority to oversee Canadian Mortgage and Housing Corporation (CMHC). The government is also putting a stop to banks using mortgages insured by CMHC as collateral on covered bonds. We view these two developments as marginally negative to the mortgage market.
It appears that the Bank of Canada is turning hawkish again suggesting that it might start raising rates before the end of the year. Note that exactly a year ago, we were in the same situation when the Bank hinted even more strongly that it will start raising rates, but had to change its mind due to the increased global macro economic uncertainty. At this point the likelihood of a move before the end of the year is about 50%—but even if the Bank starts moving, say in the 4th quarter, it will be a very slow and hesitant move.