Market Commentary provided by First National Financial LP
To cut, or not to cut? That is the big question for the Bank of Canada this week.
More and more market watchers are expecting another drop when the central bank sets its policy rate this week. Right now a little more than half believe we will see the overnight rate trimmed by a quarter point to 0.25%.
It sounds like good news for those with variable-rate or hybrid mortgages, but many observers, including those who expect to see a cut, are calling it a bad idea.
Key concerns include:
- Adding more heat to the housing market, especially in Vancouver and Toronto.
- Adding more imbalance to the, already out of whack, household debt-to-income ratio.
Further undermining the value of the loonie. That would immediately reduce consumer purchasing power while offering minimal benefits to the export sector which is battling slow growth in the global economy.
Almost always, when rates are offered at substantial discount to the norm, you should be aware that restrictions and special conditions may apply. That’s where the value of a Mortgage Broker works in your favour.
Not only will a good Mortgage Broker find you the best interest rates in the market, but with knowledge and expertise about available products in the market, he can save you cost over the long term. Mortgage borrowers faced with high penalties, mortgage portability issues, limited pre-payment options, conversion restrictions and lender fees could end up paying a lot more with a “low rate discounted mortgage” than with a flexible mortgage product with a slightly higher rate.
Our advice? Think long term when you make that mortgage decision. Know what you are getting into before you sign.
Rates first…Prime interest rate remains stable and recent Fixed Rate decreases have seen our lowest 5 Year Fixed Rate down to 3.45%. Some “Experts” are now predicting that we could even see further declines in interest rates.
Now with interest rates out of the way, HAVE YOU THOUGHT ABOUT…your involvement in your local cultural activities?
What IS the connection with business and the arts? Our firm has recently become involved with the Kamloops Symphony Orchestra with one of our staff as a member of the Board. We’re slowly acquiring a greater appreciation for the role of Orchestral and Classical Arts in our community. Why? Perhaps the quotes of some interesting people can explain.. Continue reading
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 Mortgage West-The Mortgage Centre 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