No Change-No Surprise
The Bank of Canada is maintaining the “overnight rate” at its current level. It’s no surprise and conventional wisdom sees short term rates will remain unchanged for some time yet in face of weak Global and Canadian economic growth. Right in step with economic weakness is a pull-back in longer term rates.
There has been slight drop in the Canada Bond yields which has been feeding the Spring mortgage market with some aggressive rates. Interestingly, the Banks are reaping headlines with 5 year rates below 3.0%, while Mortgage Brokers are able to offer their clients rates as low as 2.84% (as at June 4, 2014).
Best Rate Not Always The Best Mortgage
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.
Following an increase in CMHC Mortgage Loan Insurance Premiums by an average 15% on May 1st, 2014, the corporation announced additional changes to their mortgage insurance program–effective May 31, 2014. The ultimate effect on housing markets remains to be seen.
CMHC Premium Increases
||Standard Premium (Current)
||Standard Premium (Effective May 1st, 2014)
|Up to and including 65%
|Up to and including 75%
|Up to and including 80%
|Up to and including 85%
|Up to and including 90%
|Up to and including 95%
|90.01% to 95% – Non-Traditional Down Payment
CMHC Program Changes effective May 31st
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
Wow, a couple of weeks off for vacation and fixed rates have increased as much as 1/2% by some lenders. Rates though, are still historically low. However, the last few weeks have been a good lesson for all of us as to how fast rates can change. We appear to be in a rate increasing environment and our advice continues to be, “STAY SAFE!”
Here are a few mortgage related news items to peak your interest: Continue reading
Bond yields are continuing to rise globally since the Fed mentioned an imminent exit from its bond purchasing program last week. The US Federal Reserve set off a dramatic spike in US borrowing costs last week after indicating a beginning withdrawal from their quantitative easing program.
This will most likely translate into higher fixed mortgage rates across the board – a continuation of last week’s rate increases. Continue reading