Mortgage Corner

Ten Things to Know About Prime & Your Mortgage

1. Fixed-rate mortgage holders are not affected by Bank of Canada rate changes during their current term. Only those in either adjustable-rate or variable-rate mortgages need read on 2. On July 12 lenders increased variable-rate borrowing costs by 0.25% to match the Bank of Canada increase of the same amount on the same day. 3. There are three more scheduled Bank of Canada meetings this year, and there remains doubt about any further increases this year. Few expect anything more than a 0.25% further increase 4. This was the first increase to Prime in nearly seven years, and it follows...

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Is My Mortgage Portable?

The question: ‘Is my mortgage portable?’ The answer most often given: ‘Yes.’ This answer is increasingly wrong. In reality, you may qualify to move 80% or less of the current balance. The proper question: ‘Do I need to re-qualify for my current mortgage to move to a new home?’ The proper answer: ‘Yes, your mortgage is portable, but only if you re-qualify under today’s new and more stringent guidelines.’ Who is the very best person to answer the portability question? Your mortgage broker. They will answer this question accurately. And it can only be answered...

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A Mortgage Pre-Approval – It’s Not What You’d Expect It To Be

Although going through the pre-approval process is more important than ever, the actual term ‘pre-approval’ is often misleading. It really addresses just a few variables that may arise once in the middle of an actual offer. The pressure in many markets has never been greater to write a condition-free offer, yet due to recent changes to lending guidelines by the federal government, the importance of a clause in the contract along the lines of ‘subject to receiving and approving satisfactory financing’ has also never been greater. (There are variations to be discussed with your Realtor...

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What About My Mortgage Pre-Approval?

Although going through the pre-approval process is important, the actual term ‘pre-approval’ is often misunderstood. An important point to be clear on is that while you may be pre-approved for a certain mortgage amount, there are several variables that can derail a final approval once you write an offer on a property. As such it is imperative that offers include a condition (or ‘subject’) clause along the lines of ‘subject to receiving and approving satisfactory financing’. This is arguably the single most important clause in a contract (an inspection being a close second), because...

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Residential Mortgage Rates as of April 4, 2017

Term Fixed Closed Rate 6 months 3.95% 1 Year 2.29% 2 Year 2.09% 3 Year 2.34% 4 Year 2.49% 5 Year 2.39% 7 Year 2.98% 10 Year 3.89% Prime = 2.70% Variable Closed (5 yr) = Prime minus 0.70% = 2.00% Variable Open = Prime plus 0.80% = 3.50% Secured Credit Lines = Prime plus 0.50%   Courtesy of John Chrisanthidis, Mortgage Intelligence

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Bank of Canada Maintains Rate

It is no surprise to anyone that the Bank of Canada maintained its target overnight rate at 1/2 percent yesterday, judging that although the global economy has strengthened, uncertainty continues and is damaging business confidence and dampening investment in Canada's major trading partners. Since the Trump victory, US interest rates have risen sharply with the expectation of sizable fiscal stimulus. Stock markets in the US have risen to record highs and the TSX has enjoyed a huge upsurge reflecting a sharp rise in bank stocks--up more than 20 percent this year. Canadian interest rates have...

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Lengthening Your Amortization Can Allow Financial Flexibility

There are two types of amortizations: the paper, and the effective. The paper amortization is the number written on your initial mortgage payment contract, and the effective amortization is the actual, real-world version of your payments. These two numbers can significantly vary over time. It is worth considering setting, or re-setting at renewal or refinance time, the paper amortization to the maximum possible time-frame. This is typically 30 years in conventional financing or 25 years in high-ratio financing, with the latter being defined as a purchase with less than 20% down. Now, although...

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Residential Mortgage Rates as of November 2, 2016

Term Fixed Closed Rate 6 months 3.95% 1 Year 2.29% 2 Year 2.09% 3 Year 2.34% 4 Year 2.49% 5 Year 2.29% 7 Year 2.98% 10 Year 3.89% Prime = 2.70% Variable Closed (5 yr) = Prime minus 0.50% = 2.20% Variable Open = Prime plus 0.80% = 3.50% Secured Credit Lines = Prime plus 0.50%   Courtesy of John Chrisanthidis, Mortgage Intelligence

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Does Breaking Your Mortgage Make Sense?

With mortgage rates settling at historic lows, chances are you’ve considered breaking your current mortgage and renewing or refinancing now before rates begin to rise. Perhaps you want to free up cash for such things as renovations, travel or putting towards your children’s education? Or maybe you want to pay down debt or simply pay your mortgage off faster? In some cases, the penalty can be quite substantial if you aren’t very far into your mortgage term, but your mortgage professional can determine if breaking your mortgage now will benefit you long term. People often assume the penalty...

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The Skinny on Canada’s New Mortgage Rules

Earlier this week, Ottawa unveiled major initiatives to slow housing activity both by potentially discouraging foreign home purchases and, more importantly, by making it more difficult for Canadians to get mortgages. As well, the Finance Minister is limiting the degree to which mortgage lenders can buy portfolio insurance on mortgages with downpayments of 20% or more. Ottawa has clearly taken out the big guns to slow housing activity, which is widely considered to be too strong in Vancouver and Toronto. Ironically, home sales have already slowed precipitously in Vancouver in recent months and the BC government...

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