Tag Archive for: Mortgage rates

It’s NOT always about the rate!

Marketing people are clever. They know that we will be attracted by the shiny object, the sexy supermodel or the fancy headline. This is why car companies still market cars based on their 0-60 times or their range for the electric vehicles. When all that really should matter is their reliability, safety and that there is a robust charging network for the electric vehicles. 

People use to sell office photocopiers based on speeds and feeds. Computers used to be advertised based on the gigahertz of the processor. When all that really mattered was that it printed or faxed your documents and ran your necessary programs to get your work done.

Mortgates are no different. Watching a few minutes of the Leaf’s hockey game last night I saw an advertisement for one of the new national players in the mortgage space and it was just based on rate. While we all have access to similar low rates, the sad part is that not everyone qualifies for the lowest advertised rate.

The things that impact your rate will be but are not limited to your credit, type of income, size of down payment, amortization, type and location of property and debt service ratio’s. If you have had credit issues in the past and all you see online or on the TV are the lowest advertised rates, then you may end up being disappointed when it comes time to apply for a mortgage.

Sometimes getting your mortgage approved and funded so that you have a roof over your head is more important than the actual rate. As someone who has been a broker for over 21 years now, I never sell or market on rate but always try to get the most competitive rate and terms for each client. 

In the end, it’s not about the rate. It’s about finding a mortgage that fits your unique situation and allows you to achieve your goals, whether that be owning a home or investing in real estate. So, don’t be fooled by shiny advertisements or low rates that may not apply to you. Work with a mortgage broker who will take the time to understand your needs and find the best solution for you.

Today I am thankful for finding options for clients when sources that we wanted to go with said no, that the conversation about rate is always an opportunity to discover what is most important to the client and that variety of clients realy is the spice of life.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Changing Rates Again

Bond yields increased again yesterday so therefor the fixed mortgage rates on which they are based also increased. If you are putting down less then 20% your 5 year fixed AAA rate is now 3.84% which is up by .05 basis points since last week. However if you are putting down 20% or more your AAA rate is now at least 4.09%.

The prime rate on the other hand is still 2.70%, and most lenders are offering discounts of prime less .90% now where last week they were offering discounts of up to prime less 1.10. So if you have a variable rate or are pre approved on a variable rate take note that the bank of Canada meets next on April 13th to announce the next change to the over night lending rate which will then change the prime rate. The prediction is that it will go up by .50% to 3.20%.

To put it in a little bit of perspective the last time that we had rates in the mid to high 3% range was in November and December of 2018. When the 5 year fixed rate got up to 3.69% for two months before going back down slowly. Then with the onset of the Pandemic in 2020 the 5 year fixed rates bottomed out at 1.79%. However bond yields are up due to inflation levels that we have not seen in 30 years and the instability of the War in Ukraine is not helping calm things down much either.

My role as your advisor is to give you the best advice so you can make a knowledgable decision about what to do about your mortgage. There are pro’s and con’s to all the options, it is best to chose the option that will allow you to comfortably sleep at night. Ask me and I will tell you the facts about the 5 year fixed vs the variable vs the short term 1 year fixed. Ask as many questions as you want as this is an important decision to make.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

The rate game

When the first thing that you talk about with clients is rate, then you have just limited yourself to being a rate broker. I told another broker on our national facebook group that if you do this you have to be prepared to live by the sword and die by the sword.

Actually rate will not dictate your final payment as much as amortization. If you are buying with 20% down or more you have the choice to extend your amortization out to 30 years. This is also available if you are refinancing. Doing this will help lower your overall monthly payments as well.

There is more to a great mortgage than just the rate. You need to consider flexibility like pre payments privilages, portability, and potential penalty to break the contract.

Today I am thankful for the slower pace on the weekends, being able to take a nap and still get what I want done accomplished and it was cool and crisp for an early morning run.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Ides Of March

Unless you are Julius Caesar you have nothing to fear about the Ides of March. Before Brutus and Cassius made March 15th infamous it was notable for several Roman religious observances. Notable of which was the feast of Anna Perenna the goddess of the year, which people commonly gathered for picnic’s, drinking and revelry.

However one of the lesser know facts about today was that it was also the deadline for settling debts. Speaking of debts how are you making out with yours? Are you settling your debts every month or are you just treading water making the minimum payments. As a homeowner, there is no better time than now to look at combining all your debts into one payment.

Some of the benefits of refinancing and consolidating your debts using your home equity is that you will get access to much lower interest rates. By paying off high interest loans and keeping them paid off you will improve your credit rating. You can apply the snowball method by using your savings from the refinance and put that towards your mortgage payments and thus become debt free so much faster. Here is a link for a great snowball calculator.

Contact my office and we can work out some numbers to see if it is worthwhile for you.

I look forward to hearing from you in regard to your mortgage needs.

Pat

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

Peaks and Valleys

There are seasons to the year just like there are peaks and valleys to your life. If you are like many where the last year with the pandemic was challenging for you both personally as well as financially then you should now be starting to pick up steam and make improvements to many areas of your life. I know that it is that way for me. Just know that the bad times never last forever, and that the one thing constant in life is change. Like my great Mother use to say, ” weather and your underwear are things that change on a constant basis”.

Now since I am in the mortgage business this is how it relates to my field. If you have been listening to the news you may have heard reports that mortgage rates are rising. While that is true, it is also not. Let me explain. Five year fixed mortgages rates have started to move upwards over the past two weeks. However variable rates have not changed. You see the fixed rates are based on bond yields which have been rising thus changing the five year mortgage rates. The variable rates on the other hand are based on the Bank Of Canada prime lending rate, which as they have announced today is not being changed.

So even though the fixed rate payment will be set for the term of your mortgage, you will end up paying less and have a lower penalty to break with the variable. I am here for you if you have any questions but variable is looking like the best way to go. So if your current lender is calling you asking if you wanted to lock into a fixed rate, DON’T DO IT!

“Remember that our problems come in waves, but so do the solutions” Tony Robbins

I look forward to hearing from you in regard to your mortgage needs.

Pat

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

Take your pick!

The worst kinds of calls to get as a mortgage broker is when someone calls and asks for your best 5 year fixed rate. My answer typically is that it depends. Although I know what the rock bottom 5 year fixed rate is for that particular day, there is no guarantee that is what they will get.

You see after 30 seconds of being on the phone with someone I don’t know their credit, weather they are buying or refinancing, if the transaction would be high ratio or not and if they are self employed and require a stated income mortgage. All these things are required to determine what rate you will eventually receive.

Judging a mortgage by it’s rate is like shopping for a vehicle based solely on the horsepower. There is so much more to consider. This is why when working with a client I need all the documents upfront upon application so we can together find the best mortgage product that meets their needs.

The best rate comes with the best product that meets my clients particular needs at this particular time in their life. Sometimes is 12% , or 4.99% or even better 1.54%. Every situation is different so it’s best to get to know you so together we can find what works best.

I look forward to hearing from you in regards to your mortgage needs.

Pat

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).

Demystifying the 5 year fixed rate mortgage

If this title alone does not get you I don’t know what will. Most people opt for the 5 year fixed rate mortgage because of the security of knowing what your payment will be from month to month over the next 5 years. However how do you know if you got the best 5 year product. In case you did not know there is more than one out there.

Lender’s price their fixed rate products based on how long that they have to guarantee the rate. These rate guarantee’s range from 30 days all the way up to 120 days. So as a result the quicker you can close the more likely you will get the best rate in town.

Here are a few examples. Read more

To break or not to break?

Well that is the question. Wondering whether to break your current mortgage to take advantage of the lower rates that are currently offered. Well here is an example that you can apply to your situation to see if now is a good time to take advantage of the lower rates.

Interest Rate Differentials (IRD)

Often a client needs an “idea” of how much their existing mortgage penalty might be before he decides to refinance or do an “early switch” with pre-payment penalty.

If the penalty is based on a rate differential, here is a BASIC calculation to figure out a close amount…..

Based on a:

$200,000 with 3 years remaining on a 5 year term of 5.70%….

…because there are 3 years remaining, the current 3 year rate is used to calculate the differential.

If the lenders current 3 year rate is 4%, there is a difference of 1.7%. Because there’s still 3 years left, the principal is also multiplied by 3

$200,000        x      1.7%      x       3     =       $10,200 penalty

(remaining principle)(Difference btw rates) (# yrs remaining)

**This is an estimate and will change every time rates change. If the differential increases, the penalty will also increase.

Now next you have to determine if the savings will exceed the penalty, and make the refinance worth while so here is another example. Interest rate in the before example is 5.7% and after is 3.99. Both with a 20 year amortization and a $2,400 annual tax bill included in with the mortgage payment, and house value of 400,000.

Before
After
Creditor
Balance
Payment
Creditor
Balance
Payment
Mortgage
$200,000
$1,590.89
Mortgage
$280,200
$1,681.02
Credit Line
$10,000
$300.00
Credit Line
0
0
Bank Loan
$20,000
$405.53
Bank Loan
0
0
Credit Cards
$40,000
$1,200.00
Credit Cards
0
0
Total Owing
$270,000
$3,496.42
Total Owing
$280,200
$1,891.65
Your Savings
$1,604.77

So as you can see in this case you will save $1,604.77 in monthly payments. Here is the big picture, by paying the $10,200 penalty, you will save $57,771.72 in payments over the next 3 years.

Please contact me for your personal analysis of your debts as every situation is different.

Cheers,

Pat

Thanks to Rachelle Gregory-Marshall my business development manager with Merix Financial for this great example of how to calculate our IRD penalties.

* Penalties in every mortgage are different. Please contact me to see if you are able to break with a lower penalty.

Rate decision

Bank of Canada leaves key rate unchanged

Malcolm Morrison, The Canadian Press

The Canadian dollar gave up early gains and moved lower after the Bank of Canada’s announced it was leaving interest rates unchanged and warned of the negative effects of a rising currency.

The loonie was 0.12 of a cent lower to 102.82 cents US after the central bank announced its decision to keep the key interest rate at one per cent.

The bank observed that the economic recovery in Canada is proceeding slightly faster than expected and that “while consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes.”

But the bank also warned that “the export sector continues to face considerable challenges from the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance.”

The currency is riding at a three-year high.

http://www.winnipegfreepress.com/business/breakingnews/canadian-dollar-up-traders-await-bank-of-canada-rate-announcement-117145598.html

Bank of Canada maintains overnight rate target at 1 per cent

OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding broadly in line with the Bank’s projection in its January Monetary Policy Report (MPR), although risks remain elevated.  U.S. activity is solidifying and remains supported by stimulative fiscal and monetary policies.  Ongoing challenges associated with sovereign and bank balance sheets will limit the pace of the European recovery and are a significant source of uncertainty to the global outlook. Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which could be further reinforced temporarily by supply shocks arising from recent geopolitical events.

The recovery in Canada is proceeding slightly faster than expected, and there is more evidence of the anticipated rebalancing of demand.  While consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes. Business investment continues to expand rapidly as companies take advantage of stimulative financial conditions and respond to competitive imperatives.  There is early evidence of a recovery in net exports, supported by stronger U.S. activity and global demand for commodities. However, the export sector continues to face considerable challenges from the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance.

While global inflationary pressures are rising, inflation in Canada has been consistent with the Bank’s expectations. Underlying pressures affecting prices remain subdued, reflecting the considerable slack in the economy.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

Information note:

The next scheduled date for announcing the overnight rate target is 12 April 2011. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 13 April 2011.

Committed?

Are you or should you be? To your goals that is. This hit me when one of my friends from the gym saw me today and commented that I must not be committed as I did not make it in for my regular workout time of 05h30 yesterday. My excuse was that one of our kids was up a few times over night. However excuses be gone, come hell or high water I will certainly be there for tomorrow.

When you think about it, are you committed to the successful attainment of your goals? If you are not, or worse if you don’t have your goals written down ( shame on you if that is the  case) then you are just breathing and not really living.

If getting out of debt is your goal. Then you should write your goal like this, ” I am making X per month or year” rather than ” I am paying off my debt”. When you include what you do not want in your goals, you end of thinking of what you do not want. See your self as already having acheived your goal, feel it and live it.

Want help in creating your plan? Then feel free to give me a call, I would be glad to help you.

Cheers,

Pat

p.s- You can find me on Twitter,Linkedin, Facebookand friendfeed.