Mortgage Intelligence

Oshawa's Mortgage News Desk!


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After the rate hike, what’s next?

On July 12th, for the first time in seven years, the Bank of Canada increased the overnight rate by .25%, withdrawing some of the stimulus that was needed after the oil price collapse and 2008 financial crisis. Variable rate mortgages and lines of credit will see higher rates and modest payment increases. Fixed-rate mortgage – which are based on the bond market – had already been trending slightly upward, although if you have a fixed mortgage, you aren’t affected until it’s time to renew. Keep in mind that this is a very small increase, and we’re still in an ultra-low rate environment and an incredibly stable market. We’ve also seen increases before to only see them decrease again. But rates have risen, so here are answers to the questions we’re getting:

Should I jump into the market now?  Actually, our advice is always the same: buy when you are financially ready. Don’t jump the gun just because rates “may” go higher.  But by all means, if you’re thinking about buying, we can arrange a pre-approval so you’re protected from rate increases while you shop around.

Should I lock in my variable rate mortgage ASAP? That depends. Your new rate with the hike is probably still less than current 5-year fixed rates, and you’ll still likely pay less if there is another .25% increase. So why pay more money than you have to? Stick with your original strategy of focusing on payment vs. rate. But if it’s going to keep you awake at night – or the few extra dollars are hard to find in your budget – then let’s talk about your conversion options. Remember though, you should be confident you’ll stay in a 5-year fixed mortgage for the full term. Breaking a fixed mortgage can result in some tough penalties.

What if my mortgage is coming up for renewal? Don’t feel rushed or pressured by a renewal letter or call. Let’s discuss your options. We’ll review your renewal offer together and we’ll shop around to see if it’s really the best deal available. Got too much other debt? This may be the time to roll it into a new mortgage to boost cash flow and save on interest costs.

Should we talk? Yes for sure. You should have confidence in your mortgage plan and that’s why professional mortgage advice is so critical.  We have access to a wide range of lenders and know the right questions to ask to assess your situation and make sure you have the best mortgage strategy. Contact the team at MiMortgage.ca at 1 866 452-1100 to speak to an expert or apply online now!

 


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How High Can They Go?

 Today’s Announcement by the Bank of Canada will do nothing to keep the rising prices at bay.

GTA Home SalesHome Sellers in Toronto aren’t complaining about the ongoing increase in prices in the GTA according to The Globe and Mail, as a matter of fact prices are up 115 over the same time last year. The fact is its tougher for Home Buyers with homes being so much less affordable. TREB also notes that the volume of home sales have increased over last year with the GTA Condo Market continuing to demonstrate strong sales. Low interest rates are likely the thing prompting buyers to take part in such a high priced marketplace. With recent reports indicating that a soft economy will cause the Bank of Canada to hold rates until well into 2015 we will have to see if the prices will continue their climb. Get a same day pre-approval, apply now.


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US Government Shutdown Creates Lower Interest Rates In Canada

Canadians Benefit From The Stalemate South Of The Border.

Nervous investors are looking at Bonds as a safer place for their investments and when they buy more of them that drives down the price. The net effect for us is that if Bond yields are down generally fixed interest rates follow.

We’ve seen historically low rates for almost 3 years now and the US Government shutdown is likely going to create an environment of continued concern, therefore continued lower borrowing rates for Canadians.

As in the past few years the prospect of lower rates means higher housing prices so lets not jump for joy just yet!  When the Finance Minister  Jim Flaherty thought housing was too expensive in the past several years, he made it harder to qualify for a mortgage in Canada. Every silver lining seems to have its cloud.

Lower Interest rates

See the full article on the Huffington Post site.

How do you feel the tightening of mortgage guidelines has affected your ability to buy a home?