Mortgage Blog
Get the mortgage facts - don't "zone out"!
March 4, 2010 by Gordon McCallum
I happened to come across a very interesting article about mortgages and how most Canadians completely tune-out the important details of their mortgage.
Everyone seems to want to know the interest-rate, because that’s the score-card I guess, but beyond that most people don’t seem to care or appreciate the finer points, things like:
- Amortization period
- Pre-payment privileges
- Accelerated payment options
- Early repayment penalties
- Assumability
- Portability
- Bona-fide sales clauses
- etc.
There is a lot of fine print out there folks, so I’m not going to be bashful about this: If there’s something you don’t understand or ...
Read more »Why the Bank of Canada Didn't Raise Rates Today
March 2, 2010 by Gordon McCallum
No surprise this morning from the Bank of Canada, which I had earlier predicted.
The main reasons cited for not increasing rates are:
1. Risks of inflation are “roughly balanced”.
2. The high Canadian dollar and soft demand from the U.S. are slowing down economic growth in Canada (despite a very strong 5% growth in GDP in Q4 last year)
3. They’re waiting until July just like they said they would.
4. It’s still too soon. If the BoC raises rates before July then it’s possible people and markets will overreact. I think stability and predictability ...
Why the Bank of Canada Won't Raise Rates Tomorrow
March 1, 2010 by Gordon McCallum
Mirror, mirror, on the wall! Who’s got the clearest crystal ball?
(I doubt it’s me, but here goes)
The Bank of Canada is not going to raise rates tomorrow. Not just because I say so. Or because the Financial Post says so , but for a few other key reasons:
1. The Bank of Canada said they wouldn’t
2. Our economy is recovering, but emotionally we’re far too scarred from the recession to handle a nasty surprise.
3. Canadian Bond Yields, which are market driven, haven’t gone up in anticipation of a move. They always go ...
Read more »Interest Rate Update Feb 18 2010
February 18, 2010 by Gordon McCallum
Now that the federal government has made some changes to the mortgage qualification rules it seems to have created more certainty in the mortgage world, so we’re seeing some pricing changes from some of our lenders.
You can see all the latest Edmonton and Calgary mortgage rates here but the big ones everyone wants to know about are:
1 year fixed: 2.37%
5 year fixed: 3.69%
5 year Adjustable Rate Mortgage (or variable, if you prefer): Prime -.40% = 1.85%
7 year fixed: 4.95% – for those of you who really want to be conservative at a ...
New Canadian Mortgage Rules
February 14, 2010 by Gordon McCallum
Wow – a very exciting morning to say the least. The mortgage and housing industries are abuzz with news from Finance Minister Jim Flaherty about new mortgage rules in Canada.
As a quick summary, here are the new rules:
1. First-time buyers need to pass a new qualification test: can you afford this home at the 5-year fixed rate?
The basic premise here is that some first-time buyers choose a variable or adjustable interest rate which floats, or a shorter term fixed rate that will need to be reset once the term is up. The danger there is for first-time buyers ...
Read more »Canadian Mortgage Awards 2010 Finalists!
February 12, 2010 by Gordon McCallum
We’re very honoured and humbled to once again be finalists for the CMP Magazine Canadian Mortgage Awards 2010.
First Foundation is a finalist for “Top Internet Presence” and Lisa Perrot, one of our outstanding Mortgage Associates is a finalist for “Best Newcomer”. We’re very proud of her!
Last year we had the pleasure of being finalists for the “Best Customer Service” award presented by Merix Financial. While we didn’t win, we certainly enjoyed ourselves and were honoured to be amongst so many other great brokers.
Congratulations to all the other finalists this year and we look forward ...
Read more »Housing Bubble and Mortgage Policy Controversy
February 12, 2010 by Gordon McCallum
The last week or so has seen a huge increase in the number of articles being written about mortgage policies in Canada. Everyone seems to have an opinion on everything from government policy, CMHC policy (these are not necessarily the same thing), bank lending policies, whether we’re in a housing bubble, not in a housing bubble, or on the verge of a housing bubble, and whether or not we’re headed for US-style mortgage and housing meltdown.
So? Any thoughts?
I’ll try to present as many of the better arguments below, but first, I thought I’d give ...
Read more »7 Year Fixed Below 5 Percent
February 12, 2010 by Gordon McCallum
For the first time in quite awhile we’ve just had a lender (TD Canada Trust) drop their 7 year fixed rate below 5 percent, at 4.95%. The 10 year rate also went down to 5.20%.
If you’re skeptical about rates and think they’ll go up big-time with inflation pressures as the economy recovers, then this may be a good choice for you.
Frankly it’s still a big premium to pay over a 5 year fixed at 3.69% but for those who really want long-term security and are willing to pay, it could be ...
Read more »Canadian Mortgage Lessons for America
January 25, 2010 by Gordon McCallum
I just read a great analaysis by the Financial Times by Robert Pozen of the key differences between the Canadian and US housing markets.
Pozen gets into the three main differences between the two systems, which he contends are the largest reasons why the Canadian real estate market has stayed relatively strong when compared to the utter collapse of real estate markets in many US States.
The three biggest differences, according to Pozen are as follows:
1. Canadian lenders require at least 5% down, and often more, in order to purchase a home. (I guess nobody told him that lenders ...
Read more »Bank of Canada Rate Likely to Remain Unchanged
January 17, 2010 by Gordon McCallum
Most analysts are predicting that the Bank of Canada’s announcement tomorrow, Tuesday January 19th, 2010, will signal that things are improving but reiterate it’s previous commitment to keeping the overnight rate at it’s current .25%.
iMarketnews.com has a story about the Bank of Canada’s likely decision that includes some very interesting quotes, such as:
- Inevitably, the Bank will start to increase its rate, but not soon, most believe. That likely will happen “sometime this year,” says Eric Lascelles, chief rates strategist for TED Securities. However, he adds, “it is simply premature for the fireworks to ...
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