Category Archives: Blog

How Low Can Mortgage Rates Go?

5 year fixed mortgage rates are once again in record low territory.  Does this mean that we’re at the bottom of the market and that there’s nowhere to go but up?  Apparently not.  5 year fixed mortgage rates are typically set 1.50% higher than the mortgage lender’s cost of funds.  They need the 1.50% margin to cover their operating costs and earn some profit.  Theoretically then the lowest 5 year … Read More

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Stop The Mortgage Rate Rhetoric

For well over a year now Jim Flaherty and Mark Carney have been singing to the same tune.  Mortgage rates will be rising and homeowners need to prepare themselves for increased payments.  Flaherty, Canada’s federal finance minister has recently tightened mortgage rules 3 times and has added an artificially high qualifying mortgage rate for anyone interested in a variable mortgage rate.  Carney, governor of the bank of Canada (BOC), has … Read More

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Record Low Mortgage Rates

To the Canadian public mortgage rates hit their all-time low earlier this year when BMO announced their 2.99% 5 year Low Rate Mortgage.  The public could hardly not notice.  It’s not every day that a bank treats a mortgage rate change like a product release.  The strategy worked brilliantly and word spread like wildfire.  Industry insiders, meanwhile, rolled their eyes at the offer. The 5 year 2.99% mortgage rate came … Read More

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Home Prices Still Rising

Canadian real estate prices grew at an annual rate of 5.2% in April, according to the Canadian Real Estate Association (CREA).  Some refer to this as moderate growth while others scratch their heads and keep wondering when that 10% correction will come into play.  The problem with the bubble believers is that they’re ignoring the strong housing market fundamentals. The statistics suggest that Toronto’s real estate prices are catching up … Read More

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BMO’s 2.99% Mortgage Rate “Banks” Profits

Bank of Montreal (BMO) was the first of the major banks to release second quarter earnings.  The 4th largest Canadian bank had an impressive 27% increase in net income for the quarter.  However when you dig into the numbers, cost cutting was a major contributor and profit margins were notably lower.  One of the reasons cited for the lower margins was the deep discounted 5 year fixed mortgage rate at … Read More

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RBC Cuts Theoretical Mortgage Rate

The Royal Bank of Canada announced yesterday that it’s lowering its 5 year fixed mortgage rate by 0.10 effective Thursday May 24th.  The new mortgage rate is, get ready for it, 5.34%!  I find it hard to believe that there are people out there who still actually accept bank posted mortgage rates.  I guess they’re the same people who pay sticker price at the car dealership.  The RBC announced lower … Read More

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Raising Prime Rate Now, Dumb

The Organization for Economic Co-operation and Development (OECD) issued a statement Tuesday suggesting that the Canadian government isn’t doing near enough to cool the hot housing market.  They are suggesting that the Bank of Canada (BOC) should raise the overnight lending rate from its current position of 1% to 2.25% by the end of this year.  The impact on the prime rate would likely be an increase to 4.25% from … Read More

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Rural Real Estate Mortgages

You may have all the credentials that mortgage lenders are looking for, but you are only half the picture.  Your home is the collateral that will secure your mortgage and mortgage lenders will take a good look at your real estate before advancing any money.  The best real estate for mortgage lenders is a “cookie cutter” house in an urban or suburban neighbourhood where the houses are similar.  These types … Read More

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BMO’s Mortgage Spin Doctors at Work

It’s amazing how a little spin can turn a constraint into a marketing tool.  Bank of Montreal’s (BMO’s) “Low Rate Mortgage” comes with some fine print, and one of the least offensive of these is a maximum amortization of 25 years.  Most other mortgages offer the flexibility to go to 30 years, although you have the choice to set it much lower if you want.  Not a big deal, but … Read More

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Monthly or Bi-Weekly Mortgage Payments?

So you’ve been approved for your mortgage, and have chosen your term and amortization.  Now it’s time to pick your payment frequency; monthly, semi-monthly, weekly or bi-weekly.  Most people are aware that there are advantages to paying your mortgage on a bi-weekly basis, but aren’t quite sure why. One perception is that by paying bi-weekly you are making more frequent payments so less interest will accumulate.  While this is true, … Read More

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