Tag Archives: Fixed Mortgage Rates

Fixed Mortgage Rate Forecast – August 2014

Fixed mortgage rate forecasts over the past few years have been fairly consistent in forecasting continued low mortgage rates in the near term with some upward pressure expected in medium term.  A historical look at the last 12 months however reveals a different reality.  Mortgage rates and the bonds that drive them have actually fallen almost in tandem by a half a percentage point.  Although that forecast remains unchanged today, … Read More

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Life is Short, Make your Mortgage Shorter

One positive consequence of the tighter mortgage rules is shorter amortizations.  While extending your mortgage over 40 years may make your payments more manageable and allow you to qualify for an even bigger home, you may never live to see your mortgage burning party. In pricier markets, the rational has been that you will enjoy significant capital appreciation that can contribute to your retirement savings.  Many are also under the … Read More

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4 Year Mortgages Make a Comeback

It must be Spring time, the mortgage wars are back.  It seems like a repeat of last year with Bank of Montreal (BMO) reducing the rate on their 5 year “no frills” mortgage to 2.99%.  There’s something about a rate below 3% that kicks off a flurry of responses from the competition.  Along with the usual warnings about the added costs of going with a “no frills” option, the banks … Read More

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Fixed Mortgage Rate Forecast – 2014

It appears that an era of consistently low mortgage rates with no significant prospects for increases is about to come to an end.  At least for long term fixed mortgage rates. Mortgage rates are directly tied to the market yield for government bonds of similar duration, and a significant economic stimulus program is beginning to wind down. The US Federal reserve began a bond purchase program in November of 2008 … Read More

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A Look Back at 2013 5 Year Mortgage Rates

Mortgage rates were a hot topic throughout 2013.  Governments intervened in money markets to manipulate mortgage rates in both Canada and the US.  While the US’ quantative easing (QE) program was focused on keeping rates low, Canadian policy makers were busy threatening rate increases and chiding banks for low mortgage rates.  Looking back at 2013 we can see that the US won the rate manipulation game. Quantative easing used the … Read More

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Fixed Mortgage Rate Forecast – October 2013

The fixed mortgage rate forecast for October 2013 is for rates to decline in the near term.  Fixed mortgage rates, particularly the most popular 5 year fixed mortgage rates, are tied to 5 year benchmark bond yields.  Insight into the direction of bond yields provides us with a crystal ball with which to predict near term fixed mortgage rates. The price of bonds have been kept low by the US … Read More

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Fixed Mortgage Rate Forecast – September 2013

The mortgage rate roller coaster continues as bond yields dip 20 basis point last week.  This dip comes as a result of the US Fed’s announcement that it will continue to support its bond buying program known as quantative easing.  The announcement surprised and rallied markets reversing upward march of bond yields. Lower bond yields remove upward pressure on mortgage rates and will eventually allow competitive lenders to lower their … Read More

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Mortgage Rates Stabilize

Ben Bernanke and the US Federal Reserve (Fed) shocked markets this week with the announcement that it will continue with it’s bond buy-back program.  This program, known as quantative easing or QE, is designed to keep bonds liquid and to force down yields or borrowing rates for bond issuers.  The net effect of lower bond yields is lower long term mortgage rates in Canada. Earlier this summer Mr. Bernanke hinted … Read More

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BMO Bumps 5 Year Mortgage Rate

Bank of Montreal (BMO) has bumped their “no frills” 5 year fixed mortgage rate by 20 bps to 3.79% effective today.  The move demonstrates the roller-coaster ride clients can expect if they choose the “no frills” option.  Less than a year ago, BMO made headlines by promoting this product at 2.99%.  The move was so bold that it warranted a phone call from the Department of Finance who was concerned … Read More

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Fixed Mortgage Rate Forecast – August 2013

Fixed mortgage rates are primed for a .25% to .50% increase over the next couple of months.  The Department of Finance’s policy change restricting the amount of MBS mortgages that Canada Mortgage and Housing Corp (CMHC) will insure is to blame. Without the ability to insure and then securitize as many mortgage assets, Canada’s mortgage lenders will have to resort to more expensive sources of capital to fund Canadian mortgages.  … Read More

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