Tag Archives: Variable Rate Mortgage

Variable Mortgage Rate Forecast – August 2012

The Bank of Canada (the “Bank”) sets the overnight lending rate which directly impacts the mortgage prime rate.  Although the Bank has a broader agenda than just controlling the mortgage prime rate, this motive has been in the spotlight due to the Bank’s desire to deleverage Canadian borrowers.  Despite some upward rate pressure to cool the housing market there has been no change to the prime mortgage rate all year.  … Read More

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Interest Only Mortgages

An interest only mortgage is simply a mortgage that only requires periodic interest payments.  While borrowers will enjoy better cash flows, the obvious downside is that they may never pay down their mortgage. A typical mortgage requires a constant payment of both interest and principal.  The longer the amortization (the time it takes to pay-off the mortgage) the lower the payment and the less principal paid each month.  Recent department … Read More

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Bank of Canada Holds Mortgage Rates

The Bank of Canada announced yesterday that they will maintain the overnight rate at 1%.  This ultimately will keep variable mortgage rates where they are at least until the next meeting date, scheduled for September 5th.  This announcement was uniformly expected by economists and mortgage planners alike. In the announcement Mark Carney downgraded the Banks’ growth prediction for the Canadian economy down to 2.1% for 2012 and 2.3% for 2013.  … Read More

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Variable Mortgage Rate Forecast – July 2012

The next Bank of Canada interest rate announcement date is 2 weeks from today with zero chance of a rate change.  In fact, there’s very little chance of a variable mortgage rate change for the next 12 months. Just earlier this year Mark Carney was hinting at possible variable mortgage rate increases sometime this fall, but recent global economic events have reduced that likelihood to near zero.  Dismal growth prospects … Read More

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Variable Mortgage Rate Forecast – June 2012

The prime lending rate and thus variable rate mortgages are expected to remain at current levels for the midterm (3-6 months).  Variable rate mortgages are tied directly to the prime lending rate which in turn is a function of the overnight rate set by the Bank of Canada (BOC).  Mark Carney, director of the Bank of Canada, kept the overnight rate at 1% Tuesday and their commentary made it clear … Read More

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Bank of Canada Maintains Interest Rates

Mark Carney and the Bank of Canada (BOC) announced today that they are keeping the overnight rate at 1%.  This will in turn leave the prime lending rate at 3%.  Existing variable rate mortgagors will be pleased to know that their ultra-low mortgage interest rate will remain unchanged, at least until the next Bank of Canada meeting date scheduled for July 17, 2012 In the announcement the BOC acknowledged that … 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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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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Variable Mortgage Rate Outlook – May 2012

Variable rate mortgages continue to offer great value, especially to those who locked in a discount to prime of 0.75% or more.  With our current prime rate of 3.0% these mortgages are at least 1% lower than current 5 year fixed mortgages rates.  Those who are shopping for a mortgage rate today however, have to contend with variable rate mortgages with no discount at all.  These new variable rate mortgages … Read More

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Yoyo Mortgage Rate Predictions

There’s the long term mortgage rate outlook and then there’s short term yoyo economics.  The long term view is that Canadian mortgage rates will remain low for at least another year.  These predictions are widely held and based on the high currency, global economic uncertainty and high Canadian debt levels.  Then there’s a flurry of reactions to the latest job numbers, housing starts or whatever other tidbits Statistics Canada is … Read More

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