Tag Archives: VRM

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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Mark Carney Suggests Rate Hikes Looming

Bank of Canada Governor Mark Carney said again that the bank may have to raise interest rates to keep inflation on target.  This would mean in increase to variable rate mortgages.  He said it was not necessary to be more explicit about timing of a possible move but said that Canada was “well into an expansion”.  The timing and degree of any increase “will be weighed carefully against domestic and … Read More

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What a 1% Mortgage Rate Hike Means to You

We’ve all been enjoying record low interest rates.  The low mortgage rates have enabled us to buy bigger homes or just pay less interest each month.  If you’re one of the many Canadians who’ve taken on a bigger mortgage then you may be concerned about rising rates.  And rise they will.  Current mortgage rates tied to the prime lending rate have been strategically held low to help stimulate the economy.  … Read More

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The Hidden Pitfall in March’s Major Empoyment Gains

Employment numbers increased dramatically with March cranking out 82,300 jobs, surpassing economists’ expectations 8 fold.  This surge of new jobs pushed down the unemployment rate to 7.2%, its lowest rate since the recession began over 3 years ago.  This is obviously good news for the economy and is another clear signpost to naysayers that Canada is not only out of its recession, but bouncing back better than expected. Any significant … Read More

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Variable Mortgage Rate Outlook – April 2012

The forecast for variable mortgage rates remains flat, just as it was last month, and the month before that.  Variable mortgage rates float with a lender’s prime rate of interest, which is tied directly to the overnight rate set by the Bank of Canada.  In a speech today in Waterloo, Mark Carney, the Governor of the Bank of Canada said “All indicators point to inflation expectations remaining well anchored”.  With … Read More

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Home Equity Line of Credit vs. Variable Rate Mortgage

Many homeowners prefer the flexibility of a Home Equity Line of Credit (HELOC) over a closed term mortgage.  While there are merits to a HELOC it isn’t always the best option.  HELOC’s tend to be more expensive than their closed variable rate mortgage (VRM) counterpart.  The great thing about mortgages is that it’s all about the math.  If you know your needs then you can calculate the numbers to determine … Read More

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