Mortgage, Money and Dream – Our thoughts on Canadian Mortgage Market
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Growing inflation, how much worried should you be?

Canadian 5 year Bond Yield - One month trend - June 2014

Last week Canadian consumer price index made a lot of headlines, by reaching 2.3% in May 2014. For the first time in two years that inflation went about 2% mark. As a result all the investors thought that this is a clear indication of future rate hike. […]

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Interest rates may not wait for inflation to grow

Interest rate and inflation are generally like two sides of a coin. When one moves one way then the other side follows it. Although it seems to be a general norm but it may not hold ground for long. In 2008 during the financial meltdown Canadian government […]

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Prime -1% variable rate mortgage is finally back

1.99% variable rate is back in Canada

Investor’s Group yesterday announced that they are introducing 101 basis points discount over prime rate on three years variable rate mortgages. That translates to 3% (Prime) minus 1.01% equals to 1.99% interest rate for three years – provided that prime rate does not change. Before 2010, Prime […]

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Home buyers mortgage choices – in pictures

Home Buyers Rate Choices

The result of a survey conducted by CIBC are presented here in charts. The overall home buyers preference may have nothing to do with individual situations. Each situation is different and should be treated on their own merits.

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Lowest qualifying rate in recent history – 4.99%

Variable rate qualifying rate drops again

Many lenders are still qualifying borrowers with an above 5% interest rate. According to Bank of Canada the lending rate (Conventional mortgage – 5-year) stands at 4.99%. The same rate is generally used to qualify a borrower who is seeking less than 5 years fixed terms or […]

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Rates (fixed) are taking a nosedive – Can’t be at any better time

BoC-five-years-bond-yield-Feb-04-20143

Please don’t let the headline fool you. Variable rate discounts are drying up a bit too. So, when fixed rates are descending then variable rates are running towards an opposite direction. Bond yields are sinking like a stone in water. Obviously recent share market hiccup forced the […]

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Qualifying rate went down by 0.1 percent

bond-yield-qualifying-rate-5.24-January-2014

The lenders in a recent rate reduction move – pulled the qualifying rate down by a tiny fraction – 0.1% – from its previous 5.34% to 5.24%. Does it really matter much? In one word no! – for borrowers who do not push the boundary of their […]

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How to deal with future higher rate – Lenders re-take on penalty (may be?)

A lender makes money from interest on the loan and/or early breakage penalties paid by a borrower. If a borrower is stubborn not to pre-pay the mortgage before its maturity then the banks only earning is from the interest and some fees. Not all the home owner […]

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Weekly Dose of Vitamin – M: “Remembrance Day” 2013 edition

Canadian politicians are once again worried about boiling Real Estate Market. Last time they tighten the market – they ended up boosting the businesses of alternative lenders. This time they may actually kill the small fry lenders. The regulators are setting rules without properly looking at all […]

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Bond yields are slipping away – Mortgage Rates – not so much

Canadian Benchmark bond yield - five years - Bank of Canada

Since Bank of Canada declared that it has no intention to kick start the bullish run for the overnight rate – the bond market started to show strength. Our expectation from the debt deal in US was that it may return the bond yields to their past […]

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Do you suffer from rate shopping syndrome?

rate-shopper-called

Doing a research on rates and shopping for rates are two different things. A mortgage rate research typically means gathering intelligence on rates offered by various lenders and the associated conditions. The research helps a would-be borrower to understand the pros and cons of different offers and […]

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Yield Curve Showing Momentum – Fix it if you can!

zero-coupon-bond-yield-BOC-June-2013

Zero coupon yield curve may not be an important chart for our daily schedule but when you are deciding what to do with the future of your mortgage then it comes handy. Yield curve is a reflection of the mind set of bond investors. It shows what […]

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