Posts Tagged ‘Fixed rate mortgage’
Beware Sites Advertising “Low Mortgage Rates”
The Internet has given us unlimited access to information. As a small business owner, the Internet has also provided an affordable way to effectively market to millions of people. One of the ways some Mortgage Agents choose to market on the Internet is through lead generation sites. If you have searched for a mortgage rate on-line chances are you have visited one of these sites. They usually offer a choice of rates from several different Lenders/Brokers. This can be great for getting an idea of the best mortgage rates out there, but I caution most people when they are looking at these sites. There is much more to a mortgage than just a low rate. These sites do a good job of presenting several rate options, but they do not let the consumer know the terms and conditions associated with that rate. Mortgage rates have unfortunately turned into a commodity where lower is always perceived as better. Imagine you were shopping for a car and all the info the sites gave you was the price......wouldn't you have ...
Mortgage Rate and Housing Outlook
I recently had the opportunity to listen to an economist from Genworth Canada speak on his predictions about where mortgage rates and housing starts would be going over the next couple of years Really, there were not many surprises. By this point we all know mortgage rates only have one place to go and that is up. When we will start to see this increase is up for debate, but most "experts" agree it will be before the end of this year. Originally variable rates were predicted to start moving by July, but several bank economists have recently come out saying it will now be early fall. That is great news for those of us with variable rates. So how high will mortgage rates climb? It is hard to see the future without a crystal ball, but Genworth feels by the end of 2012 we will see prime rate around 6% and 5 year fixed rates around 7%. Keep in mind the 5 year fixed is the posted rate and most lenders discount the posted rate by ...
Toronto Mortgage Rate Watch
Toronto Mortgage Rates have been falling over the past week. Why you might ask? As I have mentioned in the past, Canadian fixed mortgage rates are driven by Canadian Government Bond yields which banks use as a benchmark for setting rates.As you can see by the above chart, Canadian Bond Yields have been falling for the past two weeks or so due to unrest in Libya and the Japanese Earthquake and resulting tsunami. The unfortunate events in other parts of the world actually have a positive affect on Toronto's Mortgage Rates.You can also see I have drawn a "Resistance" line across the graph. This level has proven to be a resistance point in the past. I will watch to see if yields creep above this line in the coming weeks as a substantial cross above will be a sure indicator bond yields are on the rise again and Toronto Mortgage Rates could follow. Is your Toronto Mortgage Broker watching rates on your behalf?Thank you for visiting www.YourLowMortgage.ca Related articlesMore Canadian banks cut mortgage rates (nationalpost.com)
Canadian Historical Interest Rates
Happy New Year! I trust you all had a great holiday season. I have been a little tardy in updating my Blog over the last month, but it is a new year and I vow to keep the content on my site relevant and current. The first post of the year will be short, but it illustrates the benefits of a variable rate vs a fixed rate. Thank you to my good friends at Firstline Mortgages for the graph. CLICK ON GRAPH TO EXPAND Pick any point on the graph and draw a straight line across. You can see if the variable rate would have ever crossed above the corresponding fixed rate. There are very few cases where it does......and it does not stay above long. As I have said many times, part of the variable vs fixed decision is based on your risk comfort level and not just savings. Speak with your mortgage provider to make sure a variable rate is right for you. Related articles
Hybrid Mortgages – Good or Bad?
The Globe and Mail ran a couple of articles recently on hybrid mortgages in Canada so I thought I would weigh in on the subject. The first article they wrote last week spoke of the advantages of a hybrid mortgage and how it can help guard against rising interest rates. The article was quite short and did not go in to much detail on how the hybrid mortgage actually works. The Globe then followed up with a second article yesterday quoting a mortgage broker and talking about some of the pitfalls. What is a Hybrid Mortgage? So what is a Hybrid Mortgage and how does it work? A hybrid mortgage is basically the love child of a variable and fixed rate mortgage. The client can choose how much of their mortgage to set at a fixed rate and how much to allow to float at a variable rate. The logic behind this product is it will help protect you against rate increases with the fixed ...
Variable vs Fixed – Take the survey
With the recent increase in fixed mortgage rates over the last month and the talk of an upcoming rate hike from the Bank of Canada, the battle between fixed and variable is tougher than ever. Personally, I have noticed more and more clients are sitting on the fence when it comes to choosing. I am interested to hear what you think. Please take a second to complete the poll below and see how others feel about this debate. Of course your answer will be completely anonymous. Be sure to check back often to see the latest results. [polldaddy poll=3259920]
Variable VS Fixed Mortgages
One of the main considerations when getting a mortgage if whether to lock in your rate or choose a variable rate mortgage. I always educate my clients on the pros and cons of each mortgage type and then help them make a decision that will be best for their financial situation and risk profile. I have mentioned before that historically a client you chooses a variable rate will be better off in the long run. Sure, there are ups with the downs, but on average they are paying less interest than their counterparts who lock in for extended terms. I think the graph below illustrates this point nicelyTo see what I mean, pick a point on the green line (fixed rates) and then draw a line straight across the page (to the right). See how many times the orange line crosses above the line you drew. This will tell you how many times the variable rate would have been equal to or greater than the fixed rate mortgage you chose. Most of the time the variable rate is well below. It will be interesting to see ...
