Money Matters Toronto

Canadian 5 year bond yields -.01bps to 2.48. Four weeks ago it was 2.51. The spread, based on 5 yr rate of 4.49%,  is at 2.01%.

Pressure on fixed 5 year: Down.

Financial Post – Market. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields -.03bps to 2.49- Four weeks ago it was 2.52. The spread, based on 5 yr rate of 4.49%,  is at 2.00%.

Pressure on fixed 5 year rate: down.

Financial Post – Market. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields -.01bps to 2.48- Four weeks ago it was 2.51. The spread, based on 5 year rate of 4.49%,  is at 2.01%.

Pressure on fixed 5 year: Down.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 year bond yields -.03bps to 2.49- Four weeks ago it was 2.52. The spread, based on 5 yr rate of 4.49%,  is at 2.00%.

Pressure on fixed 5 year rate: Down.

Financial Post – Market. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields +.03bps to 2.58- Four weeks ago it was 2.58. The spread, based on 5 yr rate of 4.49%,  is at 1.91%.

Pressure on Fixed 5 Year: Down.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

This Past Wednesday’s Financial Post featured an article by writer Alia McMullen commenting specifically about the variance of statistics coming from the Canadian housing market. Are we up or are we down… What do you think?

Is Canada’s housing market tanking or taking off?

Canadian 5 yr bond yields -.06bps to 2.52- Four weeks ago it was 2.51. The spread, based on 5 yr rate of 4.49%,  is at 1.97%.

Pressure On Fixed 5 Year: Down. Today’s best rate 4.39% fixed 5 year, 2.65% variable rate.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

Canadian 5 yr bond yields +.03bps to 2.58- Four weeks ago it was 2.58. The spread, based on 5 yr rate of 4.49%,  is at 1.91%.

Pressure on Fixed 5 Year: Down.

Financial Post – Markets. Lenders typically like to keep a spread of 1.70% to 1.80% between their fixed five year rates and current bond yields. If the bond yield increases then the spread will shrink putting upward pressure on mortgage interest rates. The reverse is also true. If bond yields decrease then the spread widens and there is downwards pressure on fixed rate mortgages.

On another interesting note: LCBO posted record one day sales this week. We bought over $60-Million worth in alcohol in one day. Wow! Read the full article here.

In this episode of “I Hate Paying Mortgage Interest” I cover the 2nd C of Credit, capital, otherwise known as down payment. Suprsingly, the largest down payment isn’t always the optimal down payment. In my video I explain why.

Recently, Terrance Belford of the Globe & Mail published an article entitled Condo resales are on a roll . The article had a very upbeat feel to it, spewing out positive sales data, interviewing the likes of Brad Lamb and the general under lying tone of the article is that the good times of real estate are back in Toronto and especially in the Condo market. The article generated some very colorful commentary from readers… an entertaining read for anyone with the time.

Don’t get me wrong, my fate is tied to a healthy economy. When people are buying houses that is good for my mortgage business however at the same time we need to be realistic and call things the way they are with some perspective. One client who is currently in the market for a condo picked up on the buzz coming from the realtor community and expressed some fear that she has missed the boat. To which I replied “Non Sense!”. Lets face it… you know we are in a recession when CBC is airing stories entitle “Wedding Bills” about how brides are cutting back on their wedding due to tough economic times!

In previous posts I talk about the conflicting sound bites coming from the media regarding the economy and the Globe article I mention at the beginning is a case in point.

I am not trying to dispute the great sales numbers from the past month ( i think it was an unexpected and delightful surprise to the real estate community who are trying to get as much leverage out it as possible) and I am not a doomsday sayer but with my back ground in economics and simple observation I am making a case for caution.

I did plenty of reading this weekend and let me present some of the tastiest bits for your reading pleasure:
Continue reading Recession and Real Estate: Looking Forward