Money Matters Toronto » fixed mortgage rates Canada

5 Questions You Should Be Able To Answer About Your Mortgage

Christopher Molder — Thu, 01 Oct 2009 19:22:46 +0000

Do you have a mortgage in Toronto? Are you in the market looking for a mortgage right now? Here are 5 questions you should know the answer to about your mortgage.

Click here to view the embedded video.

Don’t Substitue A Line Of Credit For A Mortgage

Christopher Molder — Sat, 26 Sep 2009 00:16:47 +0000

Click here to view the embedded video.

Click here to view the article by Ellen Roseman in The Toronto Star

I Hate Paying Mortgage Interest Episode #9 – The Bullet

Christopher Molder — Tue, 22 Sep 2009 15:18:29 +0000

Click here to view the embedded video.

Xceed Mortgage Corp One Step Closer To Becoming A Bank

Christopher Molder — Fri, 11 Sep 2009 14:20:33 +0000

Yesterday, the shareholders of Toronto based Mortgage Co. Xceed voted to approve a plan to become a schedule 1 bank. This will allow Xceed to take deposits from the public to invest in mortgages. Look out for Xceed as they grow hopefully they will combine innovative products for the consumer with competitive rates.

Currently Xceed is offering the following mortgage interest rates through their Toronto Mortgage broker channel:

-3.94 for a fixed 3 year

-4.24% for a fixed 5 year

Ratewatch-Sept 11th

Christopher Molder — Thu, 10 Sep 2009 20:17:08 +0000

As expected the Bank of Canada announced this morning that they would leave the prime interest rate unchanged, citing economic development to be proceeding as expected. The Bank of Canada has also reiterated it’s commitment to keep the prime rate unchanged until at least July 2010,
pending controlled inflation. Click here to read the full Press Release.

What does this mean to you?
Your monthly mortgage payment will remain unchanged. There is very little risk of the prime rate changing over the next 9 to 12 months.

Should I lock in?
Surprisingly, very few people heeded our words of warning offered in the last Ratewatch to lock in. Rightly so! Although fixed rate mortgages spiked at the beginning of June, up to 4.49%, today you can lock-in around 4.19% and lenders are offering 3.99% on new mortgages. This means that it is only a matter of time before we will see the standard fixed 5 year rate below 4% again. With a very clear downwards trend of fixed rate mortgages and low risk of the prime rate changing, there is no need to lock in your variable rate mortgage at this time.

Merix Financial Fixed 5 Year Now 3.99%!

Christopher Molder — Thu, 03 Sep 2009 14:06:29 +0000

One of our favorite lenders Merix Financial is now offering 3.99% for a fixed 5 year mortgage through their exclusive mortgage broker channel in Toronto. The mortgage must fund before Oct 30th, 2009.

Merix Financial is a true leader in the Canadian mortgage market. Not only do they consistently offer the most competitive rates in the mortgage market, they also offer the most innovative products, like their 3 year variable rate mortgage (2.35%) and their awesome 50/50 mortgage . Not to mention they have excellent customer service.

ING Direct Rate Hold Tool For Mortgage Brokers

Christopher Molder — Tue, 01 Sep 2009 16:16:23 +0000

ING Direct has introduced a new rate hold tool for Mortgage Brokers which allows ING qualified brokers to secure their clients excellent rates for 120 days. The new rate hold for brokers tool only requires qualified mortgage brokers to submit a few details including the client’s contact information, and the approximate amount they want to borrow.

This is a great tool for borrowers and mortgage brokers alike. The trend in the mortgage industry has been towards the gradual elimination of pre-approvals and rate holds. The ING Direct rate hold tool for Mortgage Brokers allows the broker to secure a rate even if you are not ready to submit and application for a pre-approval or mortgage.

If you would like to secure a rate with ING Direct over the next 120 days give me a call to discuss. Christopher Molder 416.461.0204ext2 or email chris@tridacmortgages.com

Mortgage Interest Rates Are Overpriced

Christopher Molder — Sat, 18 Jul 2009 04:46:26 +0000

In my post yesterday, I mentioned in point #4 that mortgage interest rates are overpriced. To flesh out that statement I found this great interview.

The following is a link to a great video blog on the Globe & Mail website by Financial editor Rob Carrick. In it he interviews author of the Canadian Mortgage Trends blog and fellow mortgage planner, Rob McLister.

Rob’s comments & position in the interview are very insightful.

Fixed Or Variable Rate Mortgage: What Should I Do?

Christopher Molder — Fri, 17 Jul 2009 04:51:54 +0000

As a mortgage broker in Toronto I receive calls from my clients and shoppers asking what to do in today’s market. After all, over the past 3 months alone mortgage rates have gone on a bit of a roller coaster ride.

I think variable is still the way to go. Here is why (DISCLAIMER: This is my opinion only. I am not offering financial advice. Everybody has different circumstances and mortgages are not one size fits all):

1. You will keep your mortgage payments low. The difference between the average variable rate in today market P+.50 (2.75%) and today’s average fixed rate mortgage (4.49%) is 1.74%. That translates into a difference of $231/month on a $250,000 mortgage amortized over 25 years.

2. If you are willing to pay the monthly payment of a fixed rate mortgage you can opt for the variable and take advantage of your ability to increase your monthly payment by 20%. All the extra money will go toward reducing the principal which will take months if not years off your mortgage and save you interest.

3. The Bank Of Canada has made a promise to Canadians that they will keep the prime rate level until the end of the second quarter of 2010. (Source)There is very little risk that your payments will increase over the next 12 months. With the economic outlook it appears that we may be a very long way away from inflation and recovery so the prime rate may stay low even longer. Lets just assume that you take variable for exactly one year and lock into a fixed 5 year at 5% for the remaining 5 years. The effective interest rate (average) still works out to be 4.53%.

4. Fixed rate mortgages are over priced. As I’ve explained in previous posts mortgage lenders determine their fixed rate prices by keeping a spread on current bond yields. When it comes to fixed rate mortgages you have “one bullet” to shoot. If you take a fixed today… thats it you forfeit the opportunity to do so in the future when rates are lower. By taking a variable you can stay in the game and lock-in in the future when rates are lower. This Toronto Star Article highlights the fact that fixed rate mortgages are over priced and that there is downwards pressure.

If you would like to discuss your particular situation or can’t make up your mind call our Toronto Mortgage office at 416.461.0204×2 and speak with Christopher Molder.

Bond Yield For Thursday, July 9, 2009

Christopher Molder — Fri, 10 Jul 2009 05:24:25 +0000

Canadian 5 yr bond yields -.04bps to 2.37- Four weeks ago it was 2.82. The spread, based on 5 yr rate of 4.49%, is at 2.12%.

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 the current 5 year bond yield. 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.

A such there is pressure for fixed 5 year rates to be around 2.37 + 1.80= 4.17%