Money Matters Toronto » interest rates

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.

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I Hate Paying Mortgage Interest Episode #9 – The Bullet

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

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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

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

Bond Yield For Friday, July 10, 2009

Christopher Molder — Sat, 11 Jul 2009 05:18:52 +0000

Canadian 5 yr bond yields +.04bps to 2.41- Four weeks ago it was 2.74. The spread, based on 5 yr rate of 4.49%, is at 2.08%.

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.

Bond Yield For Thursday, July 26, 2009

Christopher Molder — Fri, 26 Jun 2009 21:45:50 +0000

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.

Fixed Mortgage Rates Are Up: Your Options Now

Christopher Molder — Wed, 17 Jun 2009 23:22:07 +0000

If you are tossing and turning every night trying to figure which way mortgage interest rates are moving join the club. My impression is that nobody knows exactly which way rates are moving and what the long term trend is. I certainly wouldn’t rely on the sound bytes that come out of the media on a daily basis… you’ll drive yourself crazy!

Take this morning’s paper. The Globe & Mail and Toronto Star each ran an article in their respective business sections about mortgage interest rates. In the Globe & Mail article the author interviews an Ottawa mortgage broker about what he is personally doing. The broker is locking in his ridiculously low variable rate mortgage to curb the risk of higher rates in the future due to inflation.

Then you read the Toronto Star article where numerous economists are interviewed about their predictions for the future. They feel that the recent increase in fixed rate mortgages due to an increase in bond yields was an over reaction by bond investors and that we are certainly not at a critical point where rates will be increasing with speed. We are still far away from inflation and the high interest rates that are associated with it.

My feeling echos that at the end of the Star article… take your time before making any rash decisions. If you are in a variable, have a good long look before you give up your low effective rate. Just because rates have increased doesn’t mean that they won’t come back down. If you are in the market for a new mortgage you may still want to consider a variable because there exists the potential for fixed rates to decrease again… maybe not as low as we saw two weeks ago. If you are really on the fence consider a product like the Merix 50/50 mortgage where you get half your mortgage as a fixed mortgage and the remainder as a variable.

Do you have a question about your mortgage? Tridac Mortgages has been helping clients for over 30 years. Call our Toronto office at 416.461.0204. Chris Molder. We’re here to help you.

How Fixed Mortgage Rates Are Determined

Christopher Molder — Tue, 16 Jun 2009 00:59:33 +0000

Bond Yield VS 5 Year Fixed Rate

Canadian Bond yield versus the 5yr fixed mortgage rate from February 13th, 2009, through to June 12th, 2009. It was published by the Canadian lender Merix Financial.

The bond yield, or rate of return on your bond, is depicted by the blue curve on the graph above while Merix’s fixed 5 year is the green curve. As a consumer, if you want to know which way fixed rates are moving you want to pay attention to the spread between current fixed rates and the bond yield. Mortgage lenders set their fixed 5 year based on a spread between 1.70% to 1.80%.

So, if we look at Merix’s fixed 5 year rate of 4.49% and compare it to the current bond yield of 2.71% the spread is 1.78%. That’s right on target (4.49-2.71=1.78).

What you need to watch for is if their is an increase in bond yields then the spread will continue to shrink and that could cause interest rates to rise.

In summary: Canadian 5 yr bond yields -03bps to 2.71- Four weeks ago it was 2.21. The spread, based on new 5 yr rate of 4.49%, is back in the target zone at 1.78%.