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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

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

The Merix 50/50 Wise Mortgage is a closed mortgage that lets borrowers take advantage of low fixed rate and low adjustable rate products all in one mortgage. 50% of the mortgage is in a 5 year fixed rate and 50% of the mortgage is in a 5 year Adjustable rate. The Adjustable rate can be locked in at any time to a fixed rate for the remainder of the term of the mortgage.

If you would like to find out more about this product and how you can use it, please call Christopher Molder, Toronto Mortgage Broker at 416.461.0204ext2.

U or W?

As a Toronto Mortgage broker, my clients rely on my advice not only while they are making their financing decisions but also in the years after making the decision to determine whether they are still on the right road and on track.

As such, I pay attention to the economy. One of my favorite areas of interest is determining what shape (literally) our recovery will take.

Will it be a sharp quick recovery? Usually described as a ‘V’ or will it be a long drawn out recovery with an extended low trough, described as a ‘U’. Or will the recovery take place as a ‘W’ with two very distinct drops. We’ve already had one drop. It seems that we are on the road to recovery with Toronto real estate prices remaining firm, however, I suspect that we haven’t seen the end of the recession. I’m anticipating a second drop.

If you’d like to read more, check out Nouriel Roubini who wrote an insightful article in the Opinions section of today’s Globe & Mail, entitled “Double Dip Recession Threat“.

If you’d like to talk about your mortgage and determine how best to position yourself please don’t hesitate to give me a call. Christopher Molder, Toronto Mortgage Specialist 416.461.0204ext2

As a mortgage broker in Toronto, it’s important for me to keep on top of significant economic data. This data is useful to me as it helps me to advise my clients on decisions about interest rates and predicting opportunities and pitfalls in regards to their mortgage financing and real estate options.

The Globe & Mail reports an increase in the unemployment rate in their article “Jobless Rate Inches Up To 8.6%”. The article suggests that while the unemployment rate increase to 8.6% from 8.4% in May, the numbers are better than expected.

The Globe site hosts two interactive maps which break up the unemployment numbers by region, province, and city.
Map 1
Map 2

While unemployment numbers may not have a direct impact on real estate, from a practical “coffee table” economist point of view it should be telling you something. Currently, the real estate numbers (especially in Toronto) are very positive and it seems like real estate hasn’t really been affected by the global recession. However, it would be a mistake to believe we are invincible. With unemployment on the rise there lies the risk for the following:

1. Increase in bankruptcies,
2. Increase in power of sales on homeowners who can’t pay their mortgage anymore, and
3. Decreased real estate values as fewer and fewer consumers will have the appetite or ability to purchase and afford a home.

One positive is that with fewer consumer dollars circulating we may experience deflation which would mean interest rates will stay low.

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.

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.

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.

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.