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First Rate

A newsletter specifically designed to keep you updated on interest rate trends
john santos ocampo, mortgage broker 
John Santos-Ocampo AMP
Mortgage Broker
 
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April 2005

Dear home owner,

As a homeowner (or prospective homeowner), investor or real estate professional, you rely on your mortgage professional to keep you informed about interest rate movements and trends.  This newsletter is designed to do just that.

In this issue:

  • Interest rate trends
  • Purchasing your first investment property
  • In the news

Interest Rate Trends

Fixed rates creeped up slightly in March 2005 as the US Fed announced a quarter increase in the benchmark interest rate. 

The prime rate remained unchanged in March 2005 due to lower than expected growth during the 4th quarter of 2004.   The Bank's next review is scheduled for Apr 12/05.  With Canada's January growth rate also falling below expectations at 0.2%, many economists see the BOC remaining on the sidelines on Apri 12 at that time. 

The Core inflation was slightly higher at 2.1% in Mar 05.  This is within the Bank of Canada's target range of between 1% to 3%.  

Prime @ 4.25%

Term

Feb 11

Feb 18

Feb 25

Mar 4

Mar 11

Mar 18

Mar 25

3 year

4.39%

4.39%

4.39%

4.39%

4.39%

4.45%

4.70%

5 year

4.75%

4.75%

4.75%

4.75%

4.75%

4.75%

4.95%

10 year

5.45%

5.45%

5.45%

5.45%

5.45%

5.45%

5.55%

Table shows the discounted residential mortgage rates for 3, 5 and 10 yr closed fixed rate mortgages

For a longer term view, click here to see the 3, 5 & 10 year best residential rate since September 2003 (updated monthly)

Click to view other relevant graphs
 

 

Purchasing your first investment property

 

Owning an investment property brings with it legal and tax obligations that you should be aware of.   For example, you'll need to know: (1) What expenses can you deduct? (2) What is the best legal entity for the investment? (3) How do you find and evaluate prospective tenants? (4) Tenancy legislation, etc.

 

As a start, you should read the following two publications from the Canadian Customs and Revenue Agency (CCRA) and the Canadian Mortgage and Housing Corporation (CMHC):

 

1) CCRA's rental property guide

2) Your guide to renting a home from CMHC.

 

While there is no substitute to consulting your lawyer and accountant, these two publications will help you understand the basics invovled in owning a rental property.

 

In the News (excerpts from recent press releases)

1) Housing sales surge ahead in February  (Vancouver Sun, Mar 18, 2005)  - Home sales across BC picked up in February after a slow January, returning to last year's record-setting page. Though the number of units sold declined slightly from Feb 2004, to 7404, dollar volume increased a healthy 8.3% to $2.3 billion.  Click here to read more.

2) Loonie Boom - How The Soaring Dollar Is Sustaining The Canadian Housing Market (CIBC World Markets, Mar 15, 2005) - Over the past year, the soaring loonie was real estate’s best friend. The dramatic appreciation of the dollar put the brakes on monetary tightening by the Bank of Canada and helped to keep long-term rates near historic lows. And with cheap credit being the lifeblood of the housing market, real estate values continue to surge..   Click here to read more.

3) Mortgage rates rising in line with borrowing costs (Canada.com, Mar 24, 2005)  - Mortgage rates are going up, or standing pat, depending on your borrowing choice.  Fixed-term rates are rising in line with borrowing costs in the bond market, while variable or floating rates will hold steady. Click here to read more.

4) BC's hot real estate market 'not a bubble ready to burst' (Vancouver Sun, Mar 31, 2005) - BC's hot real estate market is no bubble about to burst, panellists at the Vancouver Board of Trade's economic forum said Wednesday. Click here to read more.

Links and Resources:
1) Royal Bank - Financial Market Weekly
2) Bank of Canada - Bond Yields
3) Bank of Canada - Consumer price index, 1995 - present

 

Please consider the information provided in this newsletter as general information.  Before you do anything consult a professional.

 

To unsubscribe, please click reply with the subject "unsubscribe" and you will be removed from this email list.
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