Note: if this page does not display correctly, click on First Rate - Apr 2007 edition 

(this page is optimized for MS Outlook, Yahoo mail and Hotmail)

This information is provided to homeowners, realtors and investors as a complimentary service.  If you do not wish to receive this email, please click reply with the subject "unsubscribe" and you will be removed from this email list.  Removal is GUARANTEED.

 April 2007

Market commentary & Interest rate trends

Interest rate movements have been minimal during this past six weeks.  CIBC World Markets continues to predict a decline in the prime rate by 3/4% by Dec 2007.  We recommend staying with a variable rate strategy since rates are expected to be stable or even decline in the next few months. 

Rates and Charts

Prime @ 6.0% (next review on Apr 24, 2007)

Term	Feb 23	Mar 2	Mar 9	Mar 16	Mar 23	Mar 30	Today
3 year	5.24%	5.24%	5.20%	5.20%	5.20%	5.19%	5.19%
5 year	5.24%	5.24%	5.14%	5.14%	5.09%	5.09%	5.09%
10 year	5.64%	5.64%	5.59%	5.59%	5.59%	5.55%	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

 

1) Graph of 5 year residential mortgage rate and prime rate since 1951

2) Graph of 5 year posted rate since January 2000

3) Graph comparing the 5 year mortgage rate versus variable at prime - 0.80%

The Cost of an Auto Loan

Purchasing a new car can be an exciting experience.  However, many of us thiink nothing about how to finance that purchase. The choice of financing options could add thousands to the cost of your purchase.  Should you lease the vehicle? Should you take out an auto loan from the dealer or your bank or refinance your mortgage? 

Let's examine the cost of taking an auto loan from your bank.  Looking at one of the major bank's websites, the prevailing rate for an auto loan is around 8%.  If you took out a $40K loan for 7 years, you'd pay a total interest of $12.369 over the life of that loan.  If you took out equity from your home, you'd pay $7.632 over the same period (@5.09% interest).  That's a difference of $4,737. 

While taking out equity from your home will save you money, you'd have to consider the added set-up costs of amending your mortgage (i.e., appraisal and legal costs).   This is why planning ahead is a wise thing to do.  For this scenario, the best structure for your mortgage is an umbrella mortgage.  An umbrella mortgage will provide you with the flexibility to re-borrow from your home equity for much needed expenses (or for investment purposes) without any additional expense.   This type of mortgage is also the best for converting your mortgage to a tax deductible mortgage.