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August 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:
- Market commentary and Interest rate trends
- Purchasing a 2nd home with no money down
- Interest only mortgages
- In the news
Please check out my NEW affiliate website: BCHomeBuyer.ca .
Market commentary & Interest rate trends
Fixed term interest rates climbed slightly in July 2005. The 10-year fixed rate is looking very attractive at 5.05% (up from 5.0% in June). This is ideal for individuals seeking long-term interest rate security. This rate is still the lowest in the past 50 years.
The Bank of Canada is widely expected to increase the overnight rate by a quarter percentage point in Sept 7, 2005, resulting in the prime rate increasing to 4.5% (from 4.25%). This is the result of Canada's stronger than expected economic growth.
We do not believe that this will be a long-term trend. Our advice to variable rate holders is to stay the course - that is, do not panic and run to your lender to lock-in.
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Prime @ 4.25%
Term
Jun 17
Jun 24
Jul 1
Jul 8
Jul 15
Jul 22
Jul 29
3 year
4.25%
4.25%
4.25%
4.25%
4.25%
4.25%
4.25%
5 year
4.50%
4.50%
4.50%
4.50%
4.50%
4.50%
4.50%
10 year
5.00%
5.00%
5.00%
5.00%
5.00%
5.05%
5.05%
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)
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Click to view other relevant graphs
Purchasing a 2nd home with no money down
Do you know that you can purchase a vacation / 2nd home without having a down payment? The mortgage is insured with Genworth Financial (formerly GE Mortgage) and financed through a major chartered bank. The qualification requirements are no different than when one applies for a no down payment mortgage on a first home. Please call for details.
Interest-Only mortgages
With the high price of homes in the Lower Mainland, your mortgage could be taking a significant chunk of your take home pay. If you're feeling the strain, you should consider an Interest-Only mortgage. With this type of mortgage, you just pay interest (no principal). For example, on a $250,000 mortgage, your mortgage payment is approx. $939 per month ($440 per month lower than the current 5 year mortgage). To qualify, you need at least 10% down payment, good credit and a stable job. Please call for details.
This mortgage is ideal for young professionals who have a good prospects for salary increases. Once your income increases, you always have the option to start paying down the principal..
In the News (excerpts from recent press releases)
1) CIBC World Market's Monthly Indicators (CIBC World Markets, July 6, 2005) - CIBC's monthly economic newsletter. CIBC is not changing its prediction of a stable prime rate at 4.25% until Dec 2006 (see Interest and Foreign exchange rates table). Canada's inflation rate remain at the Bank of Canada's target rate. Furthermore, CIBC predicts that economic growth will slow down during the 3rd quarter of 2005. Click here to read more.
2) Vancouver's house-sales fever (Van Sun, Jul 18, 2005) - Is there going to be a real estate bubble? This article looks at what's happened in Sydney, Australia, a city with many similarities to Vancouver. Read about what economists from CMHC, RBC, Credit Union Central of BC and the Economist magazine are saying about where the real estate market is headed. Click here to read more.
3) June record month for home sales (Van Sun, Jul 16, 2005) - Real estate market hit a record high in June, fuelled by a robust economy and continuing rock-bottom interest rates. Realtors sold 11,437 homes, more than any other month in history. Click here to read more.
4) Land, skills shortage drive up home costs (Van Sun, Jul 12, 2005). The pace of home construction has fallen dramatically in Greater Vancouver because of a shortage of skilled workers and suitable properties, doubling the cost of residential building over the past five years. Click here to read more
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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.