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First Rate
E-Newsletter for June 2009
Dear
John,
If you are a homeowner, potential homeowner
or a real estate investor, you know that your mortgage is the single
largest expense you'll ever have. Keeping abreast of interest
trends, mortgage innovations and credit strategies will help lower
your mortgage costs and possibly build wealth for you and your
family.
I have a unique approach to
the mortgage business and that is, to provide my customers with the
most comprehensive information and options available so they can
make the best mortgage and home buying decision. I don't use
any slick sales techniques or negotiation strategies. It's all
about providing the right information and letting you make the
decision- My job is done when you know your
options.
In this
issue:
- Market commentary & interest
rate trends
- Merix Offers 50-50
Fixed-Variable Mortgage
- Monthly Review of Interest Rate
Forecasts from the Major Banks
- Tips for Boosting
Affordability
Market commentary & Interest
rate trends
The Bank of Canada (BoC)
maintained the overnight rate by 1/4 % during its last review on
June 4. The Bank reiterated their commitment to keep the rate
at this level until the second quarter of 2010 as long as inflation
is not a factor. As a consequence, variable rates are expected
to stay where they are until the middle of
2010.
It's been a different story for
fixed rates. Canada bond yields have increased by almost 1%
over the past month. This has prompted many lenders to raise
their rates from 3.79% to 4.49% on their 5 year fixed rate
mortgage.
The real estate market was in
full swing in May 2009. After operating under capacity from
Nov 2008 to Feb 2009, many lenders cut staff levels. With a
turn around in the market, many lenders were caught under
manned. The result has been much slower turnaround
times. Some lenders were taking up to 5 days to process
applications. For many borrowers (especially first time
buyers), this has been a big headache.
Rates and
Charts
-
Prime @
2.25% (next announcement on July 21, 2009)
-
|
Term |
Apr
24
|
May
1
|
My
8
|
May
14
|
May
22
|
May
29
|
Today |
|
3 year
|
3.89% |
3.79%
|
3.15%
|
3.15% |
3.15% |
3.15% |
3.65% |
|
5
year |
3.89%
|
3.89% |
3.89% |
3.89% |
3.89% |
3.79% |
4.49% |
|
10
year |
5.25% |
5.25%
|
5.25% |
5.25%
|
5.25% |
5.25% |
5.45% |
-
Table shows
the discounted residential mortgage rates for 3, 5 and 10 yr
closed fixed rate mortgages (these are standard rates - i.e., what
most lenders are offering for prime
clients)
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
-
-
-
-
Merix Offers 50-50 Fixed-Variable
Mortgage
Merix Financial recently
announced their “50/50 Wise Mortgage”. This allows borrowers to take
half of their mortgage as a 5 year fixed rate mortgage and the other
half as a variable rate mortgage. Click
here to read more.
Monthly Review of Interest Rate
Forecasts from the Major Banks
The major banks did not release
any new interest rate predictions during the month of May. I
could only find forecast tables showing their expectation that the
Bank of Canada overnight rate (which is tied to the Chartered
Bank prime rate) will not be rising until mid-2010.
Click here to read more
Tips for Boosting
Affordability
Lower mortgage rates have meant
increased affordability for home buyers. For first-time buyers
looking for a home of their own, there are some ways to further
increase mortgage affordability and stretch one’s housing
dollar. Click
here to learn how to boost your
affordability.
Are you working with a
professional?
What exactly is a professional?
Here's my definition:
1) An expert in his field
2) Responds quickly to all emails and
phone calls
3) A person with the highest level
of integrity - Will only recommend products and services that
are in your best interest. If I do not have the right product
for you, I will point you in the right direction.
4) No pressure, hype or mind games -
only honest advice.
Relevant
Links
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