No significant changes since my last email, with regard to rates.
Bank Rate still sits at 0.50%
Prime Rate is still 2.25%
Best 5 Year Fixed Rate is still 3.67% - 3.54 is available on a quick close FULLY closed 5 year term. Best Variable Rate is PRIME + 0.55% (Currently 2.80%) 4 year term - PRIME + .60% 5 year term (2.85%) What is really attracting attention is my new "EASY REFI" program that is exclusive to the lender currently offering the better mortgage options with a 3.67% 5 fixed year rate.
Under this program the lender pays for the legal fees, and appraisal fee for mortgage refinances. In the past, this was a program that the Bank's were only allowing for Mortgage Switches. But with a switch you can't change the mortgage amount, or alter the amortization. Now you can roll your penalty, or consolidate additional debts back onto your mortgage with no legal costs or a trip to a lawyer. The closing company will come to you on your schedule.
This is a great program if you are considering breaking your current fixed rate mortgage and have a penalty to do so, or are interested in converting from a variable rate mortgage to a fixed mortgage or you may want to lower your mortgage payment by extending the amortization, especially if you have had a recent change in employment.
With rates being at a historical 75 year low, many clients are using this opportunity to seek out the security of a 5 year fixed rate.
Waiting for the Bank of Canada to raise the Bank Rate could result in missing out on these great fixed rates. Fixed rates are not tied to the Bank Rate, the Bond market has a much greater effect on how the Banks position fixed rates and in the last 2 weeks, we have seen a 0.40% increase in the bond rates. This increase has not yet been reflected in mortgage rates. But one thing is for sure, there is a current upward pressure on fixed rates at this moment.
There are a few conditions that are applicable for this program, which nclude:
* Eligible mortgages to a maximum of 90% loan to value. If you need to refinance to 95% then we can still get the great rate - just not the free legals.
*The lender also has some minimum expectations on credit ratings to qualify for this program along with minimum mortgage amount of $100000.00.
If you would like some more information about the EASY REFI Program, please give me a call. Laurentian Bank just announced effective today they are raising their 5 year fixed by 0.20% to 3.99%. There is the first lender to start the increase.
Thanks,
David Kendall
Mortgage Agent License # M08004045
211 York Road, Unit 3, Dundas, Ont. L9H 1M9 OAC Mortgages Brokerage License # 10928 An independently owned and operated franchise of the Mortgage Alliance Network
You could win up to $100,000.00 toward your Mortgage!!!
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28 May 2009
27 May 2009
Mortgage Alliance’s Exclusive Mortgage Products
Mortgage Alliance and Oac Mortgages know the needs of their clients. With these needs in mind they have created three mortgage products that are available ONLY through Mortgage Alliance.
All mortgages are not the same. Find out more before you commit!
Right Mortgage®
Concept
Consumers are educated about how mortgage features affect interest rates and are able to select the features and privileges that they want when building their own RightMortgage®
This provides the consumer with choice and good counsel and competitive rates when building their mortgage.
This provides the consumer with choice and good counsel and competitive rates when building their mortgage.
Smart Mortgage™
Concept
Consumers are shown how to save money by paying the least amount of interest or using the SmartMortgage™ to achieve their financial or lifestyle goals. This provides the consumer with a tangible means of accomplishing their personal goals.
Habitat Mortgage™
Concept
Consumers who are socially conscious are able to support a cause that promotes homeownership for the less fortunate while we provide for their home financing needs. This provides the consumer to help themselves and at the same time, those less fortunate.
5 Year Bond Yield Increases
The 5 year bond yield ended up at 2.42. That’s 49 points over the last 30 days. Where-ever you are originating, it may make sense to get your 5 year fixed rate deals in before costs increase further and you start to see increases in the rates across the board.
27/04/2009 1.93
28/04/2009 1.97
29/04/2009 2.01
30/04/2009 2.02
01/05/2009 2.01
04/05/2009 2.03
05/05/2009 2.01
06/05/2009 2.03
07/05/2009 2.10
08/05/2009 2.14
11/05/2009 2.07
12/05/2009 2.10
13/05/2009 2.09
14/05/2009 2.11
15/05/2009 2.13
18/05/2009 Bank holiday
19/05/2009 2.16
20/05/2009 2.15
21/05/2009 2.26
22/05/2009 2.27
25/05/2009 2.28
27/04/2009 1.93
28/04/2009 1.97
29/04/2009 2.01
30/04/2009 2.02
01/05/2009 2.01
04/05/2009 2.03
05/05/2009 2.01
06/05/2009 2.03
07/05/2009 2.10
08/05/2009 2.14
11/05/2009 2.07
12/05/2009 2.10
13/05/2009 2.09
14/05/2009 2.11
15/05/2009 2.13
18/05/2009 Bank holiday
19/05/2009 2.16
20/05/2009 2.15
21/05/2009 2.26
22/05/2009 2.27
25/05/2009 2.28
22 May 2009
Mortgage Rates to Remain Stable: CMHC
Mortgage rates are expected to remain within 25 to 75 basis points of their current level for the remainder of 2009, according to CMHC's second quarter Housing Market Outlook, keeping them "very low in a historical context."
"Movements in mortgage rates are difficult to predict due to volatile economic conditions," the report stated. "Nevertheless, rates are expected to remain steady this year and edge higher in 2010."
Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebounding to 150,300 in 2010.
"The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007," said CMHC chief economist Bob Dugan.
"Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period."
"Movements in mortgage rates are difficult to predict due to volatile economic conditions," the report stated. "Nevertheless, rates are expected to remain steady this year and edge higher in 2010."
Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebounding to 150,300 in 2010.
"The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007," said CMHC chief economist Bob Dugan.
"Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period."
Avoiding the B Word...
Canadian media as of late has been focusing a lot on the increasing amount of mortgage arrears and foreclosure proceedings across the country. Calgary foreclosures, for instance, are up 71% from last year, and related stats show that total bankruptcies have increased 12.3%.
But that's not to say the industry wasn't prepared for the bad news. In fact, two mortgage insurers have even introduced consumer-targeted programs to assist cash-strapped homeowners who are having difficulty making payments (for reasons related to the current economy, such as job losses and over extension, as well as the same reasons that have always been around, such as marital breakdown and fraud).
Days after updated mortgage arrears stats were reported, Genworth expanded its HomeownerAssistance Program to include an online evaluator - a tool that can provide solutions once homeowners insert their financial data, such as how many more months they think they can afford to pay their mortgage. CMHC also introduced its Consumer Outreach Program, which is meant to inform cash-strapped homeowners through various mediums about the options available to them.
While both programs are designed to be a pre-emptive step geared at helping homeowners prepare for any conversations they may need to have with their lenders, the strong message that's being conveyed is that they are willing to work together with lenders and borrowers in order to keep people in their homes and stop the foreclosure stats from rising.
Avoiding bankruptcy
"We're at the beginning of a peak," said Paul Pauze, president of Bankruptcy Ontario, about the growing number of bankruptcies and mortgage foreclosures being reported. "People will scratch and claw before they feel they have to do something drastic like declare bankruptcy, so this is just the beginning."
Eric Putnam, a senior advisor with BDO New Beginnings, agrees, saying that there is a growing trend for homeowners to seek professional help when it comes to dealing with their tightening finances.
"The bankruptcy curve is definitely going up, but the proposals (the stage when borrowers propose an alternative payment plan to their lenders) are going up even faster and the credit counselors have never been busier," he said.
For people who either can't meet their payments or feel as if they won't be able to meet them soon, Pauze recommends an informal proposal to a creditor, which would avoid any use of the Bankruptcy Act and keep it off credit reports, he said. Results could range from lowering monthly payments to putting the amount in arrears back onto the principal of the loan to be paid.
"So many people are afraid to deal with the fact that they may be missing payments," he said. "They wait until it's almost too late (about 90 days into delinquency) to even begin looking for a solution, but the sooner they do the better off they are."
Putnam, who offers a similar service, can recall a deal involving a homeowner who was unemployed and missing payments on his mortgage. After doing the math it was deemed that keeping the house would actually be cheaper than renting and, fortunately, the grandfather had money "socked away" for a future inheritance that the borrower wasn't aware of.
"We did a basket proposal with his lender, which isn't the same as declaring bankruptcy but does fall under the act and comes off the credit report after three years," said Putnam.
The lender received a lump sum with a plan to receive the rest, and the client was allowed to keep his house, which is the important thing, said Putnam.
"People are scared of the bankruptcy word," he added, "so we mediate with the lender and insurer to prevent it at all costs."
No matter which way you put it, bankruptcy is a word no one wants to hear (including lenders) and should always be a last resort.
-Canadian Mortgage Broker News
At Mortgage Alliance - OAC Mortgages Inc. we are here to help! Give us a call! (905) 529-1199
But that's not to say the industry wasn't prepared for the bad news. In fact, two mortgage insurers have even introduced consumer-targeted programs to assist cash-strapped homeowners who are having difficulty making payments (for reasons related to the current economy, such as job losses and over extension, as well as the same reasons that have always been around, such as marital breakdown and fraud).
Days after updated mortgage arrears stats were reported, Genworth expanded its HomeownerAssistance Program to include an online evaluator - a tool that can provide solutions once homeowners insert their financial data, such as how many more months they think they can afford to pay their mortgage. CMHC also introduced its Consumer Outreach Program, which is meant to inform cash-strapped homeowners through various mediums about the options available to them.
While both programs are designed to be a pre-emptive step geared at helping homeowners prepare for any conversations they may need to have with their lenders, the strong message that's being conveyed is that they are willing to work together with lenders and borrowers in order to keep people in their homes and stop the foreclosure stats from rising.
Avoiding bankruptcy
"We're at the beginning of a peak," said Paul Pauze, president of Bankruptcy Ontario, about the growing number of bankruptcies and mortgage foreclosures being reported. "People will scratch and claw before they feel they have to do something drastic like declare bankruptcy, so this is just the beginning."
Eric Putnam, a senior advisor with BDO New Beginnings, agrees, saying that there is a growing trend for homeowners to seek professional help when it comes to dealing with their tightening finances.
"The bankruptcy curve is definitely going up, but the proposals (the stage when borrowers propose an alternative payment plan to their lenders) are going up even faster and the credit counselors have never been busier," he said.
For people who either can't meet their payments or feel as if they won't be able to meet them soon, Pauze recommends an informal proposal to a creditor, which would avoid any use of the Bankruptcy Act and keep it off credit reports, he said. Results could range from lowering monthly payments to putting the amount in arrears back onto the principal of the loan to be paid.
"So many people are afraid to deal with the fact that they may be missing payments," he said. "They wait until it's almost too late (about 90 days into delinquency) to even begin looking for a solution, but the sooner they do the better off they are."
Putnam, who offers a similar service, can recall a deal involving a homeowner who was unemployed and missing payments on his mortgage. After doing the math it was deemed that keeping the house would actually be cheaper than renting and, fortunately, the grandfather had money "socked away" for a future inheritance that the borrower wasn't aware of.
"We did a basket proposal with his lender, which isn't the same as declaring bankruptcy but does fall under the act and comes off the credit report after three years," said Putnam.
The lender received a lump sum with a plan to receive the rest, and the client was allowed to keep his house, which is the important thing, said Putnam.
"People are scared of the bankruptcy word," he added, "so we mediate with the lender and insurer to prevent it at all costs."
No matter which way you put it, bankruptcy is a word no one wants to hear (including lenders) and should always be a last resort.
-Canadian Mortgage Broker News
At Mortgage Alliance - OAC Mortgages Inc. we are here to help! Give us a call! (905) 529-1199
20 May 2009
Housing Activity Will Moderate in 2009, Improve in 2010
OTTAWA, May 19, 2009 — Housing starts are expected to decline to 141,900 for 2009, but increase to 150,300 for 2010, according to Canada Mortgage and Housing Corporation’s (CMHC) second quarter Housing Market Outlook, Canada Edition* report.
“The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007” said Bob Dugan, Chief Economist for CMHC. “However, housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period”.
Existing home sales, as measured by the Multiple Listing Service (MLS®)1, are expected to decline to 357,800 units in 2009 from 433,990 in 2008, but increase to 386,100 units in 2010. The average MLS® price is also expected to decrease to $283,100 in 2009 and to stabilize in 2010.
As Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC) draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country.
* The forecasts included in the Housing Market Outlook are based on information available as of April 30, 2009. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.
1 The term MLS® stands for Multiple Listing Service and is a registered trademark of the Canadian Real Estate Association (CREA). Data are for 10 provinces.
Information on this release:
Kristen ScheelCMHCMedia RelationsTel.: 613-748-2799kscheel@cmhc-schl.gc.ca
http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2009/2009-05-19-0815.cfm
“The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007” said Bob Dugan, Chief Economist for CMHC. “However, housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period”.
Existing home sales, as measured by the Multiple Listing Service (MLS®)1, are expected to decline to 357,800 units in 2009 from 433,990 in 2008, but increase to 386,100 units in 2010. The average MLS® price is also expected to decrease to $283,100 in 2009 and to stabilize in 2010.
As Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC) draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country.
* The forecasts included in the Housing Market Outlook are based on information available as of April 30, 2009. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.
1 The term MLS® stands for Multiple Listing Service and is a registered trademark of the Canadian Real Estate Association (CREA). Data are for 10 provinces.
Information on this release:
Kristen ScheelCMHCMedia RelationsTel.: 613-748-2799kscheel@cmhc-schl.gc.ca
http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2009/2009-05-19-0815.cfm
15 May 2009
Mortgage Alliance/MPH submitted over $1.5 Billion in volume for April
As forecasted, Mortgage Alliance/MPH submitted over $1.5 Billion in volume for April.
April was indeed a great month for our mortgage professionals - a remarkable feat of strength given current economic conditions and a stagnant real estate market.
This spring, we launched the largest brand campaign in Canadian mortgage brokerage history reaching over 50% of the population between the ages of 25-54 years of age with its radio messages.
The campaign generated over 2,000,000 hits to the Mortgage Alliance web-site with thousands of consumers who ended searching for their local Mortgage Alliance professional.
As Derek Lacey (a Senior Mortgage Alliance Professional in Cambridge, Ontario) stated, “I think we are probably the only company who are aggressively and intelligently speaking to consumers and offering them a preferable alternative to home financing through our product differentiation and lender relationships.” “I have never seen such an overwhelming response to a brand campaign and especially during these times – the Mortgage Alliance radio messages really captured the attention of consumers!”
April also saw Mortgage Alliance launch not one but TWO new mortgage products exclusive to its network of mortgage professionals – The Smart Mortgage™ and socially conscious Habitat Mortgage®. Both products have already demonstrated “better-than-predicted” sales results in a short 40 day period.
If that wasn’t enough, we launched a revolutionary new web-channel named MAC-TV.ca which communicates to our network of more than 1,800 mortgage professionals across the country on a weekly basis and will be targeted directly to consumers very soon.
All of this may explain why more mortgage professionals’ joined Mortgage Alliance last month than any other broker company. We’ve had more that 200 people join us so far in 2009.
All great news but we know why we’re number 1. It’s because of our people. There are lenders, there are brokers then there’s Mortgage Alliance Professionals. I believe all good mortgage brokers should work with Mortgage Alliance!
Michael Beckette
CEO - Mortgage Alliance
mbeckette@mortgagealliance.com
RIGHTBroker® - RIGHTMortgage® - RIGHTPlace®
April was indeed a great month for our mortgage professionals - a remarkable feat of strength given current economic conditions and a stagnant real estate market.
This spring, we launched the largest brand campaign in Canadian mortgage brokerage history reaching over 50% of the population between the ages of 25-54 years of age with its radio messages.
The campaign generated over 2,000,000 hits to the Mortgage Alliance web-site with thousands of consumers who ended searching for their local Mortgage Alliance professional.
As Derek Lacey (a Senior Mortgage Alliance Professional in Cambridge, Ontario) stated, “I think we are probably the only company who are aggressively and intelligently speaking to consumers and offering them a preferable alternative to home financing through our product differentiation and lender relationships.” “I have never seen such an overwhelming response to a brand campaign and especially during these times – the Mortgage Alliance radio messages really captured the attention of consumers!”
April also saw Mortgage Alliance launch not one but TWO new mortgage products exclusive to its network of mortgage professionals – The Smart Mortgage™ and socially conscious Habitat Mortgage®. Both products have already demonstrated “better-than-predicted” sales results in a short 40 day period.
If that wasn’t enough, we launched a revolutionary new web-channel named MAC-TV.ca which communicates to our network of more than 1,800 mortgage professionals across the country on a weekly basis and will be targeted directly to consumers very soon.
All of this may explain why more mortgage professionals’ joined Mortgage Alliance last month than any other broker company. We’ve had more that 200 people join us so far in 2009.
All great news but we know why we’re number 1. It’s because of our people. There are lenders, there are brokers then there’s Mortgage Alliance Professionals. I believe all good mortgage brokers should work with Mortgage Alliance!
Michael Beckette
CEO - Mortgage Alliance
mbeckette@mortgagealliance.com
RIGHTBroker® - RIGHTMortgage® - RIGHTPlace®
14 May 2009
How to Use Record Low Rates to Save Money...
If you’ve been struggling through the last few months—or years!—trying to keep up with high mortgage payments and snowballing credit card bills, there’s finally some relief in sight. Mortgage rates have been falling dramatically and are now at record lows. In fact they’re so low, in many cases homeowners can refinance their mortgage at a reduced rate, pay greatly reduced monthly payments AND pay off credit card debt at the same time.
To see if refinancing is right for you, the first step is talking to your mortgage adviser. I’ll do a free analysis of your mortgage to see how much equity is available and what your refinancing options are. Even if you have to pay a penalty to break out of your existing mortgage, that cost is usually more than covered by the interest savings.
Here’s an example of how much a typical homeowner can save by refinancing today. This example is based on a $400,000 mortgage taken out 5 years ago with a 30 year amortization and interest rate of 5.8%. The mortgage was refinanced at 3.95%, and $20,000 was extracted to pay off credit card debt which had an interest rate of 18%.
To see if refinancing is right for you, the first step is talking to your mortgage adviser. I’ll do a free analysis of your mortgage to see how much equity is available and what your refinancing options are. Even if you have to pay a penalty to break out of your existing mortgage, that cost is usually more than covered by the interest savings.
Here’s an example of how much a typical homeowner can save by refinancing today. This example is based on a $400,000 mortgage taken out 5 years ago with a 30 year amortization and interest rate of 5.8%. The mortgage was refinanced at 3.95%, and $20,000 was extracted to pay off credit card debt which had an interest rate of 18%.
Employee Mortgage Benefit Program (EMBP)
OAC Mortgages Inc. is excited to announce the introduction of our Employee Mortgage Benefit Program (EMBP).
OAC Mortgages compliments and works with our EMBP Partners to achieve the ultimate service in delivering value added programs to enhance their loyalty programs and company business philosophy.
The program aims to partner with various employers, creating an integrated, network, in order to offer numerous benefits to EMBP employers, employees, and clients. We want to offer a “Win, Win” for everyone participating as a Member of the Employee Benefit Program!
For more information about this program, please contact Krista Domsic, Mortgage Agent, Director of Business Development, (905) 529-1199, kdomsic@mortgagealliance.com.
OAC Mortgages compliments and works with our EMBP Partners to achieve the ultimate service in delivering value added programs to enhance their loyalty programs and company business philosophy.
The program aims to partner with various employers, creating an integrated, network, in order to offer numerous benefits to EMBP employers, employees, and clients. We want to offer a “Win, Win” for everyone participating as a Member of the Employee Benefit Program!
For more information about this program, please contact Krista Domsic, Mortgage Agent, Director of Business Development, (905) 529-1199, kdomsic@mortgagealliance.com.
Local Resale Housing Market Springs Back
(May 5, 2009 – Hamilton, Ontario) The Hamilton-Burlington area resale market reported a total of 1,232 units sold in April, indicating a decrease of 12.6 per cent over the same month last year, but an increase of 18.9 per cent over March. The total unit sales for the first four months of 2009 are being reported at 19.8 per cent lower for the same period last year, while new units listed are 4.3 per cent lower for the year-to-date, according to Multiple Listing Service® (MLS®) statistics released by the REALTORS® Association of Hamilton-Burlington (RAHB).
“The unusually warm weather in April reinvigorated the local real estate market, as the area witnessed increases in listings, sales and average prices when compared to the first three months of the year,” said Bruce King, RAHB President. “After the slight declines posted in the last two quarters, we are now seeing consumers warming up to real estate, with the average price in April back to where it was a year ago.”
Residential properties sold during April totalled 1,188 which included 972 freehold properties and 216 condominiums. Commercial sales for April, including industrial, farm, vacant land and business, totalled 44 units.
The average price of freehold residential properties sold in the month of April was $302,306, an increase of 0.3 per cent over last year. The average sale price reflects the dollar volume of residential sales divided by the number of total residential units sold.
In the condominium market the average price of condominiums in April was $213,673, a decrease of five per cent over the April 2008. April’s total residential average sales price realized no change compared to the same month in 2008.
The total number of units listed for sale during April was 2,012, which is 4.5 per cent fewer than were listed in the same period in 2008.
“We also saw another interest rate decrease in April, which will help make housing more affordable,” added King. “That, combined with some stability returning to the financial markets and banks and the levelling off of home prices will keep the local real estate market healthy.”
Unit sales reflect “all property types” including residential, condominiums, commercial property, farmland and sale of businesses.
“The unusually warm weather in April reinvigorated the local real estate market, as the area witnessed increases in listings, sales and average prices when compared to the first three months of the year,” said Bruce King, RAHB President. “After the slight declines posted in the last two quarters, we are now seeing consumers warming up to real estate, with the average price in April back to where it was a year ago.”
Residential properties sold during April totalled 1,188 which included 972 freehold properties and 216 condominiums. Commercial sales for April, including industrial, farm, vacant land and business, totalled 44 units.
The average price of freehold residential properties sold in the month of April was $302,306, an increase of 0.3 per cent over last year. The average sale price reflects the dollar volume of residential sales divided by the number of total residential units sold.
In the condominium market the average price of condominiums in April was $213,673, a decrease of five per cent over the April 2008. April’s total residential average sales price realized no change compared to the same month in 2008.
The total number of units listed for sale during April was 2,012, which is 4.5 per cent fewer than were listed in the same period in 2008.
“We also saw another interest rate decrease in April, which will help make housing more affordable,” added King. “That, combined with some stability returning to the financial markets and banks and the levelling off of home prices will keep the local real estate market healthy.”
Unit sales reflect “all property types” including residential, condominiums, commercial property, farmland and sale of businesses.
Dave's E-mail: 05/14/09 A Reason why the Canadian Real Estate market may not drop as much as the US
There is such an abundance of information out there, trying to predict if the recession is coming to an end, or has it even begun yet??…
Yes housing prices are showing signs of a reduction, but the question that I have been finding the toughest to answer is, “will we follow the US housing market, with substantial drops in housing prices?”
Previously my slant on this has been that the Canadian economy is not big enough to stand on its own, to not follow the US. However I recently came across this Youtube video which gives an opinion as to why prices are still falling in the US, and whether or not President Obama’s recent housing bail out will work.
This in itself may explain a part of why we are not dropping as fast as the US.
http://www.youtube.com/watch?v=wC315YLcbSw
We do not have the same surplus of new houses sitting vacant pulling down housing prices here in Canada.
However with this being said, there is still a downward pressure on the real estate market.
Last week, the most popular question my clients are asking is still the Fixed vs Variable rate question.
There are many clients basking in the glory of their Prime Minus… Variable rate mortgages. Some of my clients are actually currently at 1.25%, yes this is correct, WAIT before anyone responds asking for that same rate, No I can not get PRIME minus mortgages anymore. MY BEST VARAIBLE RATE IS PRIME + (plus) .55% or 2.80% APR for a 4 year term.
It has been real easy staying in a variable rate as the government has been taking drastic measures, dropping the Bank Rate on an almost monthly basis. With the Bank of Canada rate sitting at .25% there really is only one way for prime to go. UP…. At some point. No I don’t think it is going to go up next week or even the next couple of months, but one thing that is certain is that IT WILL INCREASE.
In a normal market, that would be when we leave the variable rate mortgage, and seek our Long Term Fixed rate mortgage. But when we are dealing with 75 year historical situations, it is difficult to count on anything being predictable.
My concern for the sit and wait position for the Variable rate mortgage clients is that once Prime starts to rise, the fixed rates we have available today may not necessarily be there..
The Bank of Canada Rate has dropped from 4.75% on Nov 2007 to .25% today………………… that is a staggering 4.50% drop.
But when you look at mortgage rates, they have not matched this drop. In fact they only reduced by less then half of the drop of the Bank of Canada.
Back in Nov 2007 we were offering a best 5 year fixed rate was 5.35%, today it sits at 3.57%..............only a drop of 1.78%.
This should be sending a very important message to the consumers.
One has to ask the question “WHY ????”
We can blame it on the losses the Canadian Banks had in the US, funding ninja mortgages….. I am sure that is part of it.
Another could be to cover the losses the Banks are having with the many clients sitting in the Prime minus mortgage portfolios.
But one of the latest developments has been the fact that the Bank’s are now actually “Securitizing” their entire mortgage portfolios with CMHC.
What does Securitizing a Mortgage Portfolio mean?
Up until recently, the only mortgages that were insured by CMHC were “High Ratio Mortgages”, meaning for those clients who want to put a mortgage on a property greater then 80% of the current value, then the consumer would have to pay for the insurance premium.
However in these volatile times the Bank’s are now insuring their entire mortgage portfolios. So even if your mortgage is at 50% of the current value, that mortgage will now be insured with CMHC. Now the Bank’s ideally would like the consumer to pay for this insurance premium on Conventional mortgages, but due to competitive purposes, they have chosen not to have the consumer pay for this cost. These premiums can be significant. If the new mortgage is currently at 80% of the current value of the property, and the client wants a 35 amortization, the premium the Bank is actually paying is 1.40% of the mortgage amount. This is having a significant cost on the over all profit of these new mortgages.
For a brief period of time we actually had lenders who were offering a lower mortgage rate for high ratio mortgages, because the consumer was paying for the insurance premium, not the Bank… Does this make sense, if your mortgage was at 50% of current value, your rate was higher then if it was at 95%. This eventually disappeared because not all Banks followed this same pricing strategy.
Bottom line I truly believe we are either at Rock Bottom on the 5 year rate, or are getting real close to the bottom…
Staying Variable is still getting you the lowest of the low….. But knowing you could have had 3.57% for the nest 5 years, waiting 2 - 6 months for prime to go up, could result in you now having to settle for a higher fixed rate. We are seeing increases in the Bond markets that will soon start to affect fixed mortgage rates.
So now you know why fixed rates have only dropped 1.78% instead of the full 4.50%
So please do not wait too long to call me.
Good news is because your actual rates are so low, being able to shop the open mortgage market is absolutely a possibility for most variable rate clients,, especially the ones in the Prime minus mortgages.
Yes, there would be a small penalty to get out of your current variable rate mortgage if you are not up for renewal… The clients in the current 1.25% mortgages would pay $312.50 per $100,000 of mortgage, but getting the lowest of the low 5 year fixed rate will more than offset that cost. A 0.25% lower 5 year fixed rate will save you almost $1250 over the next 5 years, and get you a lower monthly payment as well.
Please give me a call if you want to discuss your current mortgage options.
Thanks,
David Kendall
Mortgage Agent
License # M08004045
211 York Road, Unit 3, Dundas, Ont. L9H 1M9
OAC Mortgages Brokerage License # 10928
An independently owned and operated franchise of the Mortgage Alliance Network
Yes housing prices are showing signs of a reduction, but the question that I have been finding the toughest to answer is, “will we follow the US housing market, with substantial drops in housing prices?”
Previously my slant on this has been that the Canadian economy is not big enough to stand on its own, to not follow the US. However I recently came across this Youtube video which gives an opinion as to why prices are still falling in the US, and whether or not President Obama’s recent housing bail out will work.
This in itself may explain a part of why we are not dropping as fast as the US.
http://www.youtube.com/watch?v=wC315YLcbSw
We do not have the same surplus of new houses sitting vacant pulling down housing prices here in Canada.
However with this being said, there is still a downward pressure on the real estate market.
Last week, the most popular question my clients are asking is still the Fixed vs Variable rate question.
There are many clients basking in the glory of their Prime Minus… Variable rate mortgages. Some of my clients are actually currently at 1.25%, yes this is correct, WAIT before anyone responds asking for that same rate, No I can not get PRIME minus mortgages anymore. MY BEST VARAIBLE RATE IS PRIME + (plus) .55% or 2.80% APR for a 4 year term.
It has been real easy staying in a variable rate as the government has been taking drastic measures, dropping the Bank Rate on an almost monthly basis. With the Bank of Canada rate sitting at .25% there really is only one way for prime to go. UP…. At some point. No I don’t think it is going to go up next week or even the next couple of months, but one thing that is certain is that IT WILL INCREASE.
In a normal market, that would be when we leave the variable rate mortgage, and seek our Long Term Fixed rate mortgage. But when we are dealing with 75 year historical situations, it is difficult to count on anything being predictable.
My concern for the sit and wait position for the Variable rate mortgage clients is that once Prime starts to rise, the fixed rates we have available today may not necessarily be there..
The Bank of Canada Rate has dropped from 4.75% on Nov 2007 to .25% today………………… that is a staggering 4.50% drop.
But when you look at mortgage rates, they have not matched this drop. In fact they only reduced by less then half of the drop of the Bank of Canada.
Back in Nov 2007 we were offering a best 5 year fixed rate was 5.35%, today it sits at 3.57%..............only a drop of 1.78%.
This should be sending a very important message to the consumers.
One has to ask the question “WHY ????”
We can blame it on the losses the Canadian Banks had in the US, funding ninja mortgages….. I am sure that is part of it.
Another could be to cover the losses the Banks are having with the many clients sitting in the Prime minus mortgage portfolios.
But one of the latest developments has been the fact that the Bank’s are now actually “Securitizing” their entire mortgage portfolios with CMHC.
What does Securitizing a Mortgage Portfolio mean?
Up until recently, the only mortgages that were insured by CMHC were “High Ratio Mortgages”, meaning for those clients who want to put a mortgage on a property greater then 80% of the current value, then the consumer would have to pay for the insurance premium.
However in these volatile times the Bank’s are now insuring their entire mortgage portfolios. So even if your mortgage is at 50% of the current value, that mortgage will now be insured with CMHC. Now the Bank’s ideally would like the consumer to pay for this insurance premium on Conventional mortgages, but due to competitive purposes, they have chosen not to have the consumer pay for this cost. These premiums can be significant. If the new mortgage is currently at 80% of the current value of the property, and the client wants a 35 amortization, the premium the Bank is actually paying is 1.40% of the mortgage amount. This is having a significant cost on the over all profit of these new mortgages.
For a brief period of time we actually had lenders who were offering a lower mortgage rate for high ratio mortgages, because the consumer was paying for the insurance premium, not the Bank… Does this make sense, if your mortgage was at 50% of current value, your rate was higher then if it was at 95%. This eventually disappeared because not all Banks followed this same pricing strategy.
Bottom line I truly believe we are either at Rock Bottom on the 5 year rate, or are getting real close to the bottom…
Staying Variable is still getting you the lowest of the low….. But knowing you could have had 3.57% for the nest 5 years, waiting 2 - 6 months for prime to go up, could result in you now having to settle for a higher fixed rate. We are seeing increases in the Bond markets that will soon start to affect fixed mortgage rates.
So now you know why fixed rates have only dropped 1.78% instead of the full 4.50%
So please do not wait too long to call me.
Good news is because your actual rates are so low, being able to shop the open mortgage market is absolutely a possibility for most variable rate clients,, especially the ones in the Prime minus mortgages.
Yes, there would be a small penalty to get out of your current variable rate mortgage if you are not up for renewal… The clients in the current 1.25% mortgages would pay $312.50 per $100,000 of mortgage, but getting the lowest of the low 5 year fixed rate will more than offset that cost. A 0.25% lower 5 year fixed rate will save you almost $1250 over the next 5 years, and get you a lower monthly payment as well.
Please give me a call if you want to discuss your current mortgage options.
Thanks,
David Kendall
Mortgage Agent
License # M08004045
211 York Road, Unit 3, Dundas, Ont. L9H 1M9
OAC Mortgages Brokerage License # 10928
An independently owned and operated franchise of the Mortgage Alliance Network
1 May 2009
Bank of Canada Interest Rate
March 3, 2009 0.50%
April 21, 2009 0.25%*
June 4, 2009 Next meeting date
Source: Bank of Canada
* Bank of Canada indicated it would keep interest rate at this level until June 2010
Bank Prime Lending Rate
March 4, 2009 2.50%
April 22, 2009 2.25%
June 5, 2009 Next meeting date
Source: Bank of Canada
US Federal Reserve Board Discount Rate
March 18, 2008 0.00–0.25%
Arpil 29, 2009 0.00–0.25%
June 24, 2009 Next meeting date
Source: US Federal Reserve
Exchange Rate ($CDN/$US)
Exchange Rate ($CDN/$US)
$CDN/$US March 30, 2009 0.7925
$CDN/$US April 9, 2009 0.8162
$CDN/$US April 29, 2009 0.8313
Source:Bank of Canada
Government of Canada Bonds
Bond Type March 25, 2009 April 8, 2009 April 22, 2009
1 Year Treasury Bill 0.61% 0.64% 0.47%
3 Year Benchmark Bond Yield 1.51% 1.38% 1.36%
5 Year Benchmark Bond Yield 1.95% 1.82% 1.89%
10 Year Benchmark Bond Yield 2.96% 2.89% 2.93%
Source: Bank of Canada
Total New Housing Starts (Seasonable adjusted and annualized)
Province January 2009 January 2008 February
2009 February
2008 March
2009 March
2008
Newfoundland/Labrador 3,900 2,400 3,200 2,800 3,300 3,400
PEI 500 500 500 1,000 400 500
Nova Scotia 2,600 3,300 4,700 4,300 3,800 10,300
New Brunswick 3,500 4,500 3,200 3,800 3,400 4,300
Quebec 43,500 47,900 36,900 53,800 43,600 45,700
Ontario 53,400 72,700 47,100 81,800 62,600 80,000
Manitoba 3,100 5,800 3,700 5,600 3,500 4,700
Saskatchewan 2,200 6,000 2,300 6,600 2,100 6,700
Alberta 15,700 41,700 12,600 34,200 11,900 55,100
British Columbia 15,700 38,900 14,200 49,900 11,900 32,300
CANADA 144,100 222,700 128,400 243,800 146,500 243,000
Source: CMHC Housing Now – April 2009 and April 2008. This seasonally adjusted data goes through stages of revision at different times of the year.
Average MLS resale price for local markets
City March 2008 March 2009
Halifax $226,015 $229,548
Saint John $140,491 $158,731
Montreal $250,451 $254,502
Ottawa $288,152 $287,911
Toronto $380,338 $362,050
Hamilton/Burlington $289,226 $263,120
Winnipeg $203,504 $211,408
Saskatoon $289,440 $266,720
Calgary $419,390 $372,114
Edmonton $343,760 $309,032
Vancouver $616,496 $530,763
Victoria $504,194 $441,380
Source: Canadian Real Estate Association
Quarterly House Price Survey
Standard Two Storey
Market Q1 2009 Average Last Quarter Average Q1 2008 Average 2 Storey % Change
Halifax 242,000 240,000 229,000 5.7%
Charlottetown 188,000 188,000 185,000 1.6%
Moncton 134,500 126,000 135,300 -0.6%
Fredericton 210,000 210,000 197,000 6.6%
Saint John 268,000 294,695 264,000 1.5%
St. John's 265,000 261,800 229,333 15.6%
Montreal 330,056 334,850 332,389 -0.7%
Ottawa 318,500 320,083 309,833 2.8%
Toronto 516,052 522,050 545,750 -5.4%
Winnipeg 251,721 251,171 242,943 3.6%
Regina 245,000 245,000 227,500 7.7%
Saskatoon 348,500 348,500 395,000 -11.8%
Calgary 390,689 417,511 445,792 -12.4%
Edmonton 326,713 354,363 372,738 -12.3%
Vancouver 828,750 837,500 948,750 -12.6%
Victoria 435,000 433,000 460,000 -5.4%
National 379,636 385,777 401,040 -6.5%
Standard Condominium
Market Q1 2009 Average Last Quarter Average Q1 2008 Average Condo % Change
Halifax 144,000 144,000 130,000 10.8%
Charlottetown 120,000 120,000 120,000 0.0%
Moncton N/A N/A N/A N/A*
Fredericton 137,000 133,000 126,000 8.7%
Saint John 181,387 158,283 153,000 18.6%
St. John's 205,667 203,000 173,333 18.7%
Montreal 206,528 203,808 206,556 0.0%
Ottawa 207,833 207,833 198,083 4.9%
Toronto 289,397 296,895 298,662 -3.1%
Winnipeg 145,943 132,643 138,000 5.8%
Regina 168,806 172,917 160,917 4.9%
Saskatoon 187,000 186,500 220,000 -15.0%
Calgary 245,756 257,189 281,807 -12.8%
Edmonton 210,000 219,031 243,750 -13.8%
Vancouver 431,500 405,000 455,750 -5.3%
Victoria 260,000 265,000 294,000 -11.6%
National 232,877 233,462 241,152 -4.0%
Source: Royal LePage Real Estate. Quarterly House Price Survey, April 2009
March 3, 2009 0.50%
April 21, 2009 0.25%*
June 4, 2009 Next meeting date
Source: Bank of Canada
* Bank of Canada indicated it would keep interest rate at this level until June 2010
Bank Prime Lending Rate
March 4, 2009 2.50%
April 22, 2009 2.25%
June 5, 2009 Next meeting date
Source: Bank of Canada
US Federal Reserve Board Discount Rate
March 18, 2008 0.00–0.25%
Arpil 29, 2009 0.00–0.25%
June 24, 2009 Next meeting date
Source: US Federal Reserve
Exchange Rate ($CDN/$US)
Exchange Rate ($CDN/$US)
$CDN/$US March 30, 2009 0.7925
$CDN/$US April 9, 2009 0.8162
$CDN/$US April 29, 2009 0.8313
Source:Bank of Canada
Government of Canada Bonds
Bond Type March 25, 2009 April 8, 2009 April 22, 2009
1 Year Treasury Bill 0.61% 0.64% 0.47%
3 Year Benchmark Bond Yield 1.51% 1.38% 1.36%
5 Year Benchmark Bond Yield 1.95% 1.82% 1.89%
10 Year Benchmark Bond Yield 2.96% 2.89% 2.93%
Source: Bank of Canada
Total New Housing Starts (Seasonable adjusted and annualized)
Province January 2009 January 2008 February
2009 February
2008 March
2009 March
2008
Newfoundland/Labrador 3,900 2,400 3,200 2,800 3,300 3,400
PEI 500 500 500 1,000 400 500
Nova Scotia 2,600 3,300 4,700 4,300 3,800 10,300
New Brunswick 3,500 4,500 3,200 3,800 3,400 4,300
Quebec 43,500 47,900 36,900 53,800 43,600 45,700
Ontario 53,400 72,700 47,100 81,800 62,600 80,000
Manitoba 3,100 5,800 3,700 5,600 3,500 4,700
Saskatchewan 2,200 6,000 2,300 6,600 2,100 6,700
Alberta 15,700 41,700 12,600 34,200 11,900 55,100
British Columbia 15,700 38,900 14,200 49,900 11,900 32,300
CANADA 144,100 222,700 128,400 243,800 146,500 243,000
Source: CMHC Housing Now – April 2009 and April 2008. This seasonally adjusted data goes through stages of revision at different times of the year.
Average MLS resale price for local markets
City March 2008 March 2009
Halifax $226,015 $229,548
Saint John $140,491 $158,731
Montreal $250,451 $254,502
Ottawa $288,152 $287,911
Toronto $380,338 $362,050
Hamilton/Burlington $289,226 $263,120
Winnipeg $203,504 $211,408
Saskatoon $289,440 $266,720
Calgary $419,390 $372,114
Edmonton $343,760 $309,032
Vancouver $616,496 $530,763
Victoria $504,194 $441,380
Source: Canadian Real Estate Association
Quarterly House Price Survey
Standard Two Storey
Market Q1 2009 Average Last Quarter Average Q1 2008 Average 2 Storey % Change
Halifax 242,000 240,000 229,000 5.7%
Charlottetown 188,000 188,000 185,000 1.6%
Moncton 134,500 126,000 135,300 -0.6%
Fredericton 210,000 210,000 197,000 6.6%
Saint John 268,000 294,695 264,000 1.5%
St. John's 265,000 261,800 229,333 15.6%
Montreal 330,056 334,850 332,389 -0.7%
Ottawa 318,500 320,083 309,833 2.8%
Toronto 516,052 522,050 545,750 -5.4%
Winnipeg 251,721 251,171 242,943 3.6%
Regina 245,000 245,000 227,500 7.7%
Saskatoon 348,500 348,500 395,000 -11.8%
Calgary 390,689 417,511 445,792 -12.4%
Edmonton 326,713 354,363 372,738 -12.3%
Vancouver 828,750 837,500 948,750 -12.6%
Victoria 435,000 433,000 460,000 -5.4%
National 379,636 385,777 401,040 -6.5%
Standard Condominium
Market Q1 2009 Average Last Quarter Average Q1 2008 Average Condo % Change
Halifax 144,000 144,000 130,000 10.8%
Charlottetown 120,000 120,000 120,000 0.0%
Moncton N/A N/A N/A N/A*
Fredericton 137,000 133,000 126,000 8.7%
Saint John 181,387 158,283 153,000 18.6%
St. John's 205,667 203,000 173,333 18.7%
Montreal 206,528 203,808 206,556 0.0%
Ottawa 207,833 207,833 198,083 4.9%
Toronto 289,397 296,895 298,662 -3.1%
Winnipeg 145,943 132,643 138,000 5.8%
Regina 168,806 172,917 160,917 4.9%
Saskatoon 187,000 186,500 220,000 -15.0%
Calgary 245,756 257,189 281,807 -12.8%
Edmonton 210,000 219,031 243,750 -13.8%
Vancouver 431,500 405,000 455,750 -5.3%
Victoria 260,000 265,000 294,000 -11.6%
National 232,877 233,462 241,152 -4.0%
Source: Royal LePage Real Estate. Quarterly House Price Survey, April 2009
Press Release - Employee Mortgage Benefit Program!
New Mortgage Benefit Program to assist employers, employees and the Hamilton Burlington United Way.
Oac Mortgages (2009) Mortgage Alliance OAC Mortgages has implemented an Employee Mortgage Benefit Program (EMBP). This benefit program is offering companies a number of mortgage related benefits for their employees. In addition to all of the superb perks of the program participating companies will receive the benefit of cross promotion and integrated partner discounts.
Oac Mortgages Employee Mortgage Benefit Program (EMBP) allows companies to give employees direct access to professional mortgage education and consultation along with discounts on products and services available under the program. Registered companies and their employees will receive benefits that include access to the RightMortgage, wholesale furniture discounts, reduced legal costs, reduced home inspection fees and so much more.
Oac Mortgages is creating partnerships with respected businesses who our clients will need in the home buying, refinancing, renovation process. These discounts are exclusive through the EMBP program.
“This is a fantastic opportunity for both employers and employees,” says Krista Domsic, Director of Business Development, “Oac Mortgages EMBP program offers the opportunity to get the best products and offers in the mortgage industry and that means more then just great rates.”
There is a huge benefit to any company registered in our program in that 1% of Oac’s net mortgage proceeds, associated to the registered company, will be donated to the Hamilton and Burlington United Way in the name of the respective company.
In today’s economic conditions this is truly a win win for everyone in our community!
Stress specialist Heidi Cowie, President of Stresschat.ca, has partnered with EMBP seeing the benefits of financial assistance to employees as she has seen a noticeable rise in stress related problems with her clientele.
“The stress that is caused by worrying over how the economy will affect us causes a high level of disengagement in the workforce. It is estimated that 75% of employees are currently disengaged and absenteeism is on the rise. The cost of absenteeism alone, a “signal of disengagement” is estimated to be $16 billion per year. - for Canadian businesses.”
For all media inquiries please contact:
Lisette Amalfi, Amp
Mortgage Agent/Owner 905-529-1199
Krista Domsic
Mortgage Agent
Business Development Manager 905-529-1199
Oac Mortgages (2009) Mortgage Alliance OAC Mortgages has implemented an Employee Mortgage Benefit Program (EMBP). This benefit program is offering companies a number of mortgage related benefits for their employees. In addition to all of the superb perks of the program participating companies will receive the benefit of cross promotion and integrated partner discounts.
Oac Mortgages Employee Mortgage Benefit Program (EMBP) allows companies to give employees direct access to professional mortgage education and consultation along with discounts on products and services available under the program. Registered companies and their employees will receive benefits that include access to the RightMortgage, wholesale furniture discounts, reduced legal costs, reduced home inspection fees and so much more.
Oac Mortgages is creating partnerships with respected businesses who our clients will need in the home buying, refinancing, renovation process. These discounts are exclusive through the EMBP program.
“This is a fantastic opportunity for both employers and employees,” says Krista Domsic, Director of Business Development, “Oac Mortgages EMBP program offers the opportunity to get the best products and offers in the mortgage industry and that means more then just great rates.”
There is a huge benefit to any company registered in our program in that 1% of Oac’s net mortgage proceeds, associated to the registered company, will be donated to the Hamilton and Burlington United Way in the name of the respective company.
In today’s economic conditions this is truly a win win for everyone in our community!
Stress specialist Heidi Cowie, President of Stresschat.ca, has partnered with EMBP seeing the benefits of financial assistance to employees as she has seen a noticeable rise in stress related problems with her clientele.
“The stress that is caused by worrying over how the economy will affect us causes a high level of disengagement in the workforce. It is estimated that 75% of employees are currently disengaged and absenteeism is on the rise. The cost of absenteeism alone, a “signal of disengagement” is estimated to be $16 billion per year. - for Canadian businesses.”
For all media inquiries please contact:
Lisette Amalfi, Amp
Mortgage Agent/Owner 905-529-1199
Krista Domsic
Mortgage Agent
Business Development Manager 905-529-1199
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Mortgage Alliance Oac Mortgages
As a registered franchise of the Mortgage Alliance Network, we have a number of mortgage professionals who can bring you the choice, convenience, and counsel you need to get the RightMortgage®. Working with over 40 lenders (some offered exclusively through brokers) we'll provide unbiased guidance in your mortgage decision.
We are legislated by the Ministry of Finance FSCO and our brokerage license is 10928.
We are dedicated to educating our clients about their mortgage! We want you to be well informed and comfortable with the mortgage you have and the options available to you. This blog is intended to offer information, updates, current mortgage products and current rates.
Please provide your feedback and let us know if there is anything else we can provide to help you in your mortgage process.
We are legislated by the Ministry of Finance FSCO and our brokerage license is 10928.
We are dedicated to educating our clients about their mortgage! We want you to be well informed and comfortable with the mortgage you have and the options available to you. This blog is intended to offer information, updates, current mortgage products and current rates.
Please provide your feedback and let us know if there is anything else we can provide to help you in your mortgage process.
