Category Archives: Mortgage Term

Make the Most of Low Mortgage Rates in 2012

Are you in the market for a mortgage renewal this year? Then pull up your socks, grab a mortgage calculator, and get ready to start saving some serious cash! If you’re one of the many Canadians who settled for a fixed-rate five-year mortgage back in 2007, chances are you’ve been kicking yourself ever since. At the time, locking in a 5 percent or higher interest rate seemed like a bargain – the market was hot, housing prices were high, and interest rates were on a continued climb.

And then the bubble burst, the U.S. economy toppled, and interest rates dropped to historic lows. Five-year fixed mortgage holders were left with massive payments while the rest of the country took advantage of some of the best mortgage rates ever.

But the tides are about to turn. Continue reading →

How Much Would an Interest Rate Increase Hurt Your Budget?

According to a recent study by the Bank of Montreal, four in ten Canadians would feel the pinch if best rate mortgages saw a two percent interest rate increase. The study, which was compiled by Leger Marketing, found that 43 percent of Canadian homeowners believe an interest rate increase would either hamper their ability to pay their mortgage or leave them on rocky financial footing.

The study also found that one out of every five Canadians surveyed felt that a two percent increase would hurt their ability to make their mortgage, while 23 percent were unsure how a hike would affect them. Just over half, 57 percent of respondents felt that they could still afford their home if interest rates were to increase (the survey was completed online with a national sample of 150 Canadians over the age of 18). Continue reading →

What Will the Budget Bring?

According to a report in the Globe and Mail, next week’s highly anticipated federal budget should only contain “modest” spending reductions and little to no intervention in the housing market. Finance Minister Jim Flaherty delivered these and other comments outside of a volunteer firefighter station in Ottawa last Thursday. During the announcement, Mr. Flaherty stated that he would like to see if the market could “correct itself,” rather than force new regulations into place.

Flaherty’s response comes after Canadian banks requested Ottawa to institue mortgage insurance regulations in order to avoid what many are foreseeing as a major housing crash. The nation’s largest banks have been calling for the government to either lower the maximum amortization period for insured mortgages or raise the required minimum down payment amount for best rate mortgages.

Continue reading →

Draft Guidelines: Residential Mortgage Underwriting Practices and Procedures

More stringent mortgage qualifications are on the way. On Tuesday, the Office of the Superintendent of Financial Institutions in Canada released draft recommendations that would impact Canada’s banks and other federally regulated lenders.

The 18 page document contained a slew of information, the majority of which make complete sense. However, there’s still great cause for concern in the financial sphere. According to this document, the OSFI is proposing a swift implementation that could shake the system off its foundations. One reputable mortgage source described the OSFI’s recommendations as a “policy-initiated free-fall”.

While we encourage home hunters to review the entire document (available via this link), here’s what best rate mortgage hunters need to know. Continue reading →

Low Mortgage Rates = False Sense of Security?

Historically low interest rates are making it easier for Canadians to enter the real estate market. Why continue to rent when a mortgage payment could be less than your current monthly lease? If you’re considering the here and now, buying makes perfect sense. With the help of a seasoned mortgage broker, you can easily secure a best rate mortgage that’s cost-effective – but what happens when the market shifts and interest rates begin to rise? Continue reading →