With the Canadian dollar riding high against the US dollar this will put pressure on Bank of Canada/Government to keep interest rates low.
When your mortgage is up for renewal you do have options. Believe it or not nearly 70% of Canadians sign their mortgage renewal letter without actually considering other options for a better rate or product. When you receive a renewal letter from your lender, the lender (mainly banks) will not offer you the best discount rate. They are hoping (and in most cases are correct) that you will just sign the renewal letter and send back to the lender. The lenders save allot of money by taken this approach.
Although amortization came down from 35 years to 30 years on March 18th, Canadians can still obtain 35 year amortization on conventional (non insured) mortgages.
Rule of thumb in Canada is that a borrower needs a minimum of 5% down payment to purchase a home and that the borrower can only borrow 95% of the purchase price of the home. This is true, however there is a program available where the borrower can receive 5% cash back along with the 95% mortgage from the lender to cover the 5% down payment. Not all lenders offer this program so that is why working with a Mortgage Broker is essential for all your mortgage financing needs. The program works like this.
Canada’s annual inflation rate fell slightly in February, giving the Bank of Canada room to keep interest rates low over the next few months, economists say.
Statistics Canada said Friday its consumer price index edged down one-tenth of a point to 2.2 per cent in February, with rising energy and gas prices keeping inflation just above the Bank of Canada’s ideal two per cent target.
Mortgage fixed rates edged lower yesterday with the averaging 5 year fixed dropping from 4.04% to 3.94%. With the variable mortgage holding steady at 2.30%, this is good news for home buyers entering the Spring real estate market.
Both fixed and variable rates are holding steady. 5 year fixed averaging 4.05% and 5 year variable averaging 2.25%.
The Bank of Canada met last week and left the variable/prime rate unchanged.
Report form CMHC
Housing starts will be in the range of 157,300 to 192,900 units in 2011, with a point forecast of 177,600 units. In 2012, housing starts will be in the range of 154,600 to 211,200 units, with a point forecast of 183,800 units.
The Bank Of Canada wanted to know what helps consumers get the best mortgage interest rate so they did a study among the top 10 mortgage lenders, below are some of the results
- Mortgage amortization periods will be reduced from 35 years to 30 years.
- The maximum amount Canadians can borrow to refinance their mortgages will be lowered from 90 per cent to 85 per cent of the value of their homes.
- The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit. (Effective April 18th, 2011)