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Long term mortgage rates for both 7 year and 10 year are now under 4%.  Having a mortgage locked in under 4% for next 7 to 10 years is an amazing option especially on a investment property.

OTTAWA – A new report finds low interest rates are keeping Canadian house prices within reach of homebuyers in many markets.

The Royal Bank’s quarterly report on housing trends, released early Friday, shows housing affordability improved slightly in the third quarter, after two consecutive quarters when things got worse.
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Mortgage Rate Increase:

Rates in the bond market ended last week considerably higher than where they opened, as optimism in the second half of the week outweighed some of the pessimism that presented itself on Monday and Tuesday. All told, the five year market moved about 15bps higher over the past week.
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TORONTO (Dow Jones)–Canadian housing starts rose 7.3% to an annual rate of 205,900 in September, mainly due to an increase in multiple starts, Canada Mortgage and Housing Corp. said Tuesday.
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Interesting article I pulled from CMT today.

Money market traders are now placing odds at 60% that the Bank O f Canada will cut its Key Lending Rate by May 2012. Yes, you read that right.
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I’m sure you’ve already read about how the US avoided default.  There was a huge rally yesterday in the bond market.  There could be movement in the fixed rates.    I will keep an eye out on bond yields.

Current 5 year fixed 120 day hold at 3.69%.  Current variable at 2.25%.  Short term variable at 2.20% matures in September 2014.  Interest rates are still historically low.

Over the past few months, major economists have backpedalled on their rate hike predictions.  Not long ago, the consensus of economists was projecting a July 19^th increase.  Now, those same analysts are not looking for a rate bump until this fall or later.  Some analyst believe there is 50/50 chance of rate increase this year.  Some of the reasons why interest rates are not going up are
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The Bank of Canada meet on Tuesday May 31^st to discuss interest rates and other economic matters.  The Bank is expected to leave interest rates unchanged.  Although Canada has being experiencing some good economic growth the unstable global economy and the strong loonie will force The Bank of Canada to sit tight for now.

When you set up your mortgage you have the option of choosing a mortgage payment frequency.  You can choose monthly, semi monthly, bi-weekly, weekly, accelerated bi weekly and accelerated weekly.  Accelerated bi weekly or accelerated weekly are more aggressive payment frequencies and can save you thousands of dollars in interest over the term and life of the mortgage.  Let us look at an example
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A handful of mortgage lenders started trimming the discount they offer on variable rate mortgage last week.  They have gone from prime -.75% to prime -.65% and in some cases prime -.50%.  So far four out the of the top ten mortgage brokers lenders have decreased rates.  The reason behind the tighten in the discount rate is the spreads that the lenders make on the product.  The product is not as profitable to the lenders as it once was.
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