Montreal Real Estate Blog » mortgage

Mortgage Rates Going Up: five-year fixed goes to 5.54 %

Deya Bautista — Thu, 07 Jul 2011 11:38:27 +0000

An article by the Canadian Press:

Several of Canada’s big banks announced increases in their residential mortgage rates effective Tuesday.

Royal Bank (TSX:RY), TD Bank (TSX:TD) and Laurentian Bank (TSX:LB) all raised the posted rate for a five-year fixed-rate mortgage by 0.15 percentage points to 5.54 per cent.

Royal Bank raised its special offer rate for a five-year mortgage by 0.15 percentage points to 4.39 per cent, while TD and Laurentian raised their special offer rates for a five-year fixed-rate mortgage by 0.15 percentage points to 4.29 per cent.

Most other special and fixed rates at the banks were also going up between 0.10 and 0.15 percentage points.

Fixed rate mortgage rates are affected by the cost of borrowing in the bond market, where banks finance their home loan lending.

But, there is no reason to panic. If you’re looking for good rates, there are many options available for you. Here is a snapshot of today’s rates by RateDirect.ca – contact Danuta for more info

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

Bank of Canada Boosts Prime Rate at 3%

Deya Bautista — Mon, 13 Sep 2010 11:00:22 +0000

Bank of Canada governor Mark Carney raised the overnight lending rate a 0.25% point on Wednesday morning.

CTV News reports:
The decision marks the third straight month that the central bank has boosted the rate, which was set at a rock-bottom 0.25 per cent during the recession.

The overnight lending rate affects short-term borrowing, such as variable-rate mortgages and some lines of credit.

The steady rise over the last few months suggests the Bank of Canada sees Canada’s economy rebounding and no longer feels interest rates need to be at virtually zero in order to stimulate recovery.

Well, considering that back in January 2007 the prime rate was at 6%, we are not doing so bad right now.

New Rules for Canadian Mortgages

Deya Bautista — Thu, 18 Feb 2010 12:20:31 +0000

You’ve probably read about the new regulations regarding Canadian mortgages for buyers/ investors and home owners wanting to re-finance. In case you haven’t been following, here is the scoop.

Three changes will come in effect on April 19:

Qualification: All borrowers will need to meet standards for five-year fixed-rate mortgages regardless of whether they’re seeking a loan with a lower rate and shorter term.
Refinancing: The government is lowering the maximum amount Canadians can withdraw when refinancing a home to 90% of its value, from the current 95%.
Speculation: It will be required a 20% down payment for government-backed mortgage insurance on “speculative” investment properties. As opposed to 5% down-payment for investments not occupied by the owner.

I’ve posted a list of articles written by the media. You can also check out The Canadian Mortgage Trends for an interesting and detailed post.

Wednesday Links: Mortgage Rules in the Media

Deya Bautista — Wed, 17 Feb 2010 21:56:56 +0000

Reckless speculators get a cold shower – The Globe and Mail
Ottawa’s decision to hike minimum down payment required to obtain insurance on investment homes likely to have immediate effect.

Don’t worry, home loan rules can still be bent - The Montreal Gazette
The good news or bad news, depending on your perspective, is you can still buy a home in Canada with almost no money…

Home buying rush expected in spring - The Globe and Mail
That may be the calm before the storm. Analysts expect a hot spring real estate market given Finance Minister Jim Flaherty’s move to tighten mortgage standards yesterday.

The trouble with bubbles: They’re elusive – The Globe and Mail
Some say government spending has overinflated global assets; but even the best minds have missed calling most collapses

Real Estate Market News: Morning Edition

Deya Bautista — Wed, 17 Dec 2008 15:54:30 +0000

Housing sales fall sharply in Canada: MLS [CBC News]
“The number of homes sold through the Multiple Listing Service dropped to 27,743 units in November — the lowest level recorded since January 2001, the Canadian Real Estate Association said Monday.”

Fed Cuts to ~0% and Prints Money [Canadian Mortgage Trends]
“Many think they’re getting ready for another rate cut on January 20. If so, that would be a boon for variable-rate mortgage holders (assuming banks pass along the cut). Canada’s key policy rate is currently at 1.50% so there is room for the BoC drop more.”

Undivided Co-ownership: Mortgage and Financing

Deya Bautista — Mon, 01 Dec 2008 18:36:54 +0000

If you are looking to buying into a Co-propriété with a 15% down payment, start looking else where. The minimum down payment is 20%, and depending on the bank financing it, could be even higher than that: 30 – 35%. These types of properties are NOT covered by the CMHC (Canadian Mortgage and Housing Corporation).

While talking about financing, it’s important to mention that many major lending institutions do not offer mortgages for undivided Co-ownership types of buildings. The reason for this? We don’t have the foggiest idea. But, we can safely assume that since this is still a fairly new way of ownership, not every bank is ready to just jump into the “undivided co-owership wagon”. The two banks we’ve noticed the most offering financing for undivisions are: TD Canada Trust and Caisse Popular Desjardins.

Shared common costs:
Unlike condo owners, the co-proprietors share the tax bills: property and school. Renovation and maintenance fees are also part of the shared costs, much like the condo fees. The most appealing part about buying into an undivided property, according to recent buyers, is that you get to split the costly annual property tax bill. But is that good enough reason to own shares into a property as opposed to buying your own? The decision is yours, dear buyer.

If you have questions regarding condo purchasing, or require assistance, contact us

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Canadian Government injects $75-Billion into the financial system. Lower interest rates ahead.

Deya Bautista — Mon, 24 Nov 2008 14:54:53 +0000

Great news for home buyers. This is a clipping from the Newsletter of the Montreal Real Estate Board. The government injecting money to maintain the market growing, although no news for the 40 year mortgage or zero percent down payment- and we all wish it remains that way. If you can’t afford to buy, then you should not get a mortgage. But for those with the means, lower interest rates are coming ahead.

Federal Government’s $75-Billion Purchase of Insured Mortgages Should Benefit Home Buyers

As part of its efforts to address the current financial crisis, the federal government announced that it will inject $75 billion of new money* into the financial system, by buying insured mortgage pools from Canadian financial institutions.

The purpose of this measure is to add liquidity to financial institutions – money they can then lend to businesses and consumers. The main effect of such an initiative is to increase the availability of credit while, at the same time, making the cost of credit more affordable. As a result of this plan, financial institutions’ mortgage interest rates should drop, which is likely to stimulate activity on the resale market.

This announcement is good news for our financial system and for the economy in general. Ultimately, it is borrowers who will benefit from this initiative, particularly future home buyers.

This federal government intervention was made necessary by the fact that the financial crisis has led to a significant reduction in the amount of credit made available by the private sector and, as a result, higher costs. In this context, banks’ financing costs increase, which translates into higher prime rates and mortgage rates.

The purchase will be made through the Canada Mortgage and Housing Corporation (CMHC) and will focus exclusively on mortgages that are already insured under its mortgage loan insurance program.

*Minister of Finance, Jim Flaherty, made an initial announcement of $25 billion last October 10, and announced an additional $50 billion on November 12.