Toronto Mortgage Broker Brad Compton gives his thought on where variable and fixed mortgage rates are heading in the coming months. See how banks determine what they are going to charge for their fixed and variable mortgage rates. Also get up to date on the most recent changes to mortgages in Canada
23. Variable Rates - BOC Affect
•The Bank of Canada Prime lending rate - .25%
24. Variable Rates - BOC Affect
•The Bank of Canada Prime lending rate - .25%
•Banks add allowances for risk and admin costs - 2.25%
25. Variable Rates - BOC Affect
•The Bank of Canada Prime lending rate - .25%
•Banks add allowances for risk and admin costs - 2.25%
•Variable mortgages usually have a discount to prime
26. Variable Rates - BOC Affect
•The Bank of Canada Prime lending rate - .25%
•Banks add allowances for risk and admin costs - 2.25%
•Variable mortgages usually have a discount to prime
•Lines of credit and open mortgages usually have a
premium added
27. Variable Rates - BOC Affect
•The Bank of Canada Prime lending rate - .25%
•Banks add allowances for risk and admin costs - 2.25%
•Variable mortgages usually have a discount to prime
•Lines of credit and open mortgages usually have a
premium added
•Some variable mortgages keep payments the same
with rate fluctuations - ARM & VRM
28. Variable Rates - BOC Affect
•The Bank of Canada Prime lending rate - .25%
•Banks add allowances for risk and admin costs - 2.25%
•Variable mortgages usually have a discount to prime
•Lines of credit and open mortgages usually have a
premium added
•Some variable mortgages keep payments the same
with rate fluctuations - ARM & VRM
•Some lenders will adjust payments monthly and some
are quarterly
33. Variable Rate Outlook
•Bank of Canada will be raising the prime rate in June/
July
•Increase should be gradual 1-1.5% by end of 2011
34. Variable Rate Outlook
•Bank of Canada will be raising the prime rate in June/
July
•Increase should be gradual 1-1.5% by end of 2011
•US economy still weak resulting in little rate movement
south of the border
35. Variable Rate Outlook
•Bank of Canada will be raising the prime rate in June/
July
•Increase should be gradual 1-1.5% by end of 2011
•US economy still weak resulting in little rate movement
south of the border
•Don’t want to repeat history - 1992 and 2002 Canada
raised rates too quick only to reverse within months
38. How To Protect
•Get pre-approved - Lock in rate for 120 days
•Look at refinanicng - break mortgage - ask lender to
blend and extend
39. How To Protect
•Get pre-approved - Lock in rate for 120 days
•Look at refinanicng - break mortgage - ask lender to
blend and extend
•Longer term mortgage
40. How To Protect
•Get pre-approved - Lock in rate for 120 days
•Look at refinanicng - break mortgage - ask lender to
blend and extend
•Longer term mortgage
•Mixed mortgage - part variable and part fixed
41. How To Protect
•Get pre-approved - Lock in rate for 120 days
•Look at refinanicng - break mortgage - ask lender to
blend and extend
•Longer term mortgage
•Mixed mortgage - part variable and part fixed
•Look at locking in variable
45. New Mortgage Regulations
•Minimum 20% down for rentals under 5 units
•Only 50% of rental income can be used to qualify
•Qualifying interest rate on variable & terms under 5
years now posted rate - 6.10%
46. New Mortgage Regulations
•Minimum 20% down for rentals under 5 units
•Only 50% of rental income can be used to qualify
•Qualifying interest rate on variable & terms under 5
years now posted rate - 6.10%
•Refinances up to 90% LTV only
47. New Mortgage Regulations
•Minimum 20% down for rentals under 5 units
•Only 50% of rental income can be used to qualify
•Qualifying interest rate on variable & terms under 5
years now posted rate - 6.10%
•Refinances up to 90% LTV only
•Stated income program only applies to individuals who
have been self employed for less than 3 years on
purchases up to 90% and refi’s up to 85%
Give predictions - Economy recovering faster, inflation higher than predicted. Carney reminds us that the conditional promise of leaving rates alone until mid 2010 is based on keeping inflation in check. The longer we go the more severe the rate correction will have to be
Give Cautions - US economy is still sluggish.
Give predictions - Economy recovering faster, inflation higher than predicted. Carney reminds us that the conditional promise of leaving rates alone until mid 2010 is based on keeping inflation in check. The longer we go the more severe the rate correction will have to be
Give Cautions - US economy is still sluggish.