1. Interest Rates What does the future hold? Presented by: Brad Compton

2. Tonight’s Discussion Fixed vs. Variable What drives rates? Where have we been? Where are we going? New Mortgage rules

3. Fixed VS. Variable

4. Fixed VS. Variable

5. What Drives Rates Variable – Bank of Canada Fixed – Canadian Bond market Bond Yield Mortgage Rate Expenses Risk Profit

6. 10 Year Stats 3.00% Average Prime Rate: 4.46% Highest Prime: 7.25% Lowest Prime: 2.25% Average Fixed: 6.49% Highest Fixed: 7.75% Lowest Fixed: 5.19% 5.24%

7. Where Are We Going? UP WHEN???

8. Where Are We Going? Variable – Overnight Index Swaps (OIS)

9. Where Are We Going Canadian 5 yr Bond Yields

10. New Mortgage Rules Reduced amortization to 30 years Refinances up to 85% CMHC no longer backing HELOCs March 17th deadline

11. New Mortgage Rules Financial Ruin!

12. New Mortgage Rules Roughly 30% of mortgages last year had 35 yr amortization. Most were FTHB TD estimates the amortization decrease will impact 20,000 sales Amortization reduction will drop average affordability by 6-7% Roughly 10% of mortgages currently refi above 85% Current default rate of .42%

13. New Mortgage Rules

14. New Mortgage Rules Default rate below .5% CMHC Net Income $931M 71% of book is on loans with an LTV of less than 80% 9% return on securitization activity

15. Who is Responsible?

18. Thank You Brad Compton Invis Mortgage Agent Twitter: bcomp123 www.YourLowMortgage.ca