Home Mortgage Rates

Next Bank of Canada Meeting
June 5th, 2012

 

Special conditions apply

Mortgage Rates subject to change.

Special conditions apply
Mortgage Rates subject to change.

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Will the mortgage rates go up or down?

It’s anybody’s guess. The age-old question is – do I opt for a fixed rate or a variable rate?  Headlines tell us the interest rates are going up and then the next day the news says the banks are cutting rates – it’s enough to make you wonder if anyone in the financial world really knows what’s going on.  It’s the market that really dictates what the Bank of Canada (BoC) does with the rates.

All indications are that we’re heading into a balanced real estate market. That means that interest rates will probably remain relatively stable and relatively low, as they are right now. So fixed or variable? Hands-down variable!

But there’s no rush to make the decision. With record low interest rates for both variable and fixed mortgages I can safely say that over the next six to 12 months the variable rate is still the way to go. Variable-rate mortgages will still outperform fixed-rate mortgages over the long-term. If you’re at all concerned about it, I can review your mortgage and advise you on the best way to proceed.

Also, if you opted for a fixed rate you may want to relook at it and crunch the numbers. We can then determine if you’re better off in the long run to pay the penalty and get into a variable rate.

Own Your Life,

Jessi

It’s not a bad thing to owe $1 trillion in mortgages

Don’t be scared off by the large amount of mortgage debt held by Canadians. It sounds like a large sum but perhaps we should be referring to is as an investment rather than a debt. Now that sounds better, doesn’t it? The $1 trillion dollars shouldn’t worry anyone. Yes, it is one type of debt, but a mortgage is really an investment in your future and will yield returns in the long term.

Most homeowners have built up good equity in their home in relation to what they owe on their mortgage and are managing their debt well.  That same report found that the majority of Canadians can afford to increase their mortgage payments by $300 a month.

Consumers also took advantage of low interest rates to borrow on their home equity to pay down other debt to improve their financial health – this is included in the $1 trillion dollars – this trend will likely continue while the rates remain low.  Other consumers borrowed for home improvements, which increases the equity in their homes.

This is really good news for consumers and for Canada. We’ve managed well through the global financial crisis, our banks are healthy and we’re managing our debt. Our interest rates remain low and the economy is stable. The housing market is trending toward balance, which is good news for first time home buyers. By next spring could well be in a buyer’s market as sellers lower their expectations and reduce the asking price of their homes.

So, don’t let that large good “debt” number scare you off. In fact, with the rates where they are, it may be a good time to look at your mortgage and possibly add to the $1 trillion number by borrowing on your equity to pay off some of your “bad” debt.

Until next time,

Jessi


Number of mortgage brokers in Canada continues to grow

If you know anything about the U.S. mortgage industry, then you know that mortgages brokers there have lost the confidence of the consumer public. It’s true there have been some shady dealings among brokers but the story is different here in Canada.

If you want the best rate possible then using a mortgage broker is your best bet. As a broker, I’ve always known this, and now it has been confirmed by Deloitte, a global consulting company. At one time consumers only came to us as a last resort, when they were turned down by the banks. But now we’re becoming the first choice among all consumers, whether you’re buying your first home, moving up or downsizing, or refinancing for home improvements. We attract prime customers who want options with their mortgages that a bank might not be able to give them.

The report also found that we brokers originate 38% of all mortgage loans through banks and non-bank lenders and we’re growing stronger.
That’s good news for you!  As lenders realize the power we have and the clients we can bring to them, they will naturally compete for your business. And with access to credit unions, trust companies, banks, non-banks and private lenders we can get you better than posted rates in most cases.

With all that said, don’t keep me a secret!

Until next time,

Jessi

November 2010 vs. 2000 Real Estate Stats

November 2000
1,730 detached, attached & apartment properties sold
$340,490 = Detached benchmark price
$218,520 = Attached benchmark price
$159,160 = Condo benchmark price

November 2010
2,509 detached, attached & apartment properties sold
$799,312 = Detached benchmark price
$488,733 = Attached benchmark price
$389,168 = Condo benchmark price

What does this mean?
145% increase on units sold in 2010 vs. 2000
235% increase in detached home value
224% increase in attached home value
245% increase in condo value

If your detached home is worth the Greater Vancouver average of $799,312 today. Statistically it could be work $1,875,185 in 10 years. That is a good feeling if you are a home owner.

November 2010 vs. 2000 Stats

November 2000
1,730 detached, attached & apartment properties sold
$340,490 = Detached benchmark price
$218,520 = Attached benchmark price
$159,160 = Condo benchmark price

November 2010
2,509 detached, attached & apartment properties sold
$799,312 = Detached benchmark price
$488,733 = Attached benchmark price
$389,168 = Condo benchmark price

What does this mean?
145% increase on units sold in 2010 vs. 2000
235% increase in detached home value
224% increase in attached home value
245% increase in condo value

If your detached home is worth the Greater Vancouver average of $799,312 today. Statistically it could be work $1,875,185 in 10 years. That is a good feeling if you are a home owner.

(Source: REBGV & Jessi Johnson)

Goal Setting Keeps Resolutions on Track

January is a popular time of year to set resolutions for physical fitness, personal finance or new career directions. But with the declaration of failed resolutions in February becoming as much of a ritual as the resolutions themselves, it’s worthwhile to take a look at how you approach setting and achieving your goals. Angus Reid polled Canadians on their goal-setting habits and found that, while most Canadians set goals regularly, many could benefit from some simple strategies to keep them on track. According to the survey, more than half of Canadians keep track of their goals using a ‘running list’ in their heads. Only about 15 percent write their goals down, while twice as many (30%) do not keep track of their goals even though they report aspiring to greater goals in life.

This latest survey is part of a growing body of research from American Express Canada that reveals a rising class of Canadians, know as ‘potentialists’, that take a focused approached to realizing their personal potential. Whether it is a desire to volunteer more, embark on adventure travel or learn a new skill, these ‘potentialists’ bring a proactive attitude to other pursuits, defining success based on how fully they are able to realize their aspirations. If you’re looking to broaden your resolutions this New Year, take some inspiration from potentialists and try one of the following ideas:

Track your goals like you track your finances
If you’d like to visit the African continent next summer to help build a school, ask yourself what you need to do tomorrow to get one step closer to that goal. If you don’t track your finances, there’s a new goal!

Pre-empt what might tempt
You should be hitting the books for that new language course but your favourite TV show beckons. Prepare yourself psychologically for temptations that will surely come your way and have a strategy and study schedule in place to deal with it before it happens.

Combat the fear factor
Twenty percent of Canadians surveyed cite ‘fear of failure’ as a reason why they don’t meet their goals. Recognize when irrational fears are getting in the way of your progress.

Willpower is like a muscle
Giving into little temptations can set off a domino effect. Be aware that if you don’t exercise willpower regularly, you may lose it.

(Source: News Canada)