Home Mortgage Rates

Term Rate
Prime 3.00%
Variable 2.90%
1 Year 2.89%
3 Year 2.89%
4 Year 3.19%
5 Year 3.19%
10 Year 3.99%

Qualifying Rate

Feb 22 5.14%

Current Inflation

Jan 2.5%

5 Year Bond Yield

Feb 22 1.49%

Next Bank of Canada Meeting
Mar 8th, 2012

Special conditions apply
Mortgage Rates subject to change.

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This morning (February 28, 2011) the Canadian dollar hit a 3 year high of almost $103 in comparison to the USD. This is going to cause some damage for our export market. Inflation is currently clocked at 2.3% which is 0.3% higher than the government would like to see it. The overnight lending rate is generally increased to curb inflation. GDP (gross domestic product) is also higher than expected indicating a recent improvement in the economy. Again, an indicator that we could handle a small increase in the overnight lending rate.

Other than the high Canadian dollar, these factors should lead to an increase of 25 bps (basis points). All this only really affects the variable (floating) rates. Whereas the fixed rates are primarily dictated by the bond yield which has actually dropped slightly since the last big fixed rate increase. With this in mind and the inflation at our door steps, an increase in the overnight lending rate is expected tomorrow. I predict a 1/4 point but this is just a guess. We don’t expect much of a jump because our economy can’t handle it. We are still close to the lowest rates in Canadian history, floating rates really have only one place to go… up.

Please CLICK HERE to calculate the effects of this potential interest rate change on your mortgage payment.

Own your life,

Jessi Johnson

Vancouver is becoming unaffordable with the new mortgage rules taking affect March 18th.  Here are some quick details you might find interesting:

  • The average person makes about 50k in Vancouver which already makes it viritally impossible to purchase even when using a 35 year amortization unless a partner or co-signer is involved.
  • This typical person with roughly 5k in credit card debt can only purchase a 280k condo with 5% down (using a 4% rate & $300 strata payment).
  • Lets now increase the interest rate by only 1% to 5% and reduce the amortization (according to the new rules) to 30 years to see what happens… Now this person can only make a purchase of 230k.
  • You can’t buy a closet for that in Vancouver, the average condo in Vancouver sells for $390,935 according to the Real Estate Board of Greater Vancouver as of January 2011.
  • When rates hit 6%, it will even become diffcult for two people to team up and buy condo in Vancouver.
  • If you ask me, real estate sales outside Vancouver are going to raise sharply in the coming years.
  • Projects sites like Mirra in Surrey (www.mirraliving.com) with condo’s starting around 150k are looking pretty good these days.

Although March 18th is the deadline, you don’t have to close before this date. As long as you have a secured deal (subjects removed and deposit paid), you can close after March 18th but before your commitment expires.

Please call us directly to discuss this topic or comment below.