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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There’s competition and then there’s competition with the Big Five, as a handful of Vancouver brokers point to banks and, even, credit unions now willing to eat their own substantial penalties in order to keep clients from going over to the broker channel.

“I had heard about this occurring back in the day – in the 80s or 90s – but it hadn’t ever encountered this until recently,” Jessi Johnson, president of Verico Jessi Johnson Mortgage Team, told MortgageBrokerNews.ca. “I’ve had about three or four recent cases where the banks were willing to eat the penalty in order to keep a refinancing client”. The scenario is similar to those of a handful of brokers working the increasingly competitive Vancouver market, as banks and large credit unions sharpen their elbows in order to grow and retain clients. That contest has been largely limited to rate wars. The newfound willingness of banks to assume responsibility for penalties attached to premature closing is a relatively new and disturbing addition to the battlefield, said Johnson. Other brokers suggest the tool is being applied at the branch level, and outside of any corporate-wide policy directive. The effects, regardless, are the same. When it comes to a lender eating a penalty that is larger than the commission they’re paying brokers,” said Johnson, “we as brokers can’t compete. Thankfully, we’re seeing it used in a limited number of cases and it represents an unsustainable strategy for the banks.”

Banks, and other institutional lenders have traditionally used penalties , including an IRD – a rate equal to the difference between the original mortgage rate and the interest that the lender could charge today for the same mortgage– to compensate themselves when a client opts to pay off a fixed-rate mortgage prior to maturity. That penalty has actually grown as lenders lower their rates to keep pace with falling bond yields. It makes the willingness of some lenders to now forfeit those charges all the more remarkable.

Todd Fralic, an industry veteran and partner at Quantus Mortgage Solutions in Calgary, has seen the approach before, although without the rate match that Johnson and others are pointing to.

“It happens,” he told MortgageBrokerNews.ca. “But usually, in our experience, the banks make it up on the back-end, with a slightly higher rate. Nothing surprises me with the banks offering deals that don’t seem to be good business.”

They’re not necessarily alone, with some brokers themselves offering to pay a prospective client’s penalty in order to get them to break an existing mortgage.

“Well I think having business is better than not having business, so in my opinion you should do whatever it takes to retain a client,” Jackson Cunningham, a broker with TMG The Mortgage Group in Vancouver, told MortgageBrokerNews. “Although I prefer to see something in writing from their bank before I will buy down a rate or pay for a penalty.” Still it’s not necessarily an approach he’s used, despite recently losing deals to banks that have, at least in one case, offered the eqivalent of prime minus 115 in order to retain a client.

Eating penalties may be even less sustainable for brokers than the banks, said Johnson, suggesting he’s done better by salvaging the client-broker relationship after the deal goes south…to the competition. “I’ve lost the deal but not the client,” he told MortgageBrokerNews.ca. “I plan to actively maintain my relationship with the client in hopes of winning back their business in the future.”

CLICK HERE to view the story on CMP’s website

By Vernon Clement Jones (CMP Magazine)

Even as originations through Realtors and clients slow across much of the industry, brokers are actively developing leads and closing deals originating on Twitter, Facebook and other social media platforms. “Originations from social media now account for 10 per cent of our portfolio,” Tom Lam, owner of Urban Mortgage, one of Canada’s fastest growing mortgage and real estate firms, told MortgageBrokerNews.ca. “That represents an increase of 100 per cent since we started two years ago. ”While quantifying the exact pulling power of Twitter and Facebook is harder for other brokerages, many are now pointing to similar gains as their salespeople add tweeting and posting to their daily routines.

“Leads from social media – Facebook and Twitter – and our newsletters account for 20 to 25 per cent of our leads,” Jessi Johnson, president of Verico Jessi Johnson Mortgage Team, told MortgageBrokerNews.ca. “It’s hard to know exactly what percentage of that is specifically from Facebook or Twitter or the newsletter, but I’m using social media to help me stay on the radar of prospective leads and to help me cement name recognition.” Johnson, in fact, has 15,000 followers on Twitter, one of the highest in the industry. It’s a carefully selected list of potential and existing clients, although the idea is to create a social connection as well as to help position himself as an expert on mortgages, said Johnson, one of the industry’s first to incorporate social media lead-generation methods into his marketing strategy. “About 25 per cent of my Tweets and my Facebook posts are personal,” he said. “If you talk mortgages all day, you’re going to bore people to death.”

Lam, who also opts for a softer sales technique, agrees.

“Rather than use Social Media as blatant request for business, we try hard to create content that is engaging,” he said. “Ultimately, we want our users to dialogue with us.”

Still, for brokers, the volume of users is key, say experts, with the most effective networks measured in the tens of thousands of followers and Facebook friends. Gaining that kind of audience is a challenge in itself, according to brokers who make a point of following prospective clients first in hopes they’ll reciprocate.

“By following someone, you’re paying them a compliment and they’ll usually follow you,” said Johnson. “You have to be on social media these days: it is the new method for communication; I have friends that don’t even read an email; you have to keep pretty active on it, though. Having a Twitter account of 200 or 300 people isn’t going to do anything for you.”

Still, even ardent believers in the power of social media to grow referral and, ultimately, deals, suggest it’s best used as a complement to more orthodox marketing tools, not a replacement.

CLICK HERE to view the story on CMP’s website

By Vernon Clement Jones (CMP Magazine)

CMHC Survey Shows Homebuyers Taking the Time to Plan

Canada Mortgage and Housing Corporation (CMHC) released its 2011 Mortgage Consumer Survey today providing insight into the attitudes and behaviours of Canadian mortgage consumers.

  • Internet appears to be the most popular location for research
  • 86% used an online mortgage calculator
  • Canadians take, on average, 11 months to plan their purchase
  • The majority of homebuyers (88%) indicated they had a good sense of how much mortgage they could afford before purchasing a home
  • 75% of recent homebuyers felt it is very important to pay-off their mortgage as soon as possible while many have already taken steps to do so
  • 39% of recent buyers have their mortgage payment set higher than the minimum required
  • 20% have made a lump-sum payment since taking out their mortgage
  • 80%, to some extent, follow a household budget
  • CLICK HERE for the full report
  • The on-line survey, which polled more than 3,500 active mortgage consumers who undertook a mortgage transaction within the previous 12 months

The survey also showed that during their mortgage research 23% of first time buyers received advice on budgeting while 18% received advice on managing debt. In addition, the survey found that one in four (25%) recent buyers is not sure where to go to receive reliable advice in case of financial difficulty.

We suggest you try calling a mortgage broker first!

(Source: CMHC & moi)

Tips for the first-time home buyers

More than ever, first–time homebuyers are weighing their options before embarking on the Canadian dream of owning a home. “We want consumers to be comfortable with the financial responsibilities of owning a home, so it’s important to determine what they can afford in order to maintain a reasonable lifestyle once they’ve made the leap and purchase. The following are key points to consider and review;

-    Determine your net worth – Take your assets (cash, investments, savings, vehicles and other items you own) and subtract your liabilities (car loans, lines of credit, overdrafts and credit cards). A positive number is a good sign that you may be ready to purchase your first home.

-    Obtain mortgage pre-approval – There are many different mortgage options available on the market today. Thoroughly investigate the terms and rates available, and once you have settled on a rate, term and amortization period, apply for mortgage pre–approval with your lender. Mortgage pre–approval presents you as a serious purchaser, to both real estate agents and sellers.

-    Hire a real estate agent – Top agents have extensive experience and demonstrate dedication and commitment to helping their clients. Ask your family and friends for a referral, or explore real estate sites to read profiles on agents, including their areas of expertise and languages spoken. A real estate agent will have knowledge of accurate, real–time market data to leverage your negotiating position, as well as access to properties often even before they are listed on MLS.