Bank of Canada holds steady on rates, 2013 economic prediction


Bank of Canada holds steady on rates, 2013 economic prediction

Kevin Carmichael - Globe and Mail

The Bank of Canada is looking through weaker economic growth, opting to leave its benchmark interest rate unchanged, and holding to a prediction that Canada's economy should gather pace next year.


"In Canada, economic activity in the third quarter was weak, owing in part to transitory disruptions in the energy sector," the Bank of Canada said in a statement at the end of its latest round of policy deliberations Tuesday. "Although underlying momentum appears slightly softer than previously anticipated, the pace of economic growth is expected to pick up through 2013."

Click here to read the full article. 


Lowest Rates* in Canada

Term Our Rate Bank Rate
3 yr Fixed 2.74% 4.35%
5 yr Fixed 2.89% 5.35%
5 yr Variable 2.65% 4.00%
Updated : December 04, 2012
We have the best rates on a wide range of products.

Paramjeet Nagi

www.  or

What If Mortgage Rates Went Up?

What If Mortgage Rates Went Up?


Economic forecasters from coast to coast anticipate that The Bank of Canada will keep its key lending rate low. As it has remained unchanged for the past 25 months, it is anticipated that we will see minor changes through late 2013. Estimations are that 2014 will likely see more significant changes, and these changes will be impactful to the general consumer.

How impactful? 
Well let’s take a look at an example including the recent changes that we have seen to the amortization effective June, 2012.

If you had a $100,000.00 mortgage at the rate of 2.94%:

  • With an amortization of 30 years, your monthly payment would be $417.44
  • With an amortization of 25 years, your monthly payment would be $470.14
  • The difference is $52.72

If you had a $100,000.00 mortgage at modestly increased rate of 3.44%:

  • With an amortization of 30 years, your monthly payment would be $444.35
  • With an amortization of 25 years, your monthly payment would be $496.11
  • The difference of $51.76


These numbers may seem rather insignificant, but be mindful that the average residential home price in Canada was $368,000.00 in October 2012.

Based on the above information this difference with the amortization reduction and the inevitable rate increase is $78.67 per month x 3.68 = $289.50 monthly increase. Whatever your mortgage goals may be, today or in the future, these numbers are worth paying attention to.

Keeping up to date and apprised of the current market conditions, products and rates via your CENTUM Mortgage Professional, like myself, can in fact save you thousands of dollars. The above example based on a five year mortgage term turns into a savings of $16,346.40 over the sixty months.

Be aware of some of the posted “Best Rates”. If it sounds too good to be true it probably is. This can be the case with a large amount of “special” promotions. They can have tight constraints for early payouts, and in some cases you can’t pay the mortgages out during the term of the mortgage! Reduced anniversary payments and any changes to your monthly payments can command high administration fees.

If you would like more information about how I, as a CENTUM Mortgage Professional, can assist you in ensuring that your best interests are looked after, please do not hesitate to get in touch with me.

Paramjeet Nagi
Licence #: M08007836
Phone: (416) 884-1770
Web site:



Toronto Sales Up 14.5% in May


Toronto Sales Up 14.5% in May


Greater Toronto Realtors reported 5,142 transactions through the TorontoMLS® System during the first 14 days of May 2012. This result was up by more than 14.5 per cent in comparison to the first 14 days of May 2011. The number of new listings continued to grow at a slower pace than sales – up 13 per cent year-over-year to 8,749.

“Annual growth in sales was experienced across the GTA for all major home types in the first half of May. Sales growth was strongest for the condominium apartment segment. While the condo market has generally been the best supplied market over the past year, we have continued to see enough demand to exert moderate upward pressure on average selling prices in this market segment,” said Toronto Real Estate Board President Richard Silver.

The average selling price for transactions in the first 14 days of May was $517,242 – up by six per cent compared to the same period in 2011.

“A shortage of listings in the low-rise segment of the market has resulted in a lot of competition between buyers and above average annual rates of price growth. Tight market conditions are expected to remain in place for the balance of 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Summary of TorontoMLS® Sales and Average Price



May 1 - 14









Average Price


Average Price


City of Toronto ("416")






Rest of GTA ("905")

















TorontoMLS® Sales & Average Price By Home Type



May 1 - 14, 2012



Average Price
















Yr./Yr. % Change














Yr./Yr. % Change














Yr./Yr. % Change







Condo Apartment







Yr./Yr. % Change








Toronto Home Sales Up 18% in April


Toronto Home Sales Up 18% in April

Greater Toronto Realtors reported 10,350 transactions through the TorontoMLS® System in April 2012. This level of sales was 18 per cent higher than the 8,778 firm deals reported in April 2011. The strongest sales growth was reported in the single-detached market segment, with transactions of this home type up by 22%compared to a year ago.

“Interest in single-detached homes has been very high, both in the City of Toronto and surrounding regions. Growth in single-detached listings has not kept up with demand, which means competition between buyers in this market segment increased. With this in mind, it was no surprise that the strongest annual price increase was also experienced in the single-detached segment,” said Toronto Real Estate Board President, Richard Silver.

The average price for April 2012 transactions was $517,556 – up 8.5 per cent compared to April 2011. While price growth was strongest for single-detached homes, the better-supplied condominium apartment segment experienced a more moderate annual rate of price growth, at four per cent.

“Monthly mortgage payments remain affordable for home buyers in the Greater Toronto Area. While interest rates are generally expected to increase over the next two years, the extent and timing of rate hikes has been thrown into question by slower than expected economic growth in the first quarter of this year. On net, borrowing costs are expected to remain a positive factor influencing home sales through 2012,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

See Toronto Real Estate Market Watch report »

Understanding your credit score


What's Your Number?

You've most likely heard the term "credit score" in conversations about debt or borrowing and understand that it has an effect on our ability to take out loans and get a mortgage and that it's important to maintain good credit.

Do you know how your credit score is calculated or how to ensure your credit information is accurate? If you don't know, you're not alone.

Your credit score is a judgment about your financial health at a specific point in time. There are many ways to calculate your credit score, but the most common method is called the FICO Score. The FICO score was developed by the Fair Isaac Corporation, which uses statistics to measure the risk of someone defaulting by taking into account different factors in a person's financial history. Your credit score falls on a scale of 300 - 900. The higher your number, the better your credit score. This method is used by TransUnion, one of the major credit-reporting agencies in Canada. Equifax Canada uses a similar method called the Beacon Score.



Whether or not you are just starting to establish your credit or you have a long credit history, your credit score should always remain a priority. Reviewing your credit annually ensure that all of the information is accurate and that there are no unauthorized discrepancies. In some cases you can have a message added to your credit bureau for fraud prevention that ensures any credit applications presented need to be phone verified.  This diligence on your part could actually save you thousands of dollars.

Understanding how your credit score is calculated will also help you maintain a good rating for when you may need to go to a lender and ask for a mortgage or loan. Though the true calculation of the FICO score is a secret and probably far too complex for most to understand, here are the elements we do know:


Payment History - 35% 
Your ability to pay off your debt, like credit cards and phone bills, plays a big role in your credit score. It's important to always pay at least the minimum payment before or on the due date. If you ever get to see your credit score, you may see a list of letters and numbers like R1, O2, or I1, which are your credit ratings. The letter indicates the type of credit you are using (R=revolving credit, I=installments, O=open credit). The number ranges from 1-9. 1 meaning you pay within 30 days of payment due date, 9 meaning your credit's been placed for collection or bankruptcy.

Credit Utilization - 30%
Credit utilization is the ratio between the amount you owe and the credit limit you have (on all accounts). If you are over your limit this will have a significant impact on your score, or alternately using 90% of your approved limit will also have a negative effect.

Length of Credit History - 15%
According to the Financial Consumer Agency of Canada, research shows that consumers with longer credit histories have lower repayment risk than those with shorter credit histories. It's a good idea to keep some credit cards you've had for a long time. Closing long standing credit cards may inadvertently affect your score.

Inquiries - 10%
Ensure that you are not applying for credit cards or credit products that you have no intention of using. Having too many credit inquiries (any time you apply for a loan or credit card) can hurt your credit rating as it infers you are a large credit seeker. Your score does not lower with every credit inquiry. How inquiries affect your score will depend on other factors like your payment and credit history.

Credit Mix - 10%
Having various types of credit shows your ability to manage a variety of credit.

A mortgage, secured car loans and unsecured credit are considered good debt, debt that was incurred for something that will increase in value (mortgage for a home) or contribute to your overall financial health (student loan). Bad debt is anything that may lead to an unhealthy financial situation, like payday loans and any form of cash advances.

As I mentioned, the cost of bad credit can be significant. Take for example: you're applying for a mortgage and your FICO score is less than 600 then there is a chance you will not be approved for credit from an A lender (major lenders, like banks). You will then have to consider making you application with what is known as an alternative lender (B lender). The rates are higher (likely 1.5% higher than posted rates) based on the possible credit risk that you have been assessed at. That's thousands of dollars of interest that you would not have to pay if you had a good credit score!

Making sure you have a good credit score is very important, but there are many factors that go into getting you a mortgage.

If you would like more information about how I, as a CENTUM Mortgage Professional, can assist you in ensuring that your best interests are looked after, please do not hesitate to get in touch with me.

Paramjeet Nagi
Licence #: M08007836
Phone: (416) 884-1770
Web: OR





Major Changes To CMHC Rules !!!


Major Changes To CMHC Rules!!!

Finance Minister Jim Flaherty has just announced sweeping changes to Canada Mortgage and Housing Corporation (CMHC)Canada’s national housing agency. CMHC is Canada’s premier provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs, and housing research.

The 3 major changes are as follows;

1) A reduction in MAX amortization for CMHC insured mortgages from 30 yrs back down to 25 yrs.  This is will result in Canadian home buyers paying less in mortgage interest payments over the course paying off your home.  The downfall is that fewer people will qualify for a mortgage as the payments will be higher, and more income will be required to qualify for a mortgage.

2) Homes priced over $1 million are no longer eligible for CMHC insurance.

3) MAX refinance has been reduced from 85% (Loan To Value) LTV to 80% LTV.

Read More ... The Globe and Mail

Paramjeet Nagi, Broker


Bank of Canada maintains overnight rate


Bank of Canada maintains overnight rate


          Bank of Canada announced this morning that they will keep the overnight rate steady at 1%. The overnight rate is what the major banks use to benchmark the Prime rate mortgages, which is currently at 3%. 


The bank did hint, however, that it may resume rate hikes sooner than expected.


For anyone in a variable rate mortgage it means that your interest rate will remain constant for the coming months as the Bank of Canada did not give any indications of increasing the Prime rate. 


Next Meeting: July 17

Prime Rate: 3.00%

To learn more about the dynamics behind this decision, check out the articles below.


Bank of Canada holds rates steady

Globe and Mail - Jeremy Torobin

The Bank of Canada left its main interest rate untouched at 1 per cent Tuesday and again suggested that it will tighten borrowing costs when economic conditions allow such a move, while hinting this is farther off than policy makers were anticipating just six weeks ago. 


Click here to read the full article


Paramjeet Nagi, Broker