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."

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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. jeetnagi.com  or  www.mygtamortgage.com


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: www.mygtamortgage.com
Web: www.pnagi.com

 

 


Time to Renew your Mortgage

 

 

 

Lowest Rates* in Canada
  Term       Our Rate                  Bank Rate Bank Rate
  3 Yr Fixed         2.84%                       4.55% 4.55%
  5 Yr Fixed         3.15%                       5.65% 5.65%
  Variable         2.90%                       3.35% 3.35%
Updated: May 15, 2012
We have the best rates on
a wide range of products.

 

 

Renewal Time?

Is your mortgage coming up for renewal soon? When it comes time to renew, make sure you don't step blindly into another long term contract. Studies have shown that the majority of Canadians simply sign off on the mortgage renewal documents that arrive in the mail and end up staying with their current lender, but this does not always get them the best mortgage rate or the best mortgage product for their needs. Historically the bank posted rate is what you will be offered in a standard renewal. As a CENTUM Mortgage Professional, I can negotiate a better rate for you.

Keep in mind that interest rates are at a historical low, yet rate isn't everything. Having some flexibility in your mortgage at a slightly higher rate could be advantageous in the long run. Studies have shown that many people aren't aware of their mortgage options. Make sure you spend the time to research the right mortgage product, rates, and terms. Here are few common mortgage options for consideration:

Prepayment:

This allows you to pay extra onto your mortgage (on top of your regular payments) without paying a penalty. Prepayment options range from the ability to pay 0 - 30% of the original amount borrowed to allow you to become mortgage free faster. Typical prepayments seemed to be in the 20% per year with some banks offering no restrictions on the dates or amount of these payments and some allowing anniversary payments only and one lump sum.

Portability:

This option allows you to move your mortgage to a new home after you've sold your current one. Depending on the lender and mortgage product, there may be some time restrictions. For example, some lenders allow 90 days to port your mortgage to a new home, however you will have to pay the penalty up front and then get reimbursed. If you don't port within 90 days, the penalty will not be reimbursed as you have broken your mortgage term. Penalties are most often calculated at three month's interest or the Interest Rate Differential, whichever is usually higher.

Mortgage Increase:

If you think you want to plan renovations, purchase a vacation home or help finance your children’s education  then you may want to give some thought to this option. This option allows you to increase the amount of your mortgage. There will be fees for this, such as appraisal ($200 - $400) and legal ($700 -$1000) and you will need to provide income documents and all of the same documents required for a new mortgage application.

Mortgage Transfer:
If your mortgage term is up for renewal and you have no intention of moving from your existing property then this may be an option for you. A mortgage transfer allows you to move your existing mortgage to a new lender. There are minimal costs involved to the consumer as lenders primarily will absorb the cost to process a mortgage transfer. You will still need to provide all of the documents required for a mortgage application and there may be a appraisal cost but there should be little or no legal costs involved of which range from $700-$1000 normally.

Mortgage flexibility isn't for everyone. You'll have to consider what is happening in your life and whether or not any of these options are right for you. This is where I can help research different mortgage products offered by various lenders to ensure that you are getting the best rate and product possible. Having a qualified CENTUM Mortgage Professional working for you doesn’t cost you anything, but the advantages can save you thousands of dollars over the life of your 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:www.mygtamortgage.com