[Source - CEP News]
Ottawa - Canadians are increasingly opting for variable rate mortgages when it comes time to buy or refinance a home, according to survey results released by the Canadian Association of Accredited Mortgage Professionals (CAAMP).
The market share of variable and adjustable rate mortgages has almost doubled, to 40% this fall from 21% of those who negotiated their mortgages a year or more ago, CAAMP reports. The association says the switch likely indicates that consumers believe interest rates are more likely to fall than to rise.
There was evidence of a declining mortgage rate trend beginning on Wednesday afternoon as at least two major Canadian financial institutions announced rate reductions.
The lower rates are welcome news, said CAAMP CEO Jim Murphy, although he said the cost of borrowing is only one of three key factors affecting the housing market. Affordability and job security are equally important, he said. "You can't pay a mortgage if you don't have a job.
"Variable rate mortgages are more popular among middle aged and older buyers than among Canadians aged 18-34, the CAAMP study showed. Only 19% of buyers 34 and under opted for variable rate loans compared with 30% of buyers aged 35-54 and 27% of those aged 55 and older.
Read Full Article Here: http://www.economicnews.ca/cepnews/wire/article/single/173905/
Thursday, November 27, 2008
Lower Mortgage Rates
As expected other banks have now lowered their rates, those lowering rates included Royal Bank of Canada, Bank of Montreal, Desjardins Group, Bank of Nova Scotia, Toronto-Dominion Bank and Laurentian Bank of Canada. Others are sure to follow.
These moves should help restore some consumer confidence.
This latest rate reduction is a reaction to the drop in borrowing costs in the bond market.
These moves should help restore some consumer confidence.
This latest rate reduction is a reaction to the drop in borrowing costs in the bond market.
Wednesday, November 26, 2008
Is there any way to make the mortgage debt on a home more tax-efficient?
I recently sat down with Troy Matty of Absolute Financial Group to discuss investments, life insurance and mortgage debt. Troy is a financial expert and has a wealth of information on many investment strategies.
Highlights from the interview:
OMI: Is there any way to make the mortgage debt on a home more tax-efficient?
TM: That is a great question because the total accumulated interest charges on a mortgage debt, on average, is roughly equal to the original starting balance of a mortgage! This is a large sum of money we’re talking about! The answer is yes, you can make a mortgage debt more tax-efficient, but it is strongly recommended you work with an advisor who understands this type of strategy, and also an accountant that does as well. This strategy was specifically designed to make a mortgage debt more tax-efficient, pay off the mortgage debt sooner, and also create an additional pension along the way.
OMI: With the markets in turmoil, and investment portfolios decreasing, what advice can you offer investors?
TM: When it comes to investments, the biggest considerations are the risk tolerance and objectives of the individual, as well as the time horizon that they have. Although one person may see the markets as catastrophic, another may see them as an opportunity. Because investments are sold in units, in a “bull” market the purchasing power of your dollar is minimized, whereas in a “bear” market, your dollar can go a much longer way... and that’s exactly where we are today. It is strongly recommended before you purchase any investments, that they are in line with your risk tolerance and also your investment objectives. Conversely, it is equally recommended that before you sell any of your investments, you are aware of the possible repercussions of doing so. If time is on your side and you don’t need to draw off any of your investments, surrendering them or cashing out may be the worst thing you could do. Consult with an advisor and/or get a second opinion, always!
For expert financial advice please contact Troy Matty, he can be reached at:
Troy Matty
Absolute Financial Group
416.717.5629
tmatty@absolutefinancial.ca
For expert mortgage advice please contact Greg Barrow:
416.807.7123
gbarrow@dominionlending.ca
Highlights from the interview:
OMI: Is there any way to make the mortgage debt on a home more tax-efficient?
TM: That is a great question because the total accumulated interest charges on a mortgage debt, on average, is roughly equal to the original starting balance of a mortgage! This is a large sum of money we’re talking about! The answer is yes, you can make a mortgage debt more tax-efficient, but it is strongly recommended you work with an advisor who understands this type of strategy, and also an accountant that does as well. This strategy was specifically designed to make a mortgage debt more tax-efficient, pay off the mortgage debt sooner, and also create an additional pension along the way.
OMI: With the markets in turmoil, and investment portfolios decreasing, what advice can you offer investors?
TM: When it comes to investments, the biggest considerations are the risk tolerance and objectives of the individual, as well as the time horizon that they have. Although one person may see the markets as catastrophic, another may see them as an opportunity. Because investments are sold in units, in a “bull” market the purchasing power of your dollar is minimized, whereas in a “bear” market, your dollar can go a much longer way... and that’s exactly where we are today. It is strongly recommended before you purchase any investments, that they are in line with your risk tolerance and also your investment objectives. Conversely, it is equally recommended that before you sell any of your investments, you are aware of the possible repercussions of doing so. If time is on your side and you don’t need to draw off any of your investments, surrendering them or cashing out may be the worst thing you could do. Consult with an advisor and/or get a second opinion, always!
For expert financial advice please contact Troy Matty, he can be reached at:
Troy Matty
Absolute Financial Group
416.717.5629
tmatty@absolutefinancial.ca
For expert mortgage advice please contact Greg Barrow:
416.807.7123
gbarrow@dominionlending.ca
Take an interest in bonds to understand mortgage rates
[Source - Fred Langan, Financial Post]
Mortgages are the biggest loan in just about everyone's life. And they can be the hardest to understand.
Why do mortgage rates move the way they do? Why don't the rates march in lock step with other interest rates?
When the Bank of Canada lowers interest rates the big banks usually play chicken for several hours waiting to see who will drop rates first. At the last cut, the TD Bank was the first to lower prime. The others followed within the hour.
If you had a variable rate mortgage tied to prime, then your mortgage rate moved lower. But all other mortgage rates stayed put.
Why? One pat answer is mortgage rates don't move with prime because mortgages are financed in the bond market.
Not true. Interest rates in the bond market influence mortgage rates, but that isn't where the money for mortgages comes from.
Banks get their mortgage money the same way they get other money: they take in deposits from bank accounts, GICs, etc., and then loan out the money at a higher rate. The difference, or the spread, is how commercial banks make most of their money.
Read Full Article Here: http://www.financialpost.com/money/story.html?id=983179
Mortgages are the biggest loan in just about everyone's life. And they can be the hardest to understand.
Why do mortgage rates move the way they do? Why don't the rates march in lock step with other interest rates?
When the Bank of Canada lowers interest rates the big banks usually play chicken for several hours waiting to see who will drop rates first. At the last cut, the TD Bank was the first to lower prime. The others followed within the hour.
If you had a variable rate mortgage tied to prime, then your mortgage rate moved lower. But all other mortgage rates stayed put.
Why? One pat answer is mortgage rates don't move with prime because mortgages are financed in the bond market.
Not true. Interest rates in the bond market influence mortgage rates, but that isn't where the money for mortgages comes from.
Banks get their mortgage money the same way they get other money: they take in deposits from bank accounts, GICs, etc., and then loan out the money at a higher rate. The difference, or the spread, is how commercial banks make most of their money.
Read Full Article Here: http://www.financialpost.com/money/story.html?id=983179
RBC lowers mortgage rates
RBC Royal Bank today announced that it is decreasing its residential mortgage rates effective November 26, 2008 and is introducing three new mortgage rate offers.
The rate has decreased a 1/4 point from 7.20% to 6.95%. It is expected the other major banks will also lower there rates. This is great news for people shopping for new homes.
[http://www.newswire.ca/en/releases/archive/November2008/26/c4332.html]
The rate has decreased a 1/4 point from 7.20% to 6.95%. It is expected the other major banks will also lower there rates. This is great news for people shopping for new homes.
[http://www.newswire.ca/en/releases/archive/November2008/26/c4332.html]
Wednesday, November 19, 2008
Realtor.ca
How many times have you visited http://www.mls.ca/?
When was the last time you visited?
It is now www.realtor.ca and after its initial relaunch a few weeks ago they have received over 16,000 emails from unhappy house hunters trying to figure out the new system.
A recent article in the Toronto Star explains:
[Source - Murray Whyte Toronto Star]
Messing with our real estate crack
When wildly popular property site MLS.ca was relaunched last month, no one could have anticipated the furious response. Some of the protesters are even looking for a house.
Her name is Briana, and she's an addict, a point she freely admits – promotes, even – online. Her addiction, though, isn't one likely to cause the typical ills associated with junkiedom – the dissolution of relationships, loss of career, or even physical harm (though her mouse-click finger gets a little stiff sometimes).
Online, Briana (her last name is Tomkinson) sporadically maintains a blog called MLS Addict, broadcasting her affliction: a devotion beyond reason to MLS.ca, the web site maintained by the Canadian Real Estate Association which lists properties for sale nationwide (MLS stands for Multiple Listing Service).
According to Comscore, which tracks web traffic, MLS.ca garners 3 million unique hits every month. When the site relaunched last month with a confusing array of new features, the response revealed what Tomkinson always knew: Her kind are legion.
Read Full Article Here: http://www.thestar.com/News/article/537393
When was the last time you visited?
It is now www.realtor.ca and after its initial relaunch a few weeks ago they have received over 16,000 emails from unhappy house hunters trying to figure out the new system.
A recent article in the Toronto Star explains:
[Source - Murray Whyte Toronto Star]
Messing with our real estate crack
When wildly popular property site MLS.ca was relaunched last month, no one could have anticipated the furious response. Some of the protesters are even looking for a house.
Her name is Briana, and she's an addict, a point she freely admits – promotes, even – online. Her addiction, though, isn't one likely to cause the typical ills associated with junkiedom – the dissolution of relationships, loss of career, or even physical harm (though her mouse-click finger gets a little stiff sometimes).
Online, Briana (her last name is Tomkinson) sporadically maintains a blog called MLS Addict, broadcasting her affliction: a devotion beyond reason to MLS.ca, the web site maintained by the Canadian Real Estate Association which lists properties for sale nationwide (MLS stands for Multiple Listing Service).
According to Comscore, which tracks web traffic, MLS.ca garners 3 million unique hits every month. When the site relaunched last month with a confusing array of new features, the response revealed what Tomkinson always knew: Her kind are legion.
Read Full Article Here: http://www.thestar.com/News/article/537393
Think your borrowing costs are cast in stone? Maybe it's time to ask
The following article in yesterdays Globe and Mail is a great article on the recent changes to the Manulife All-in-One product which has most of their clients seeing red. This product which is sold through financial advisers (not available through mortgage brokers) was sold by the financial advisers as a "prime rate" product and that the rate would never change. This selling feature written in the content of product details on the Manulife website has since been removed from the Manulife website.
[Source - ROB CARRICK - globeandmail.com 18/11/08]
When you deal with companies in the financial sector, you run the risk that their pain will turn out to be your pain.
This is what's happened recently to clients of Manulife Financial, Canada's biggest insurance company, and Envision Financial, a large credit union in British Columbia. Affected in various ways by the global financial crisis, both have made changes that resulted in higher borrowing costs for some clients.
In the past few years or so, virtually all financial institutions have bumped up the cost of mortgages and lines of credit. But Manulife and Envision differ in that it's not just new clients who will pay more. Existing clients who may have thought they had a particular arrangement in place are now paying more as well.
Before the financial crisis, you could get away with signing up for a mortgage or line of credit without asking about your lender's ability to change the rules determining your interest rate. Now, it's clear that you have to ask, or risk a surprise increase later on.
Read Full Article Here: http://www.theglobeandmail.com/servlet/story/LAC.20081118.RCARRICK18/TPStory/Business
Similar All-in-One products are offered by mortgage brokers through other lenders. Be sure to speak with a professional mortgage agent and get all the details on these types of products before going into them.
[Source - ROB CARRICK - globeandmail.com 18/11/08]
When you deal with companies in the financial sector, you run the risk that their pain will turn out to be your pain.
This is what's happened recently to clients of Manulife Financial, Canada's biggest insurance company, and Envision Financial, a large credit union in British Columbia. Affected in various ways by the global financial crisis, both have made changes that resulted in higher borrowing costs for some clients.
In the past few years or so, virtually all financial institutions have bumped up the cost of mortgages and lines of credit. But Manulife and Envision differ in that it's not just new clients who will pay more. Existing clients who may have thought they had a particular arrangement in place are now paying more as well.
Before the financial crisis, you could get away with signing up for a mortgage or line of credit without asking about your lender's ability to change the rules determining your interest rate. Now, it's clear that you have to ask, or risk a surprise increase later on.
Read Full Article Here: http://www.theglobeandmail.com/servlet/story/LAC.20081118.RCARRICK18/TPStory/Business
Similar All-in-One products are offered by mortgage brokers through other lenders. Be sure to speak with a professional mortgage agent and get all the details on these types of products before going into them.
Subscribe to:
Posts (Atom)