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Securing a mortgage

Looking to secure a mortgage? Now is the best time to negotiate

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Looking to secure a mortgage? Now is the best time to negotiate

 

Securing a mortgage

The Bank of Canada again held its influential overnight lending rate today at 1.75 per cent, signalling the continuation of a stable interest rate environment – and underlining that now may be the best time to negotiate a mortgage.

Why? We’ll get to that in a second.

First, the BoC held the rate for the fifth straight announcement – it’s been at 1.75 since October 2018 – citing growing evidence that the Canadian economic slowdown in late 2018 and early 2019 is now being followed by a pickup in the second quarter this year. Housing market indicators point to a more stable national market, albeit with continued weakness in some regions.

In addition, the Bank says, continued strong job growth suggests that businesses see the weakness in the past two quarters as temporary, with recent data supporting an increase in both consumer spending and exports in the second quarter, and it appears that overall growth in business investment has firmed.

“The Bank’s language indicates that things will need to change to the positive or negative in order to move from their current rate strategy,” says James Laird, co-founder of Ratehub Inc. and president of CanWise Financial. “Therefore, Canadians can expect a stable rate environment for the foreseeable future.

“This announcement should bring peace of mind to consumers currently in a variable rate mortgage because it is unlikely that the prime rate will increase anytime soon,” he adds. “Going forward, a decrease seems as likely as an increase, which is also good news if you’re in a variable rate.”

Mortgage seasonality

Canadians may also be able to take advantage of seasonality in the mortgage industry to score the best deal on their lending rate. Just like spring is known as traditionally the busy season in real estate, it’s also a very good time of year to secure a mortgage.

Securing a mortgage to buy a condo in Toronto

Ratehub.ca, for example, analyzed historical rate data from 2016 to 2019 to identify the best times of year for Canadians to lock in to a rate, or refinance an existing mortgage.

According to Ratehub.ca’s historical data on the best five-year fixed and variable rates, Canadians have access to the lowest rates during the spring homebuying season – between April and July – every year. The second most competitive time period for mortgage rates occurs between October and December.

A similar story played out in 2017 when the average best five-year fixed rate fell to 2.4 per cent from 3.32 per cent, and the average variable rate dropped from 2.09 per cent to 2.04 per cent.

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A year later, 2018 proved that while a rising rate environment can override the benefits any spring mortgage deals, mortgage holders still benefited from certain promos. The average best five-year fixed rate increased from 2.94 per cent from January to March to 3.07 per cent, but the average best variable rate fell from 2.17 per cent to 1.96 per cent. Lenders actually slashed fixed rates over that period.

Spring promotions

“Lenders and mortgage providers come out with their strongest promotions during the busy spring and summer homebuying season,” Laird says. “Regardless of the interest rate environment, springtime is when lenders are willing to make the smallest margins in order to win business.”

During this period, many lenders will choose at least one rate and term to price very aggressively in order to attract attention to all of their mortgage products. Lenders also come out with special promotion offers to incentivize borrowers to lock in a rate. Consumers can expect to see cash-back deals to help with closing costs and refinance fees. Some lenders offer extra-long rate holds during this period. For example, BMO is currently offering a 130-day rate hold. The “30-day quick close rate” is another promotion many lenders opt for – this is a discounted rate that applies if your mortgage is closing in the next 30 to 45 days.

It’s crucial that lenders remain competitive through the spring market, Ratehub says, to hit their annual mortgage volume targets. In most cases, lenders will hit their targets during the second quarter (April to June) and, as a result, tend to be less competitive with promotions during the latter half of the year.

Consumers will typically see rates fall again in October, in the lead up to Oct. 31, when all of Canada’s major banks end their fiscal year. Lenders that want to get an early start on their targets for the following year often come out with promotions during this time period.

Bank results

Further benefiting the mortgage landscape for Canadians is that Canada’s big banks this week are reporting lower second quarter profits than expected.

“The poor results reported by Canada’s big banks in Q2 2019 could be good news for mortgage consumers,” Laird told Homes Publishing. “In light of these results, it would be unsurprising if the banks aggressively try to win mortgage business by offering lower rates to consumers or promotions to attract more business in the latter half of 2019.”

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Travel : Thailand

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Travel : Thailand

By Kate Robertson

Enjoy it like a local

With a long-standing tourist industry, Thailand is often described as a magical place to visit. It is the number one destination in southeast Asia, and attracts millions of visitors each year. Combined with a population of more than 68 million, the multitude of people may seem daunting, but there are lots of places you can visit to avoid the crowds.

Buddha and prangs, Ayutthaya

Vibrant Bangkok

Even in the bustling city of Bangkok, consider visiting lesser-known temples, instead of the Grand Palace or Wat Pho (where the 46 metre long reclining Buddha lies) to stave off throngs of tourists. Take a tuk-tuk (three-wheeled motorcycle taxi) to Wat Ratchabophit or Wat Suthat to see impressive gold-leafed Buddhas, magnificent wall murals, pagodas and sweeping ceramic tiled roofs.

Intricate mosaics on temples.

At nearby Talad Trok Mo morning market, mingle with the locals and stroll the narrow alleyways where vendors are set up in front of crumbling shops. Here you can browse the fresh produce, meats and fascinating (often unrecognizable) food items. Take the time to watch flower vendors skillfully weave jasmine into beautiful, aromatic Thai garlands, which are worn on the wrist or hung over the rear view mirror in taxis for good luck. This is a good place to try some traditional street food like pad prik khing (a red curry with meat and long beans), or khanom buang (sweet Thai crepes).

Bangkok’s main river, Chao Phraya, connects with a maze of centuries-old canals. Hop aboard one of the local water taxis (traditional long-tailed boats) for a charming cruise down Bangkok Noi Canal, where you will see traditional stilted shacks mingled with beautiful temples, factories and upscale homes. Ask the driver to stop in front of the temple to feed the catfish, where women sell bags of stale bread (the catfish are protected here). If you’re lucky you’ll spot large monitor lizards sunning themselves on shore.

Natural Chiang Mai

Nestled amidst forested mountains, Thailand’s northern capital has a more rural, laid back feel. There are plenty of temples to see, but it’s also a great place to get in touch with Thailand’s natural side. Within a short jaunt from the city, you’ll experience lush green countryside, rainforest eco-reserves and Patara – an ethical elephant farm and rescue facility. At Patara, you will be assigned your own elephant for the day, and taught how to bathe, feed and ride it, as a keeper would.

Patara Elephant Farm & Sanctuary.

Bordered by Myanmar and Laos, not only is the climate cooler in Chaing Mai, but the food is less spicy on the tongue than in other parts of Thailand. An example of this is their most popular street food khao soi – a Burmese-influenced, rich noodle soup with seasonings and chunks of meat, topped with crispy noodles.

Thai massage is available everywhere and is very affordable. Indulge in a luxurious treatment at CHI – the spa at Shangri-La Hotel. Your masseuse will lead you down small pathways, over bridges and alongside ponds to your own private hut where you will be pampered, starting off with a salt foot scrub in rose-petal water.

Karsts around Krabi.

Krabi Island Hopping

With more than 100 islands nearby, the beach resort town of Krabi, located on the Andaman coastline, is the perfect place for island hopping. Here, the vivid turquoise ocean is dotted with dramatic karsts (limestone formations rising out of the water) and blanketed with emerald green foliage. It’s hard to capture a pictorial reference, even in your imagination.

Floating restaurant, Ban Ko Klang.

A 10-minute boat ride through the mangroves will take you to Ban Ko Klang island, which is a predominately Muslim fishing community. Local initiatives here include the farming of a special sang yod rice (violet/reddish in colour) and batik-making to help to sustain the local economy. Without cars on the island, you’ll have to rely on a tuk-tuk for a tour of the tiny villages, where you’re likely to see water buffalos and goats grazing in expansive fields along the way. Take note of the song birds that hang in cages outside of each home – the more birds, the higher the family status. Before you leave, make sure you enjoy a fresh fish lunch in the peaceful ambiance of one of the rustic floating restaurants.

Ayutthaya

Founded in 1350, Ayutthaya was once the capital of Thailand before it was attacked and burned by the Burmese army in 1767. A guided bicycle tour is a great way to visit the many archaeological ruins of Buddhist monasteries and prangs (reliquary towers), which point to how majestic this city once was. After the ride, reward yourself with a bag of sai mai (threads of sweet, colourful cotton candy), which are sold everywhere on the streets.

Although Thailand is smaller in size than the the province of Alberta, there are so many amazing things to see and do, you’ll be planning your return trip before you even arrive home.

Photography, Kate Robertson

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