Tag Archives: Mortgage rates

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

May 29, 2019Active Life, Condo Life, Financial, Financial, Financial, Homes MagazineAmazon Canada, Bangkok, Bank of Canada, buying a home, economy, housing market, interest rates, Mortgage, Mortgage rates, negotiate, rate announcement, RateHub, securing a mortgageWayne Karl

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

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.

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.

ALSO READ: Ontario releases plan to address housing affordability and supply issues

ALSO READ: Variable vs fixed mortgages? It’s complicated

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.”

Breakthrough research

“We are extraordinarily grateful to Peter Gilgan and the Peter Gilgan Foundation for their ongoing philanthropic leadership and dedication to SickKids,” says Dr. Ronald Cohn, president and CEO of SickKids. “Our vision for the children’s hospital of the future includes the construction of a state-of-the-art building, matching our world-class care with family-friendly spaces for patients and their loved ones. This gift is unparalleled and will help ensure our vision becomes reality. In conjunction with a commitment from the government of Ontario, and support from other donors, this gift will help SickKids continue to advance children’s health through exemplary clinical care, breakthrough research, and teaching excellence both at home and around the world.”

“To continue to have the opportunity to support SickKids is an honour and is also very humbling,” says Gilgan. “I’m in a privileged position to be able to make this gift, and I know it’s going to be used to help children, today and in the future, live longer and healthier lives.” The commitment from the Peter Gilgan Foundation to ensuring the SickKids campus is a cutting-edge world leader began in 2012 with a transformational gift of $40 million to support the construction of the SickKids Centre for Research and Learning. The Peter Gilgan Centre for Research and Learning brings together 2,000 research staff – who previously worked in six different buildings – under one roof to enhance interactions between clinical and research colleagues. The integration of research with patient care and learning are among the strengths of SickKids. This most recent donation brings the cumulative giving from the Peter Gilgan Foundation to SickKids to more than $140 million.

Peter Gilgan Family Patient Care Tower

SickKids will break ground in October 2019 on the first of two buildings. The first building, the Patient Support Centre, will house the SickKids Learning Institute with 1,200 world-class trainees, a Simulation Centre for hands-on teaching, and provide 6,000 professionals, management and support staff with up-to-date spaces to do their best work. The second building, the Peter Gilgan Family Patient Care Tower, will house critical care and inpatient units. It will reflect the very latest in medical design: Private one-family rooms, dedicated mental-health beds, a state-of-the-art blood and marrow/cellular transplant therapy unit, specialty operating theatres, advanced diagnostic imaging facilities, and a vastly expanded emergency department.

Fixed mortgage interest rates fall, but future hikes likely

January 22, 2019Homes Magazine, Industry NewsBank of Canada, Canada, Canadian Interest Rates, fixed rate mortgage, fixed rates, interest rates, Mortgage, Mortgage rates, RBC, Wayne KarlWayne Karl

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Fixed mortgage interest rates fall, but future hikes likely

Well, that didn’t take long. We reported on Jan. 9 that mortgage interest rates might actually take a dip in the coming weeks.

“The (Bank of Canada’s) moderated outlook in the last two announcements has caused bond yields in Canada to drop lower than any point in 2018,” James Laird, co-founder of Ratehub Inc. and President of CanWise Financial mortgage brokerage, told HOMES Publishing. “However, we are yet to see a corresponding decrease in mortgage rates. We would advise consumers to keep a close eye on mortgage rates in coming weeks.”

RBC first to lower rates

And sure enough, a week or so later, RBC has done just that – lowering its posted five-year fixed rate to 3.74 per cent from 3.89 per cent. It was the first time RBC has lowered this rate since October 2017.

“RBC is the largest mortgage lender in Canada, so whenever they move their mortgage rates, we can expect that the other four banks will follow suit. We anticipate that the other big banks will soon have a publicly posted rate of 3.74 per cent as well.”

Experts have expected this move from lenders since bond yields dropped in December 2018, Laird says, after the BoC announcement stating that future rate hikes would be slower and less frequent. The most recent Bank on Jan. 9 announcement highlighted policymakers’ concerns with Canada’s energy and housing markets, which suggested that rates will be stable for a longer period of time than had previously been anticipated.

Deep discounts

The Bank of Canada held its target for the overnight rate at 1.75 per cent on Jan. 9, where it has been since October 2018, and is lowering its growth forecast this year for Canada and around the world.

Canadians who need a mortgage this year should frequently check rates and mortgage providers. As the spring homebuying market approaches, says Laird, many lenders will offer deep discounts and promotions in order to attract new customers.

“Anyone looking for a variable rate should act quickly, because the current stable interest rate environment is causing lenders to reduce the discounts being offered on variable rate mortgages,” he says.

Let’s explore a couple different scenarios.

Scenario 1: $400,000 mortgage

According to Ratehub.ca’s mortgage payment calculator, a homeowner with a $400,000 mortgage and five-year fixed rate of 3.89 per cent will have monthly mortgage payments of $2,080.

Comparatively, a homeowner with a five-year fixed rate of 3.74 per cent would have monthly mortgage payments of $2,048.

A 0.15-per-cent difference in their mortgage rate would lower mortgage payments by $32 per month, or $384 per year.

Scenario 2: $800,000 mortgage

A homeowner with an $800,000 mortgage and five-year fixed rate of 3.89 per cent will have monthly mortgage payments of $4,161.

Comparatively, a homeowner with a five-year fixed rate of 3.74 per cent would have monthly mortgage payments of $4,096.

A 0.15-per-cent difference in their mortgage rate would lower mortgage payments by $65 per month, or $780 per year.

Hikes likely to come

Personal finance guru and Homes Publishing columnist Rubina Ahmed-Haq says the Bank remains optimistic about Canada’s economy, noting it has performing well overall. In its statement, the Bank says, “Growth has been running close to potential, employment growth has been strong and unemployment is at a 40-year low.” But still not enough to raise rates at this time.

Still, consumers can expect rates to begin to inch higher in the coming months, she says. Forecasters are predicting two hikes this year, down from earlier predictions of as many as three increases in 2019.

Breakthrough research

Peter Gilgan Family Patient Care Tower

Bank of Canada holds interest rate for now, but hikes still to come

January 9, 2019Condo Life, Featured, Homes Magazine, Industry News, Industry NewsBank of Canada, Canada, economy, fixed rates, GDP, homebuyers, interest rates, James Laird, Mortgage rates, overnight rate, rate announcement, rate hub.ca, RateHub, RUBINA AHMED-HAQ, Wayne KarlWayne Karl

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Bank of Canada holds interest rate for now, but hikes still to come

After raising the rate three times last year, some experts expected the Bank would do so again, either in late 2018 or early this year.

So, what does this latest non-action mean, and what can Canadian consumers expect in the coming months?

“The Bank gave several reasons for its decision to keep rates steady,” says Rubina Ahmed-Haq, personal finance guru and Homes Publishing columnist. “This includes lower oil prices, a weaker outlook for the global economy and Canada’s economy slowing more than expected.

Weaker investment

“It was a surprise that market pessimism did not come up,” she adds. “Despite stock market volatility making headlines for the last two months, there was no mention of the wild swings investors have been experiencing. The Bank did talk about weaker consumer spending and housing investment. This could be because of Canadian investors watching their portfolios and not feeling as confident in their spending.”

Sill, Ahmed-Haq says, the Bank remains very rosy on Canada’s economy, noting it has performing well overall. In its statement, the Bank says, “Growth has been running close to potential, employment growth has been strong and unemployment is at a 40-year low.” But still not enough to raise rates at this time.

Energy sector a concern

“The energy sector has been a concern for the Bank for some time now, but there seems to be a new focus on the housing sector, especially on the impact of mortgage guidelines changes and the five rate increases that have happened in the past 18 months,” James Laird, co-founder of Ratehub Inc. and President of CanWise Financial mortgage brokerage, told Homes Publishing.

Ahmed-Haq and Laird agree we should still expect higher rates in the coming months.

“The policy interest rate will need to rise over time into a neutral range to achieve the inflation target,” says Ahmed-Haq.

Rate hikes to come

Forecasters are now predicting two rate hikes this year, down from earlier predictions of as many as three rates hikes in 2019.

“The Bank’s moderated outlook in the last two announcements has caused bond yields in Canada to drop lower than any point in 2018,” says Laird. “However, we are yet to see a corresponding decrease in mortgage rates. We would advise consumers to keep a close eye on mortgage rates in coming weeks.”

Highlights from the Bank’s announcement

Bank of Canada maintains target for overnight rate at 1.75 per cent
Canadian economy performing well overall
Employment growth strong
Unemployment rate at 40-year low
Canadian consumption spending and housing investment weaker than expected
Housing markets adjusting to municipal and provincial measures, new mortgage guidelines and higher interest rates
Household spending to be dampened by slow growth in oil-producing provinces
Real GDP growth forecast at 1.7 per cent for 2019
Growth of 2.1 per cent forecast for 2020

Breakthrough research

Peter Gilgan Family Patient Care Tower

Interest rate hikes may not cost you as much as you think

October 30, 2018Active Life, Condo Life, Featured, Homes Magazine, Reno & DecorBank of Canada, BMO, Canada Mortgage and Housing Corporation CMHC, Canwise Financial, CIBC, CMHC, fixed rates, homebuyers, interest rates, mortgage holders, Mortgage rates, RateHub, RBC, Scotiabank, TD Canada Trust, variable rates, Wayne KarlWayne Karl

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Interest rate hikes may not cost you as much as you think

By Wayne Karl

When the Bank of Canada announced an interest rate hike on Oct. 24 – and within hours all of Canada’s major banks followed suit in hiking their prime lending rates – consumers largely groaned.

All of CIBC, TD Canada Trust, Scotiabank, RBC Royal Bank and BMO Bank of Montreal almost immediately issued virtually the same statement, word for word: “(Insert bank name here) announced that it has increased its prime lending rate by 25 basis points from 3.70 per cent to 3.95 per cent, effective Oct. 25, 2018.”

Yes, the numbers, too, are identical.

BoC had already raised its influential overnight rate target three times since July 2017, to 1.5 per cent from 0.75 per cent, and now this most recent hike to 1.75 per cent, while hinting that further increases are likely.

For mortgage holders, though, the increases may not cost you as much as you fear.

Fixed rates

The majority of Canadian mortgage holders are on fixed-rate products, which is why a more moderate pace of rate increases likely won’t impact the market significantly, according to Canada Mortgage and Housing Corp. (CMHC).

Nearly half of existing mortgages in Canada will come up for renewal in 2018, according to a data release from CIBC Capital Markets. However, despite having to renew their mortgage in a rising interest rate environment, a borrower with a five-year mortgage rate may be able to get a better deal on their mortgage renewal today than when they entered the housing market five years ago.

According to calculations from mortgage rate comparison website Ratehub.ca:

The best five-year fixed rate in September 2013 was 3.29 per cent. With that rate, a borrower with a $400,000 mortgage amortized over 25 years would have had a monthly mortgage payment of $1,953 over the last five years.

If that same borrower renewed their mortgage at today’s best five-year fixed rate of 3.19 per cent, their monthly mortgage payment would decrease by $17 per month to $1,936.

“Canadians who require a new mortgage in coming months should lock in a fixed rate as soon as possible,” says James Laird, co-founder of Ratehub Inc. and president of CanWise Financial. “This includes those who are purchasing a home, and homeowners whose mortgage is coming up for renewal.

“Remember that, on average, mortgage providers will offer their existing customers a discount of 0.25 per cent off their posted rate on a renewal. However, there may be more competitive rates out there. Be sure to shop around online or use a mortgage broker to negotiate the best rate for your renewal.”

Laird says borrowers should begin shopping around 120 days in advance of their renewal date in order to negotiate a competitive mortgage rate.

A rising interest rate environment could put downward pressure on home prices, he says, but upward pressure will come from predicted economic growth, lack of housing supply, immigration and first-time homebuyers.

Variable rates

“Borrowers should expect variable rates to perfectly correlate with Bank of Canada rate increases,” Laird says. “Variable rate mortgage holders should also be prepared for several increases to their interest rate in coming months and, with general interest rates in Canada on the rise, fixed rates will rise as well. However, those currently in fixed rates have nothing to worry about until their next mortgage renewal date.”

Grilling galore

Now what dad doesn't like to grill? A great gift is the gift of grilling! I found these amazing grilling accessories at Lowe's and RONA from Broil King and I know they are going to delight any dad on your list! These tongs, chicken roaster pan, spice rubs and mini thermometers make the perfect grilling gift this year!

Wine-not?

I love to bring a good quality wine to family gatherings, and Father's Day is no exception. I recently discovered Jackson Family Wines, based in California and specializing in producing quality wines from family-owned vineyards. For a gathering such as Father's Day, I like to go with either an essential, like Kendall-Jackson Vintner's Reserve Cabernet Sauvignon , which pairs perfectly with meats on the grill, or for hotter days, I like to pull out their La Crema Sonoma Coast Chardonnay, which is perfect when chilled.

Moments that matter

I am a total daddy's girl, so when I have the opportunity, I just love to give my dad something meaningful and special. FUJIFILM Printlife has an entire line of high-quality photo-finishing products to customize and preserve your favourite memories – and my dad and I have a lot! A great idea is to compile all your favourite "dad and me" photos and print them into a photobook or print your favourite memory on a canvas or on a mug for your dad to enjoy!

Only the eScentials

I am a huge fan of plant-based products that work. A great gift for Dad is an eScential Wellness' bundle of products that are perfect for any gardeners out there. They have a Gardener's Hand Salve that is made with shea butter, and a blend of essential oils and is 100 per cent organic. I love, love, love that these products are toxin- and cruelty-free. Bundle it with a few gardening tools and you have the perfect gift for the dad who likes to putter in the yard.

Tech talk

Style meets sporty in Samsung's latest smartwatch innovation, the Galaxy Watch Active, bringing dads who want to live actively a device that is as smart as it is stylish. Pair it with your favourite Android or iOS smartphone so dad can manually engage in more than 39 activities, set daily goals and monitor his progress with real-time coaching, indoor/outdoor activity tracking and popular third-party apps, complete with a light and versatile design.

Decor for dad

For those dads with a man cave, add some fun masculinity with a camo or 4/20 pillow, which will surely be a great conversation starter for his friends. Even if he is messy, the handcrafted Canadian-made pillow is fully washable (no need to remove a cover) and is also hypoallergenic and has dust mite control. Fun and function come together!

Jo Alcorn is founder and design specialist at Alcorn Home. alcornhome.com

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If you're looking to replace a rickety, weathered, old deck this summer, here are five things to consider so that your new one lasts a lifetime.

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

Mortgage seasonality

Spring promotions

Bank results

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Maroon Decor

Fixed mortgage interest rates fall, but future hikes likely

RBC first to lower rates

Deep discounts

Scenario 1: $400,000 mortgage

Scenario 2: $800,000 mortgage

Hikes likely to come

RELATED READING

GTA new home sales continue stronger upward trend in April

Federal government releases details on homebuyer incentive programs unveiled in Budget 2019

Georgian International offers remarkable communities in Barrie-Collingwood-Orillia area

TCS Marketing Systems

Indigo launches Indigobaby Registry with top baby brands and must-haves for parents

Homeowners' Choice Award winners

Peter Gilgan Foundation donates $100 million – largest single gift ever to SickKids Hospital

Breakthrough research

Peter Gilgan Family Patient Care Tower

RELATED READING

Losani Homes announced their final release of freehold towns and singles at Vista Ridge

Planning a renovation?

HanStone Quartz

JELD-WEN Windows & Doors

Caesarstone Canada

Fusion Stone

HomeStars

VELUX Canada Inc.

Saunacore

Enbridge Gas Distribution Inc.

Men At Work Design Build Ltd.

Amati Canada

X-Tile Canada