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Wed, Mar 14th, 2012, 01:12 PM #1
RBC fixed income strategist Ian Pollick speculates that 5 year yields could pop 20 basis points higher “during March and April.”
Fixed mortgage rates are based, in large part, on bond yields. Canadian bond yields are, to some degree, influenced by mortgage volumes. As spring homebuying fever livens up, demand for mortgage funds often forces yields higher.
These are predictor stats only, so that doesn’t mean the same will happen this time around, but it is certainly true historically speaking.
Barring any international economic crisis though, rates are very likely to riseanytime in March, April and May.
So, what to do??
If you are looking to refinance or buy in these months, get a rate hold in place . . just in case. A broker can do this for you and it's free. Why risk it? . . .This thread is currently associated with: Spring ShoesLast edited by MortgageQueen; Wed, Mar 14th, 2012 at 02:14 PM.
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Wed, Mar 14th, 2012, 02:56 PM #2
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thanks for the heads up. we'll be calling around any day now for our renewal. one company we are planning to deal with has 120 day rate guarantee....just long enough for us :D
nothingfancy
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Wed, Mar 14th, 2012, 03:02 PM #3
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Ing Direct has a 7 yr mtg for 3.99 with a 120 day rate guarantee if anyone is interested.
They don't have the usual restrictions like some of the BMO 5 yr special low rate mtg has.
With ING you can do a 25/25 pre payment without any penalty and also chose an amortization term you want, doesn't hav to be 25 yrs.
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Wed, Mar 14th, 2012, 03:19 PM #4
Just keep in mind ING has followed the lead of most of the Big Banks and now uses collateral charge on mortgages which makes it a min. of $500 EXTRA to switch to any other Lender in the future.
As far as the 3.99 for 7 years (which is a nice rate) you might as well go for 3.89 for 10 years. . .
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Wed, Mar 14th, 2012, 03:22 PM #5
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Tue, Mar 20th, 2012, 10:42 AM #6
ING just pulled their equity based mortgage off the shelf. They are becoming more and more a copy of the other "Big Banks".
Banks are tightening up all their "qualifications" for equity only based mortgages, and self employed.
FYI.
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Tue, Mar 20th, 2012, 04:31 PM #7
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Yes, with the increase in inflation, Bond market is gradually falling apart. Bond holders (bond investors) have started to realize that the negligible interest they receive on their bond investments is a lot less than inflation.
This reality is reflection in the increase the Bond interest rates....... & this will lead to higher rates on the fixed mortgages. However, on the variable rate, the spread will increase (means the Prime -0.75 is coming very soon)..
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Fri, Mar 23rd, 2012, 06:53 PM #8
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The days of super-low mortgage rates that made home ownership dreams a reality of many Canadians may be numbered, says the Bank of Montreal.
The bank's advice? Say goodbye to variable mortgages and lock in longer-term fixed rates while the going is still good. Its a warning bell; be cautious & be careful..
http://ca.news.yahoo.com/time-lock-m...142437232.html
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Fri, Mar 23rd, 2012, 09:48 PM #9
I was 1 week off on my estimate. . .sorry about that. So next Thursday is the planned day for withdrawal of special rates and probably rate hikes
In regards to BMO's comments, that needs to be taken with a grain of salt. First of all, it's a scare tactic to sign up for their "super restrictive" 5 yr fixed rate mortgage (which I would recommend to almost nobody) Secondly, variable isn't moving for awhile and almost every variable mortgage out there gives the option to switch over to fixed when/if desired.
EVERYONE has unique circumstances and should take their "whole" financial status, both present and future, into consideration when choosing the best mortgage for YOU.
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Tue, Mar 27th, 2012, 01:02 PM #10
**UPDATE**on post above
RBC is raising three core rates, including its:
- Posted 5-year fixed
which rises 20 bps to 5.44% - Posted variable
which rises 10 bps to prime + 0.20% - 4-year fixed special
which rises 50 bps to 3.49%
Don't panic yet. There will still be a few Lenders out there offering lower rates. I'm still offering 5 yr. fixed of 3.14 as I'm sure other brokers are.
- Posted 5-year fixed
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Tue, Apr 3rd, 2012, 02:18 AM #11
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I have a mortgage that was set up by a broker with First National 4 years ago this June. It is a variable rate mortgage, 5 yr deal with 20 year amitorization. It sits at prime less .6%. I don't think I can lock in a lower rate, but maybe I'm wrong? I'm sitting at 2.4% & have been there since Oct of last year, never having been above 3%. It went as low as 1.9% over the last 3 1/2 years, so locking in at 3% plus doesn't make sense to me right now....am I thinking right?
In the meantime found this interesting table on my google search for more info.
Bank of Canada Interest Rate Announcement Schedule 2012
The Bank of Canada key interest rate announcement schedule for 2012 is:
17 January
8 March
17 April
5 June
17 July
5 September
23 October
4 December
The Bank of Canada has kept its main interest rate at 1.00% according to the statement released this morning. According to the statement, “Recent developments suggest that the outlook for the Canadian economy is marginally improved”. However there are indications that an interest rate hike could come as soon as October this year.
Now may be a good time to consider locking in low mortgage rates as they are bound to rise by the end of this year. The prime rate has not stayed this low for decades.Last edited by lucy16076; Tue, Apr 3rd, 2012 at 02:22 AM. Reason: add info
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Tue, Apr 3rd, 2012, 07:45 AM #12
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Bank of Canada also came with a negative outlook for Canada's long term future, though short term it's better (only long term is a problem).
They can't increase the rate, cause any increase which is not coordinated with the USFed will drive the bond market & shoot the Canadian dollar to a lot higher level above Parity to USD. This will again dampen the economic outlook/future of Canada.
So Bank of Canada is stuck in a low interest rate environment for a very long long time.
By later part of this year, we expect Japan to be the center of the problem, & Europe is still not resolved. All these just guarantees lower interest rate for extended period of time
Bank of Canada, says Canada needs to look towards east for growth, thats the only part of the world where real growth is happening (rest all places growth is happening due to loan growth & money printing; not real growth). And Canada is yet to realize this potential, http://ca.finance.yahoo.com/news/eco...211853908.htmlLast edited by ashedfc; Tue, Apr 3rd, 2012 at 10:01 AM.
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Tue, Apr 3rd, 2012, 11:14 AM #13
You are absolutely right. You have a good rate. Leave it be. I'm not sure who the author of that article is (that you quoted from) but there is a lot of fear-mongering out there. . .mostly produced by big banks.
If you like, contact me in the late Fall, and we can review your situation. I say that, because I can't truly predict what will happen past that point. All evidence points to no change to Prime rate (not to be confused with bank rates!) If you have a good variable rate, stick with it for now.
For those with fixed rates, it may be a different ball game. Rates just jumped last week. Big banks are wearying of their "low profit margin" (everybody get your violins out)
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Tue, Apr 3rd, 2012, 11:53 AM #14
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True,
They were just bailed out; their existence is based on the bailout. Most of them would have gone bankrupt without the bailout.
And now they are already crying about lower profits (its the same formula: Profits are their's & Losses are for the Govt. & taxpayers & general public).
By that excuse, they have already increases the fees/services charges for all banking products, & now they are coming after other bank items where consumers will have to cough up a higher fee..
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