CANADIAN MORTGAGE VIEWS

Is It Time To Refinance? When people take on a mortgage the majority opt for a 5 year one usually because they intend to stay in the residence and they know their payments for the next 5 years. However life sometimes throws a curveball at us and we have to make hard financial decisions. Perhaps an illness occurred or 1 person was laid off or a divorce occurs and suddenly you can't pay for anything in cash anymore and resort to using credit cards. As we well know credit cards companies love this because the amount of interest you are paying increases. Perhaps you took a 5 year mortgage out several years ago You now look at how you can lower your payments and because mortgage rates are at a historical low these days it makes sense to look at breaking your mortgage and taking on a new one at a lower rate.  Paying off credit cards at 20% + interest looks attractive when you can get a new mortgage under 4% these days. Before you do anything you need to know what it will cost to b

As the deadline for banks to disclose their penalty calculations draws closer, this topic of penalties will be more prevalent. As clients become more aware, will it be a new area of competition forcing lenders to change standard charge terms and all play on the same level field? Breaking your mortgage: Understanding the rules You can pay a high price to refinance a mortgage before maturity. Lenders will soon have to give more information on what to expect. By Ellen Roseman Mortgage rates are falling. You want to break your closed mortgage and get a new five-year loan at 2.99 per cent. Hold on. Take a deep breath. Talk to your lender first. Find out how much you will have to pay to get out of your mortgage early. The penalty could wipe out all your profit on the deal. Mortgage penalties come as a big surprise to borrowers who aren’t prepared for them. Banks are often unprepared as well, since the information is buried in the fine print of a mortgage contract. As a result,

TORONTO - Canada's economy grew at a moderate pace in the final quarter of 2011 and is expected to pick up steam in the year ahead, according to the latest economic forecast from the Royal Bank. The RBC Economic Outlook issued early today predicts Canada's real gross domestic product to increase by 2.6 per cent in both 2012 and 2013. It says burgeoning signs of strength in the U.S. economy, low interest rates, solid corporate balance sheets and elevated commodity prices are setting the stage for continued expansion. The pace of consumer spending eased to 2.2 per cent in 2011, from 2010's rapid 3.3 per cent rise. RBC predicts consumer spending this year and next will grow at a rate comparable to 2011, with durable goods accounting for about a quarter of the increase. Regionally, RBC expects western Canada to top the growth rankings in 2012, with Saskatchewan and Alberta leading the way and Manitoba close behind. Newfoundland and Labrador, British Columbia and Ontario ar

Not all debt is created equal – and not all debt is bad. In fact, you need some debt to establish a good credit rating. Being a responsible borrower means knowing which types of debt can help you reach your financial goals and which types leave you further behind. Good debt includes any investment or purchase that helps improve your overall financial position. Mortgage loans are considered good debt because they offer low rates on property that appreciates in value over the long term. You also build equity as you pay down your mortgage. Borrowing to invest is also considered good debt. Often, the interest expense on money borrowed for investments is tax deductible. And when borrowing to maximize your RRSP, you're investing in your future and benefiting from tax sheltered investment growth. Bad debt involves purchases where the value becomes lower than the original cost, and which can carry a high rate of interest, making them harder to pay off. Types of bad debt include high-

The Bank of Canada is warning of an impending housing price correction, putting Canadian mortgage holders at risk. In a four-part series of papers, economists at the bank said a drop in home prices could also impact overall consumption and the Canadian economy. In one of the reports, authored by Brian Peterson and Yi Zheng, the bank cautioned that the risk for fluctuations in house prices has “increased markedly.” The authors noted that house prices have risen sharply in most parts of the country over the past decade, with house prices reaching a historically high level in relation to income. The percentage of household debt to income has risen from 110% in 1999 to 153% currently. “These facts (rising debt and house prices) are interrelated, since rising house prices can facilitate the accumulation of debt,” said guest editor Graydon Paulin, introducing the four papers. “Households could therefore experience a significant shock if house prices were to reverse.” The bank also sugges

The Canadian Press Date: Thursday Feb. 11, 2010 6:56 AM ET OTTAWA — The federal government should avoid major surgery and make only minor adjustments to deal with fears of overheating in Canada's housing market, a number of leading economists said Wednesday. Federal Finance Minister Jim Flaherty and the Bank of Canada have expressed concern that Canadians may be assuming too much debt in home purchases, debt that could rebound on them when interest rates rise. But some solutions being floated in advance of Flaherty's upcoming March 4 budget -- doubling the minimum down payment to 10 per cent, or reducing the maximum amortization period from 35 to 30 years -- could do more harm than good, the economists said. "We want some sort of micro-surgery, not (taking) a pickaxe to the problem," said Avery Shenfeld, chief economist with CIBC World Markets. Bank of Nova Scotia economist Derek Holt said such radical surgery could cause home prices to crash and shake confidence in t

Two items of interest. 1) This past Tues. The Bank of Canada quarenteed to keep its trend-setting rate at 0.25% until the end of June. The implication was there to expect rates to rise after that. If you have a mortgage that is coming up for renewal or are looking to purchase soon, now is the time to give us a call to see how we can help. 2) Street Capital has rolled out the first nationally available 1-year adjustable rate mortgage. Paul Grewal, President of Street Capital, says the product is well-suited to those who expect that “discounts on ARM’s will increase.” It gives people “the flexibility to choose a shorter ARM term,” he adds. Therefore, if you think variable rates will be prime – 0.50% next year, for example, this 1-year variable lets you switch mortgages in 12 months without penalty--instead of waiting 3-5 years. Street Capital also lets customers convert to a 3-, 4- or 5-year fixed rate at any time, with no fee, and at discounted broker rates. Here are some of the key gui