Mortgage Rates

All mortgages are not created equal, and making the wrong choice can end up being a costly or frustrating decision. This is exactly why you should never choose a mortgage based on rate alone . Trying to save a few hundred dollars per year on rate can sometimes end up costing you thousands down the road.  An educated mortgage borrower is a smart mortgage borrower, and smart borrowers will end up saving the most money long term. And saving money is what it’s all about! It’s gre

Given that the Bank of Canada has increased their rate by a whopping 3.50% in roughly seven months, it’s only natural to be concerned. Especially considering that they have made it clear that more rate increases will be required. But that shouldn’t have come as a surprise given that this was the expectation all along. What was more surprising was that the BOC increased by 0.50% when the market was expecting a larger increase of 0.75%. While nobody in a variable rate mortgage

The Bank of Canada announced this morning that they will be increasing their overnight rate by another 0.50%. The overnight rate is what mortgage lenders use to set their prime rate, which means it will now increase to 5.95%. The increases should be implemented by all lenders within the next couple of days. The good news is that they only increased the rate by 0.50%.  I never thought I would ever say that an increase is ‘good news’, but many were expecting it to increase by

Anyone shopping for a new home over the last few years has had their share of frustration navigating through the sea of buyer competition. The rising interest rates have not made things any easier. As rates rise, so does the qualifying rate (stress test). This makes it difficult for many, first time homebuyers in particular. Some are already finding themselves shut out of the market all together….and it’s about to get tougher. Mortgage Qualification in Early 2022 Vs. Qualific

With mortgage rates continuing to rise, it’s becoming harder for people to purchase real estate, first time homebuyers especially. There was a time when qualification was based on the actual mortgage payment, however that changed toward the end of 2016 with the introduction of the mortgage stress test. The stress test significantly limits how much people will qualify for, which can make it challenging for many to get into the real estate market. While some industry profession

When purchasing a new property, you can generally count in it to close on time. Sure, there are some rare exceptions, but they are indeed rare.   Purchasing is one thing, but what about closing a new mortgage when transferring to another lender at time of renewal? While the majority of mortgage transfers will close on time, late closings are far more common when compared with purchases. But why would a transfer close late?   ….and if it does, what are the consequences? There

There are many decisions to make when arranging a new mortgage. Whether to go with a fixed or variable, amortization period, payment frequency, and term length. Prior to mortgage rule changes that came into effect on November 30, 2016, short term mortgages usually came with lower rates than the 5 year options. The shorter the term, the lower the rate. Times have changed, and there hasn’t been much interest in shorter term mortgages ever since. Fast forward to today, and shor

One of the most common questions I get is whether it’s better to go with a fixed or a variable rate mortgage. History has shown variable to win out over fixed more than 80% of the time, but considering that prime rate has already increased by 3.00% with more increases planned, is variable rate now too risky to take the chance? While some will always recommend going with a variable rate, there are five things to consider before making the choice. My advice will change periodi

On September 7 th , the Bank of Canada increased their rate by another 0.75% which was not surprising. Two of the big six banks (CIBC and National Bank) were not anticipating any further increases in 2022, while the other four (RBC, Scotia, TD and BMO) had forecasted another 0.25% increase in the fourth quarter.  Where they were all in agreement is that they weren’t expecting any further increases in 2023. But then the Bank of Canada stated in their recent announcement that t

The Bank of Canada announced this morning that they will be increasing their overnight rate by another 0.75%. This means that prime rate will rise from 4.70% to 5.45%, which is the highest it has been since 2008. This means that the Bank of Canada has now increased their rate by 3.00% in just six months.  But will they stop here, or is this madness expected to continue? Scotiabank, RBC and BMO all believe that we’ll see one more increase of 0.25% before the end of the year. T

If you are in a true variable rate mortgage , your payment will remain unchanged for the term. This can give peace of mind to many as it guarantees a predictable cash flow each month. When the rate increases, then a larger portion of that payment will be applied to interest with a  smaller portion going to principal.  However, the payment always remains the same.  But that doesn’t guarantee that you will never have to pay anything more towards your mortgage over the term. If

The Bank of Canada has increased their overnight rate by 2.25% since March, and they are not finished yet. Their next scheduled rate announcement is on September 7 th where they are expected to increase by another 0.50% to 0.75%. This would mean that prime will increase to 5.20% to 5.45%, which will be the highest since 2008. It’s understandable that everyone has had enough of this. Fortunately, there is some good news. The big six banks all believe that these will be the la

While starting or growing a family can be an exciting time, it represents a big change in your life. It can also bring on new challenges such as additional expenses and reduced income. As income is one of the main components of mortgage qualification, many wonder if going on maternity leave will affect their ability to qualify. While each lender has their own policies surrounding maternity leave, most of them will still consider 100% of your full salary providing that you hav

Contrary to popular belief, lenders are not making hundreds of thousands of dollars off your mortgage. You might think that they are laughing all the way to the bank when they increase their rates, but this is not the case. This is because mortgage lenders don’t make their money on the rate itself. In fact, their profit can be the same regardless of whether the rate is 2.00% to 8.00%. So if the rate isn’t what determines their profit, then what is it? Mortgage lenders will se

With the prime rate increasing by 2.25% since March, it’s only natural that many are worried about how much higher it will go. There is no shortage of doom and gloomers who will make it sound as though the sky is falling. “Rates are going to 20%!” The mere thought of this is enough to scare the living daylights out of just about anyone. Fortunately, the doom and gloomers are usually wrong.   But there is some bad news. The Bank of Canada is not yet finished with their rate i

Since October 2021, fixed mortgage rates have been stuck a seemingly never-ending upward trend resulting in increases of more than 3.00%. Fortunately, it looks as though the upward trend has come to an end.   This leads to a few questions: Why are they dropping? How much have they dropped? How much lower can we expect them to go? Firstly, we’ll take a closer look at how fixed mortgage rates are determined. How Lenders Price Fixed Rate Mortgages A lender’s profit on fixed mort

If you’re like most homebuyers, you got preapproved to find out how much you will qualify for prior to shopping for your new home.  Having a solid preapproval in place can give you the reassurance and peace of mind in knowing that you can put in unconditional offers to purchase your new dream home with confidence. But is this really true? The Impact Of The Prime Rate Increase On Mortgage Qualification The Bank of Canada increased their key policy rate by 1.00% last week, w

It was widely anticipated that the Bank of Canada would increase its key policy rate by as much as 0.75% in this morning’s scheduled announcement. However, they shocked the market by taking it one step further and increased it by a full 1.00%. This is the largest increase we have seen in a single announcement since 1998. The new prime rate will move from 3.70% to 4.70%, which is 0.75% higher than it was before the pandemic started. But why such a bold increase, and what does

Since the beginning of year, almost every piece of mortgage related news has been about increasing rates. As fixed mortgage rates have increased by roughly 3.00% since the fall, it’s understandable that they are getting their share of the headlines. But has the fixed mortgage rate increasing madness finally come to an end? For the first time this year, there is now downward pressure on fixed mortgage rates. But will they actually drop? How Fixed Mortgage Rates Are Determined

The question that many have on their minds is how much higher will rates go. Fixed mortgage rates have increased by roughly 3.00% since the September 2021 while the prime rate has increased by 1.25%. It’s no big secret that the Bank of Canada is not finished with their rate increases which will continue on July 13th.  But will fixed rates continue to rise as well? Let’s first discuss what we can expect to happen with prime rate, then we’ll follow with what we can expect from