March 15, 2016 Best Mortgage Rates Update

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Busy Week!

It's been a busy week for me. Seems the market is now forcing people to pre-plan with their mortgage brokers and I am doing a lot of affordability scenarios for buyers. The local real estate market is still pumping, and while some buyers are deciding to sit on the bench, others are determined more than ever to jump in.

On March 9, the Bank of Canada decided to keep the overnight lending rate unchanged. Seems appropriate given that the price of oil seems to have found bottom and is beginning to creep northward once again. Global economic instability is still a concern, but the slight rebound of oil has given our currency a boost in recent weeks, and could indicate that max-pain for Canada's economy has passed us by. 

Not much time for analysis this week - but be sure to check out my latest article on three relatively unknown factors that largely determine what interest rate you pay on your mortgage. The Mortgage Rate Triangle - How to ensure you get the best rate possible.

Coming Soon:

I've got a new calculator in the works. This one will calculate the new property transfer tax exemption amounts for 'Newly Built Homes' and First Time Homebuyers. Standby for more info on this one.

Now is the Time to Really Lean on Your Mortgage Broker

Now more than ever, buyers need to lean on their mortgage broker for advice long before writing an offer. Your mortgage broker should give you a tight set of defined purchase price boundaries – something you can use while searching for houses.

Not only this, but your broker should give you feedback on specific properties that you may be interested in. Your broker can also advise you on how safe it is to proceed with an unconditional offer, and what closing dates may get you the best interest rate. (Yes, interest rates are highly determined by closing date.)

If all of this sounds like a big fuss to go through – trust me, it’s not. I offer this service with a 45-minute initial client appointment. Within a day, I’ll send you a comprehensive set of price guidelines – usually with 3 different scenarios. Once you start looking, all it takes is a phone call/email/text and I can offer property-specific mortgage advice/feedback – almost immediately.

Not only does this give you a competitive advantage in the marketplace and the potential to get a cheaper mortgage, but it also ensures you don’t get carried away with all the excitement and make an unconditional offer you would have trouble qualifying for.

Call me today for an appointment. 250-858-8564

Important Dates:

New downpayment rules are now in effect after February 15, 2016.

Use my new Closing Cost Calculator for First Time Homebuyers to figure out what your minimum downpayment would be under the new rules. (You don't have to be a first time homebuyer to use the calculator)

Rates:

Mortgage rates dropped this week after 2 weeks of holding firm. The lowest fixed rate offered right now is 2.39%. Several mono-line lenders are competing with decent products in the 2.44% - 2.54% range. 

Variable rates are still sitting rather stagnant. Discounts off prime are pretty weak, and with the super low fixed rates, the spread between fixed and variable rate mortgages is super thin. Considering a brighter outlook for Canada's economy, it makes real sense to lock into a fixed-rate product right now, rather than perhaps endure potential rate hikes over the next 3-4 years. Some full featured quick close variable rates are closing in on P-0.4% (2.3%) and some low basic rate products are digging into P-.55 (2.15%) territory again.

Big Banks continue to lag behind the mono-line lenders. They simply are not in the game right now. If you have a renewal notice from your big bank, come see me right away. I guarantee I will beat their rate and save you some money.

Best credit union option for a 5-year fixed is currently is Coast Capital at 2.79%.

5 Year Fixed Rates5 Year Variable RatesHELOC
Quick Close Specials2.39% - Must Close within 45 Days - High Ratio OnlyP-0.4% (2.3%) 45 Day CloseP +0.5%
Best Standard Rates2.59% - High Ratio - 45 Day Close 2.64% -Conventional - 90 Day CloseP-0.35% (2.35%)P +0.5%
Low Rate Basic Products2.44% -Must Close in 90 Days - High Ratio Only 2.54% - Must Close in 90 Days - ConventionalP-0.5% (2.2%) - Must Close in 90 Days - High Ratio Only P-0.4% (2.3%) - Must Close in 90 Days - Conventionaln/a
Credit Unions2.79%P-0.25% (2.45%)P +0.5%
Pre-Approvals2.79%--

* Low Rate Basic Products have great rates, but have restrictions that include high discharge penalties, inability to blend mortgage rates if you sell & buy, inability to leave lender during term, etc.

Other Rates:

Lender Prime2.7%
Bank of Canada Key Overnight Lending Rate0.5%
Next Bank of Canada Rate Update April 13, 2016
Benchmark Rate4.64%
5 Year Government of Canada Bond Yield (March 14, 2016)0.78%

Mike Grace is an independent full-time mortgage planner and industry insider located in Victoria, BC. If you are purchasing, refinancing or renewing your mortgage, contact Mike to obtain the best available rates and terms.