Tag Archives: mortgage renewal

Mortgage Monday Rate Update – April 2013

April 8, 2013

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First off, let me apologize for missing my Mortgage Monday blog posts from the past couple of weeks. I was on vacation back in Vancouver before the big spring mortgage rush hit, and decided to enjoy the beautiful spring weather they already had out there. ūüėČ ¬†Thanks for understanding.

For those that are shopping for a new house, or looking to do a refinance (or even just a simple mortgage renewal), rates and numbers are an important part of the mortgage¬†equation. When rates change even the slightest of percentage points, it could cost or save you¬†thousands of dollars. Every once in a while, here on the¬†Mortgage Monday¬†posts, I‚Äôll update you on what‚Äôs going on in the world of mortgage rates. While the numbers haven’t changed that much, we haven’t done an update here on the blog for a couple of months…

 

  • The¬†Bank of Canada interest rate¬†continues to be stuck at 1.00%. ¬†They meet again next week, but¬†I don’t see this changing for a while yet.
  • The Bank of Canada prime lending rate is also holding steady at 3.00%. It has also been holding steady since Fall 2010 – if the bank rate goes up, the prime lending rate will follow. ¬†We probably won’t see this start to move up well into 2013 or even 2014.
  • The qualifying rate (the rate you would need to qualify at for a variable mortgage) for a 5-year mortgage has actually dropped slightly to¬†5.14%¬†from 5.24%. That being said, there are still not too many folks ¬†getting into a variable mortgage these days with fixed rates continuing to be so low.
  • The current best variable rate (can change on a daily basis) is in the prime-0.40% (2.60%) ballpark, though many lenders are still currently offering ‘prime’ as their variable rate.
  • The current best 5-year fixed mortgage rate (changes daily) has moved slightly lower over the past couple of months and sits in the 2.79%-2.99% range, depending on¬†qualifications¬†and options.¬† Again, always¬†contact your mortgage broker¬†for current best rates for your situation (and as we’ve talked about previously,¬†The Best Mortgage Rate is Not Always the Best Option). ¬†Be careful when looking at some of the heavily discounted rates – many of them are considered “no-frills” mortgages and can come with restrictive options which could end up costing you thousands.
  • While the “hot term” in Canada these days may still¬†continue¬†to be the¬†full-featured,¬†10-year fixed mortgage¬†with¬†rates as low as 3.69%¬†(check out my posts from last year on the¬†10-Year Mortgage Below 4%¬†and¬†Should You Consider a 10-Year Mortgage?), the 5-year term is remaining the “go-to” term in Canada – especially with 5-year rates as low as 2.79%. Based on the history of lending rates, locking in for 10 years at below 4%, or 5 years for less than 3% is nothing short of fantastic.

While I’m happy to provide an update on what’s going on as rates, if you’re interested on getting personalized mortgage advice, speak to your favorite mortgage broker who can help you decide the best rates and options for you.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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10 Things to Consider Before Your Mortgage Renews

October 22, 2012

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Article courtesy of Genworth Canada.

 

  1. Have you explored all your options?  Once you receive your mortgage renewal statement, there’s nothing easier than simply signing on for another term. But while this may make sense in many cases, your family or financial situation may have changed over time. Mortgage brokers can look for opportunities that could better meet your needs right now.
  2. Are you comfortable with your payments?  If you’ve been feeling financially strapped each month making your mortgage payments, this could be the time to reduce them to a more easily managed level. On the other hand, if you’re earning more, why not pay down your mortgage faster and save thousands of dollars in interest over time?
  3. Do you need cash flow for other things? Your priorities may have shifted since you first bought your home, and your cash flow needs can shift too. Things like paying for a child’s university education, planning a career change, or a major purchase such as a vacation property may call for spending money on things other than your home. You may be able to refinance your mortgage to take this into account.
  4. Can you handle fluctuating rates? ¬†Some homeowners are nervous about any hikes in interest rates, while others are comfortable to go with the flow. Rates are tough to predict. It‚Äôs best to base your decision on your personal situation, not what you read in the news, and tailor your mortgage renewal around your needs. Mortgage brokers can help you decide whether to opt for fixed or variable rates ‚ÄĒ and they don‚Äôt want you to lose any sleep over your decision!
  5. Will you sell soon?   If you are likely to sell soon, consider a shorter-term mortgage or one that has flexible terms so you’re not penalized if you sell your house before the mortgage comes due.
  6. Are you thinking about a major renovation?  You know that projects such as a new kitchen or an addition can make your home more valuable. But the cost of having the work done can tie up a lot of money. Before you renew, look at all your financing options, which may include getting an additional line of credit or keeping your monthly mortgage payments low so you have money on hand to finance the renos.
  7. When do you want to be ‚Äúmortgage-free‚ÄĚ? ¬†If you‚Äôre planning extended time away from work or perhaps an early retirement, it may make sense to pay down your mortgage sooner rather than later. While increasing your payments will raise your monthly costs now, you‚Äôll ultimately save on interest in the long term and can prepare for that fabulous, mortgage-free lifestyle.
  8. Could you use your home equity to fulfill other goals?  Refinancing a mortgage can be one way to free up cash you need for other things, which could even include buying another property. Mortgage renewal time is an ideal occasion to review all your options.
  9. Have your insurance needs changed?  If your financial situation has changed since you first took out your mortgage, review whether you need the same level of insurance in place to cover mortgage obligations.
  10. Are you getting the best rates and terms?  In a competitive mortgage environment, your good credit history can make refinancing work to your advantage. Mortgage brokers analyze mortgage markets daily to ensure you don’t miss any money-saving opportunities.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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Don’t Touch That Mortgage Renewal!

May 14, 2012

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The Spring of 2007 saw many Canadians hop into home ownership (and therefore mortgages) for the first time. ¬†The dollar was strong, the economy chugging along nicely, employment was high, and mortgage rates were relatively low. ¬†It’s now 5 years later, and time to renew that mortgage.

Regardless of whether or not times are tougher for you 5 years later, it’s always a good idea to shop around when it comes to your mortgage renewal. ¬†I know it can be a bit of a hassle, but when you’re talking about one of the biggest purchases in your lifetime, it’s probably worth a couple of hours of your time to potentially save tens of thousands of dollars, isn’t it? ¬†Your current lender will probably make it very easy for you to just sign some renewal papers and get back into a mortgage with them for another 5 years. ¬†It’s pretty straight forward and fairly painless to do. ¬†And sometimes, it’s even the best route to go. ¬†But most of the time you’ll find that there are better rates and better options out there for you (and many times, those rates and options can be significantly better than what your current lender is offering you!).

You can always shop around for better rates yourself – most lenders post that sort of stuff up on their websites and in newspapers. ¬†But I think you’ll find the knowledge and service provided by most mortgage brokers is an invaluable asset (and the service we provide is almost always FREE – remember that the lender pays our fees on most residential transactions!).

Instead of potentially throwing money away to your current lender, and rather than spending hours going through websites and newspapers trying to find the best rate, let a mortgage broker do the heavy lifting for you. ¬†We work with dozens of different lenders, and because we play around in the sandbox of mortgages all day every day, we can easily get you set up in the best mortgage for you, and save you a bunch of time and money at the same time. ¬†It’s a win-win for everyone (well, except for your current lender if they’re not offering you the best rates from the start). ¬† ūüėČ

So don’t touch that mortgage renewal package you got in the mail from your current lender – instead, send your favourite mortgage broker off an email or give one of us a call, and we’ll help you place you in a mortgage that best suits your current situation.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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Don’t Sign That Mortgage Renewal

September 19, 2011

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The major banks currently renew somewhere between 80-90% of the mortgages they hold, and the majority of those renewals are done at posted rates (posted rates are the rates that are publically advertised by the banks, and the rates also used for qualifying for a variable rate mortgage). Many clients, especially those with a steady job and decent credit, can get way better than posted rates (for example, the posted rate at most banks is currently around 5.39%, but many of my clients are currently able to get a 5-year fixed rate of around 3.49% – that’s 1.9% cheaper!). Paying posted rates could end up costing over $18,000 in just 5 years on a $250,000 mortgage amortized over 25 years. That’s not chump change!

Sometimes getting a better rate from the banks is as simple as asking for it – but why would you want to do business with a company that won’t give you the best rate up front? Save yourself tens of thousands of dollars and make sure you either negotiate a better rate at your branch¬†every time your mortgage comes up for renewal, or even better, ask for some help from a licensed mortgage broker, and let us help you get the best rate and options for your mortgage renewal. ¬†We can survey all the lenders we have access to and help you not only get the best rates available to you, but also figure out which options (pre-payment¬†privileges, term, etc) best fit your current needs and lifestyle requirements.

So the next time you receive a renewal notice from your bank in the mail, remember that it’s worth the time to negotiate a better rate – just signing it and sending it back could cost you thousands every year.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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