BOC Sees Recession Turnaround in 3rd Quarter

It looks like we have finally reached the promise land. After nearly 2 full years of a slowing economy, it appears that things have turned around. The Central Bank of Canada predicted that Canada would be heading out of the recession in the 3rd Quarter of 2009. The data is not out yet, but it is likely that the Bank will have forecasted correctly, as many of the current market indicators reflect a once again growing economy(visit my blog entry about market indicators here). Even with this news, the Bank remains prudent and has not yet raised its key interest rate from 0.25% --meaning variable rate mortgage holder are safe, for now.

For homeowners with existing Variable Rate Mortgages in place, this may be the time to convert to a Fixed Rate Mortgage –and prolong the one good part of the recession. As the economy recovers, fixed rates will continue their upward trend and the Prime rate is sure to rebound. For instance, in 2009 the 5 year fixed rate has gone from 4.99% to 3.29% to 4.09%* today. As the market recovers, expect to see higher five year fixed rates --as the market compensates for government cash infusions over the past 24 months.

For more information about interest rates, or to discuss the available options with a mortgage broker, call Anuj Gupta, AMP, BComm, Mortgage Associate with Alberta Mortgage @ 780-479-2222 ext 14 or visit http://www.albertamortgagecentre.com.

*subject to qualification criteria

Variable Rate Market Heating Up

It looks like the Variable Rate Mortgage market is getting competitive. In mid-2007, Variable Rate Mortgages seemed like they could become a thing of the past. Products went from Prime - 0.9% to Prime + 1.50% within 1 week, and many lenders discontinued the programs altogether. But now, as the market has regained some confidence, competition has returned to the world of the Variable Rate Mortgage. Over the past 45 days, Variable Rate Mortgage products have fallen as low as Prime + 0.25%, and this morning, out came news that Canadian homeowners now have access to a Variable Rate Mortgage with an interest rate of Prime + 0.15%.

If the trend continues, it is possible that we will see an at-Prime Variable Rate Mortgage before the end of 2010 --and possibly even a return to the days of Prime -. But for now, I'll take whats on the table.

To learn more about Variable Rate Mortgages, call Anuj Gupta, AMP, BComm of Alberta Mortgage @ 780-479-2222 ext 14 or visit http://www.albertamortgagecentre.com today.