Canadian Mortgage Bond Yeilds Jump --Possibly Resulting in Higher Fixed Mortgage Interest Rates

Mortgage Bond Yields have moved upwards by 0.30% since Monday, June 27th, 2011. With that increase in mind, it is possible that we will see financial institutions across the Country raise Fixed Mortgage Interest rates in conjunction to offset the increased cost of the mortgage money they are lending out.
As of this morning(July 4th, 2011), we've already seen the Royal Bank increase its 5 year posted rate by 0.15%(15 basis points) from 5.39% to 5.54%(source: money.canoe.ca). While RBC's increase does not necessarily mean all lenders will follow suit, the possibility of an across the board increase does exist --it may be a good time to get a rate hold in place through a mortgage broker near you.

To get a mortgage rate hold, call one of the qualified mortgage brokers at Alberta Mortgage at 780-479-2222, or visit www.albertamortgagecentre.com today.

Fixed Rates Trending Downwards

After an increase of over 0.4% earlier this year in five year fixed mortgage interest rates, fixed rates for nearly all term lengths are falling this week. At it's height, the five year fixed rate being offered by many lenders had gone all the way up to 4.19% just a few weeks ago. Now, with the surge in real estate, and mortgage activity easing as we close in on the March 19th, 2011 deadline for mortgages to offer 35 year amortizations and refinancing up to 90% --the market has again eased and rates have correspondingly dropped. As of today, here are the best rates available through Alberta Mortgage:

Term Rate %
variable rate Prime - 0.80%
1 year closed 2.64
2 year closed 3.20
3 year closed 3.35
4 year closed 3.79
5 year closed 3.84
10 year closed 4.99

As always, all these rates are subject to qualification criteria and can change without notice. To get the most up to date rates, call one of the qualified mortgage professionals at Alberta Mortgage, or visit www.albertamortgagecentre.com.

To find out more about how the changes to mortgages can/could affect you, call one of the qualified mortgage professionals at 780-479-2222.

Today's best rates:

Mortgage Term Rate(%)
variable rate Prime - 0.80%
1 year closed 2.85
2 year closed 3.20
3 year closed 3.35
4 year closed 3.89
5 year closed 3.84
10 year closed 5.15

All rates are subject to qualification criteria and can change without notice. For up to date mortgage rates and information, visit www.albertamortgagecentre.com or call 780-479-2222 today.

Alberta Mortgage's Weekly Rate Update

For the most part, rates have held steady this week. Look for some movement in the coming weeks as market activity picks up.


Mortgage Term Rate

variable rate Prime - 0.80%
1 year closed 2.54
2 year closed 3.15
3 year closed 3.19
4 year closed 3.69
5 year closed 3.74

All rates are subject to qualification criteria and lender availability. Rates may change without notice.

For more information about mortgage rates, visit www.albertamortgagecentre.com today.

Prime Rises Again...

Last week, the Bank of Canada(BoC) raised its key overnight lending rate by 0.25%, resulting in a corresponding increase to the Bank's Prime interest rate to 3.00%. For the Central Bank to have taken this action in the midst of continuing uncertainty, and ongoing fears of a double dip recession can be viewed as a sign that the Canadian Government is confident in the Canadian economy's ability to sustain it's momentum; but also can be viewed as a sign of the Central Bank's insistence for keeping to its schedule for the economic stimulus program.

For those with Variable Rate Mortgages, this is an important time to evaluate your situation and discuss the impact of a rising Prime on your mortgage with a licensed mortgage professional. Since most variable rate mortgages offered by Alberta Mortgage carry the option of converting to a fixed rate, now would be a good time to sit down with a broker and evaluate your options.

For more information about mortgage interest rates, or to discuss your situation, contact one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com.

Fixed rates continue slide

5 year fixed rates have dropped again. As of today, potential and existing home owners in Canada can get a mortgage with a 5 year fixed mortgage interest rate as low at 3.89%.*

For more information regarding mortgage interest rates, or to get pre-qualified, contact one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com.

BoC Drops Mortgage Qualifying Rate Once More

Just 2 weeks after its last drop, the Bank of Canada has reduced its mortgage qualification rate once again by 0.10%. The mortgage qualification rate has now been reduced to 5.79% after reaching a high of 6.25% earlier this year.

For more information regarding mortgage rates and qualification, call one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com.

BoC drops mortgage qualifying rate again

This week, the Bank of Canada lowered its Bank of Canada Posted Interest Rate from 5.99% to 5.89%. This move can be interpreted as a signal of the Bank's lowering its forecast for rate hikes in the coming months or even years.

For more information regarding mortgages, mortgage interest rates or to get pre-qualified, call one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or Apply Online.

More Pressure on Fixed Rate Mortgages

Just 1 week ago, the vast majority of prime mortgage lenders in Canada raised their fixed mortgage interest rates for 3-5 year closed term mortgages. It appears that rates are again set to be increased. Canada's largest bank, RBC has just issued a press release confirming that the bank will be increasing its fixed interest rates by an additional 0.25%, effective Wednesday April 14th. While it is unclear as to whether RBC's competitors will similarly increase their rates for the second time in 10 days --it is clear that financial institutions are looking to increase fixed mortgage interest rates.

If you are looking to be in the market for purchasing a home sometime within the next 3-4 months, it may be a good time to contact a mortgage broker and secure a rate hold --thus protecting yourself from further increases in rates.

For more information regarding interest rates, or to get prequalified, contact one of the qualified mortgage professionals at Alberta Mortgage @ 780-479-2222 or Apply Online @ http://www.albertamortgagecentre.com.

Government of Canada tweaks rules on mortgage qualification

Earlier this week, a few changes to mortgage qualification in Canada that would be implemented on April 19th, 2010 were announced by Finance Minister Jim Flaherty. These changes include an adjustment in the qualifying rate used in mortgage qualification, a reduction in the amount of equity Canadian Homeowners will be able to pull out of their homes, and an increase in the down payment requirement for those looking to purchase rental/revenue or investment properties.

Here's an explanation, and my take on these changes:

1. Borrowers will need to qualify using a 5-year fixed rate regardless
of what term they choose. If you want a 1.95% variable rate, for
example, you will need to show that you can afford payments at the
lender's 5 year rate. Since banks use their posted rates(normally at
least 1% higher than what you eventually get down to after
negotiating) to qualify potential borrowers, this change will have a
much greater effect on them as opposed to some of the lenders
available through mortgage brokers(who only have 1 fully discounted rate
available). While it has not yet been clarified as to whether ALL mortgage lenders will be required to use the same rate, my understanding is that each lender will be using their own posted bank rate.

2. No longer will you be able to refinance your home to 95% of it's
value. 90% will be the new refinance maximum. The bad thing about this
change is that homeowners will no longer be able to replace as much
high interest credit debt with relatively lower interest mortgage
debt. The good news is that upon sale, you will be more likely to have some equity left in the home.

3. People buying non-owner occupied rental properties will need to put
down 20% to get an insured mortgage, versus 5% previously. The idea
behind this move is to reduce speculative purchasing in the Canadian
Market, and provide more breathing room to investors in the event of market property value swings.

Keep in mind that these changes will only take effect on April 19th,
2010 --meaning buyers still do have a little time to get into a
home/refinance/buy an investment property before things change. One
thing of note however, is that most mortgage lenders in Canada are
likely to implement these changes BEFORE April 19th in order to ensure
that all files are being underwritten in accordance with the new
legislation on the effective date of change.

For more information regarding these changes, call one of the qualified mortgage professionals at Alberta Mortgage @ 780-479-2222 or visit www.albertamortgagecentre.com today.

Fixed Rates Set to Rise

After an up and down 2009, it looks like 2010 will be starting off with rising interest rates. With the economy appearing to have begun recovering, fixed mortgage interest rates are now expected to move upwards in an attempt to combat rising inflation. As interest rates rise and property values increase, it may become increasingly difficult for prospective home buyers to qualify for mortgage financing. It may be a good idea at this time to contact a qualified mortgage professional now and secure a mortgage rate if you are looking a purchasing a home sometime in the first quarter of 2010.

For more information about interest rates, and to secure a rate hold call one of the qualifed Mortgage Associates at Alberta Mortgage @ 780-479-2222 or visit http://www.albertamortgagecentre.com.

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

5 Year Fixed Rate Mortgage Interest Rates Fall...Slightly

5 year fixed rate mortgage interest rates have fallen slightly after experiencing upward movement by as much as 0.6% over the previous 45 days.

As of today, 5 year fixed rate mortgages are available with an interest rate as low as 4.29%, subject to qualification criteria. We have also seen some downward movement in the variable rate products offered by many lenders, now available as low as Prime + 0.35% (2.60%), subject to qualification criteria.

For more information, call one of the qualified mortgage professionals at Alberta Mortgage @ 780-479-2222 or visit us online at www.albertamortgagecentre.com.

It looks like things might be getting ready to change

It appears that things may be on the verge of changing in the world of fixed mortgage interest rates. Below is some information about bond rates in Canada and their effect on fixed mortgage interest rates.

• Canadian 5 yr bond yields + .07bps to 2.09 - Four weeks ago it was 1.86. The spread today vs the 5 year rate is now down to 1.67%.
• http://www.financialpost.com/markets/market-data/money-yields-can_us.html?tmp=yields-can_us NEW LINK

The yield, rate of return on your bond, can be read through a yield curve, which is the pattern of yields on bonds. This increase in bond yield is something to watch. If the bond yield continues to go up, the spread will continue to shrink and this could be a trigger for interest rates to rise!

For more information about interest rates, or to apply call one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com.

Fixed Mortgage Interest Rates Continue to Fall

Five year fixed mortgage interest rates have fallen again, creating even greater opportunity for prospective home buyers who were unable to afford home ownership in the past. the combination of existing real estate values and historically low fixed mortgage interest rates means home ownership is now much more affordable than it was over the past 3 years.

To find out if you qualify to purchase a home contact one of the qualified mortgage associates at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com.

Tips for minimizing the cost of your mortgage in today's economy: (renewals)

If your mortgage is coming up for renewal, there are a variety of strategies that you can and should employ in order to minimize the cost of your mortgage at the time of renewal. This article will provide you with a pair of simple strategies to employ at renewal time that will help you save money, and get a mortgage that will best meet your needs.

1. Learn about the available mortgage rates and products. Perhaps the most important thing to do at renewal time is also the simplest --shop around. Most Canadian Homeowners simply renew their mortgage with their current mortgage holder without first finding out what other rates or products are available to them. As a result, homeowners may end up with a higher interest rate, or with a mortgage product that does not provide options that will best meet their needs. When renewal time approaches, being educated it is just as important as it was when you first got your mortgage.

2. Assess your own financial and personal situation and determine whether this would be a good time to refinance, instead of simply renewing. Most Canadian homeowners have mortgages with closed terms because they generally offer lower interest rates. However, one drawback with closed mortgages is that they often have prepayment and payout penalties attached to them --meaning that when you refinance, sell your home or otherwise pay off your mortgage, you pay a fee. This means that when you want to take out equity from your home, you may have to pay these costs. However, at the time of renewal these penalties often do not apply. As a result, you save the cost of a payout penalty.

By using the strategies discussed above, you can save yourself money and get a mortgage product that will best meet your needs and satisfy your financial aspirations. To learn about more money saving mortgage strategies, consult a mortgage broker or visit www.albertamortgagecentre.com.

What is going on in the financial market, and how will the present situation affect the average existing/prospective mortgage holder?

The financial world is a constantly evolving context, in which both economic factors and pure human emotion can enrich or impoverish the lives of millions. At present, the world financial markets are in a state of panic as the World's investors are extracting their funds from the marketplace, holding on to the denominator in which they trust --cash. As investors flea, money markets shrivel, and the financial world experiences the phenomenon we've all been hearing about: The Credit Crunch.

So what is the Credit Crunch?

When millions of investors extract their money from the market (over 2 trillion dollars), businesses become unable to secure funds for doing business. In the case of banks, investment firms, mortgage companies and the like, when they become unable to secure market funds for doing business, they are forced to search out investors who demand higher rates of return, and demand more oversight over the use of their funds. As the cost of funds increase for lenders, the costs of funds are passed along to borrowers. Increased costs, and more stringent guidelines mean less borrowers can qualify for loans and therefore less money goes into the market to again be borrowed and lent. As a result, credit continues to become more and more difficult to secure, and borrowing costs continue to go up until funds become available. Knowing this, central banks around the globe have made recent efforts, injecting what will end up being trillions ($24 billion and $700 billion in Canada and the United States alone, respectively) into the market and lowering prime lending rates in an effort to make lending money easier and cheaper once again.

What does all of this mean for the mortgage of the average prospective/existing homeowner?

As the availability of credit dries, fixed mortgage interest rates swell due to the increased cost(s) of lending. However, cash injections by central banks around the globe should help re-establish security in lending markets and hopefully limit further increases in fixed mortgage interest rates. Even with significant cash injections, I believe that fixed mortgage interest rates will continue to rise as lenders attempt to recoup 2007/2008 losses. In contrast, with prime lending rates dropping variable rates become increasingly affordable with one exception --most lenders are pausing, postponing, increasing or altogether eliminating variable rate mortgages from their product offering lineup. If you already have a variable rate mortgage at Prime - (0.00 to 0.90)% then I think you are safe, and will be enjoying what are and will be historically low mortgage interest rates as central banks continue to lower the Prime lending rate in attempt to bolster cash strapped economies. Those who have a variable rate mortgage should be in good shape --even while the road ahead may be full of bumps of anxiety. At the same time, many lenders are eliminating variable rate mortgages from their product line --therefore inhibiting many prospective/exisiting homeowners from taking advantage of potential Prime rate decreases in the near future.

Even with recent increases, fixed mortgage interest rates remain historically low. While fixed mortgage interest rates have increased by nearly 1% since August of 2008, they remain competitively priced, allowing for Canadians to comfortably afford the cost of credit. The market is still well capable of providing Canadians with the ability to afford owning real estate, and will continue to be among the leaders in the world financial marketplace in quality product offerings, consistency, and rate competition.

For more information about any of the above discussed mortgage topics contact one of the edmonton mortgage brokers at Alberta Mortgage @ (780)479-2222 or visit www.albertamortgagecentre.com.