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In the News
Bank of Canada
Rate Update
At last week's meeting it was determined yet again to leave the
overnight lending rate unchanged. With that, the prime lending
rate remains the same also at 3%. It is expected that the rates
will remain unchanged until at least 2013. The big question today
is whether or not choosing a variable rate is the right choice for
you. Prime rate determines what the variable rate will be from
each lender. Currenlty the best variable rate is a Prime minus
0.35%, which means for the term you will always have a rate of prime
minus 0.35%. Today that would make the rate 2.65%. If the
prime lending rate were to increase to 3.25%, the rate on your mortgage
would in turn be 2.90%. The next scheduled bank of Canada meeting
is October 23, 2012. Let's hope the rates stay the same.
What is the
minimum down payment required now?
With all the talk about mortgages lately I think there is some
confusion about how much money actually needs to be put down. I
have heard some clients tell me that they can't buy a house because
they don't have 20%. That is simply not true. If you
qualify you can buy a house with as little as 5% down, in some cases
there are products which allow for no money down. On a house
priced at $400,000, 5% would $20,000. In some cases if you
qualify, you can use an existing line of credit or loan as a down
payment. The product is called Flex Down and it is crucial the
lender knows up front where the down payment is coming from. Even
with this product you can still qualify for the best rates
available. In cases where you are considering refinancing a house
you already own the maximum loan to value is 80%. What that means
is if you have a house valued at $400,000 the maximum mortgage
refinancing you could qualify for is $320,000. In some cases
there is a possibility to access up to 85% of your home's value.
It is important to know on these though your rate could be impacted or
a second mortgage may be needed.
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