Deciphering Mortgage Rates: Fixed vs. Variable Interest Explained

Did you know that the Bank of Canada’s Rate announcements don’t have any impact on the fixed rates at all?  I get several inquiries a day and there is a consensus that they do.  For instance, a new home buyer might suggest waiting to purchase a home as there has been a lot of talk around future decreases by the Bank of Canada, yet they are interested in a fixed rate mortgage.  Let me explain.

Variable Rates move with the Bank of Canada’s overnight lending rate.  For instance, if the Bank of Canada decides to reduce the overnight lending rate by 0.25%, then the lenders will adjust their Prime Lending Rate by reducing it by the same 0.25%.  The only metric manipulated by the lender is the spread between Prime Lending Rate and the rate offered by the lender.  So, if a lenders prime is 6.95%, the lender might offer a rate of Prime Minus 1.00%, which leads to a rate of 5.95%.  That same rate of 5.95% will move with the prime rate.  If the Prime Rate moves, then so does the rate accordingly.  The lender’s Prime Lending Rate also has the same effect on a Home Equity Line of Credit.  Lender’s can adjust their rate spread anytime, but it would have no affect on a mortgage already in place.

Fixed Rates typically follow the trends of Canada Bond Yields.  So, this would be a good metric to follow when determining where fixed will rates will go.  If Bond Yields trend upward, you can expect the fixed rates to do the same.  The same goes if Bond Yields trend downward, you can expect the fixed rates to do the same.  While it is not a perfect science, it is about the best metric you can you use to see where these rates are going.  Fixed rates also depend on a lender’s appetite for mortgage business.  Another determining factor is inflation, as inflation numbers go up, Bond Yields tend to follow and the same goes for decreases. 

In conclusion, the Bank of Canada’s rate announcements do not have any effect on Fixed Rates, they only effect Variable Rates.  Rates can be complicated, you should contact a broker, myself for assistance as to what might be best for your situation.  I can help you navigate this complicated space so you can make an informed decision. 

Get off to a Great Start by going Debt-Free!

 

You Can Get Out of Your Debt-Cycle by Using Your Home Equity

Credit Card debt, lines of credit, loan payments and interest payments could be standing in the way of your financial security. With rising costs for pretty well everything, it could make it near impossible to get ahead with your debts. Now is a great to take control of your debt cycle through Debt Consolidation or an Equity take out. It’s a simple concept: roll up all the extra debt owed outside of your mortgage and consolidate it in to an existing mortgage or a new mortgage. If you have equity in your home, it is the simplest way to eliminate debt. Getting in touch with me, I can quickly assess your goals to figure out what your options are. Best of all, my advice is under no obligation and it is free. Key Advantages of Debt Consolidation: · Trading multiple higher-interest debts for one lower rate · Lowering your monthly payments · Get out of debt faster and free up some cash-flow · With my strategies I can show you how to pay off your mortgage faster also Debt consolidation can offer a big relief for someone who is struggling with their monthly debt load. If can’t help you, I more than likely can offer some solutions that can help also.

Purchasing a 2nd Home May Not Be as Difficult as you Think!

 Are you Interested in Purchasing a 2^nd Home?

Did you know you may be able to purchase a 2^nd home with as little as 5% down payment?  I have recently found several inquires involving questions with respect to minimum down payment requirements.  Most people are of the opinion that there is a minimum down payment requirement of 20% which puts this option out of a reach for most.  That is not the case. 

I recently arranged a mortgage for a client who wanted to help her daughter and son in law get into a new home, but they could not qualify for the mortgage on their own, we did a new house purchase with 5% down.  I also assisted some other clients in purchasing a vacation home that they can enjoy with their family.  These clients used their Home Equity Line of Credit to come up with the minimum 5% down payment requirement.

• I have a number of lenders who offer mortgages under their 2^nd Home Program.  Below are just some of the benefits to this program.
• Purchase a home with as little as 5% (must be below $500,000, otherwise 10% of everything over $500,000 for a down payment)
• Access to the lenders best rates, so won’t be penalized
• Exercise the lenders pre-payment privileges to pay down your mortgage faster
• Can you your existing homes equity to come up with the down payment
• Purchase a vacation home
• Purchase a home for your children
• Turn your current home in to a rental so you upgrade your house

My lenders are flexible and offer excellent solutions for purchasing your 2^nd home.  Within just a couple of minutes I can help you come up with a budget so you can start your new home search.  Call me now to explore your options. 

Please note, property must be owner occupied, 2nd homes occupied by related family members is ok. 

Do you know where your mortgage stands? Get a Free Mortgage Health Check-Up!

 

5 Reason Why My Mortgage Health Check is Crucial

An annual review of your mortgage is really important as your needs and life circumstances may have changed. As your “Mortgage Broker for Life”, I provide a Free service in which I will review your mortgage and your individual situation to review as part of my Mortgage Health Check-Up. You may have a mortgage that is not right for you anymore. Please see 5 signs that you may need a Mortgage Health Check-Up You may have a Rate Higher than you could get today. Both Variable Rates and Fixed Rates are still really good. Interest rates appear to be on the rise so a matter of days could cost you thousands in rising interest costs. You may be carrying a lot of debt at very high interest. If you are sitting on even $20,000 in debt, you could save Hundreds, if not Thousands in interest and lower your monthly payments. Your house may be in need of costly renovations or upgrades. Including these expenses in your mortgage will a lot cheaper than trying to obtain 3rd party financing at higher interest rates. We have a refinance plus improvements program which is extremely useful in these situations even if you don’t think you have enough equity. Is your mortgage up for renewal this year or next? I have helped a number of clients lately get in to lower interest rates now. You won’t have to worry about future rate increases. You have an extraordinary expense coming up. Do you have a child going to college, or getting married? Perhaps you want to help your children to purchase a house of their own. Book NOW!! You can easily click on the link below to schedule a convenient time what works for your schedule. You can give me a call just about anytime if your would prefer. I look forward to speaking with you! If you think this information could help out a friend or a family member, I would really appreciate it if you would forward this  or provide them with my contact information. I will look after them as if they were a friend or family member to myself.

Book a Virtual Meeting Now!!

Phone / Text 403-828-1838 Email: mortgages@shawnmooney.com Website: www.shawnmooney.com

Some conditions may apply. Rates are subject to change. Subject to lender / insurer approval.

Bank of Canada Increases Overnight Lending Rate

 

Bank of Canada Increases Overnight Lending Rate

Hello Shawn As expected the Bank of Canada increased their overnight lending rate by 0.25%, raising the Prime Lending Rate for most if not all of the lenders to 2.70%. Here are a couple of things that you need to know. Prime Rate Change: Most if not all of the lenders changed their prime lending rate from 2.45% to 2.70%. This change is effective March 03, 2022 for most lenders. This means if you have a Variable Rate, your payments will change for your next payment, that or the amount paid to interest will be modified. This depends on the type of Variable rate you have. Who does this affect: This change will affect every borrower with a variable rate mortgage or those wishing to obtain a new Variable Rate mortgage. This change will not change the spread on the variable rate (example Prime Minus 1.0%). The Variable Rate change does not affect Fixed rates. When will the Payment Amount Adjust: For most lenders the payment will adjust on the 2nd regularly scheduled payment following the rate change date. For monthly payments, the April 1st payment in most cases won’t change, but the payment May 1st will reflect the new payment amount. For Weekly payments, assuming payments are on Friday, if you had a payment on Friday March 4th, it would not change, for the payment on Friday March 11th, the payment would reflect the new amount. My opinion on Variable Rates: Although Variable rates have increased, Variable rate mortgages are still really low. You could expect a rate of 1.70% on a new Variable Rate mortgage, possibly lower. This is still quite a bit lower than fixed rates which are pushing the high 2% to low 3% range. So if you have any tolerance to a little risk, then these still might be for you. Further, depending on your circumstances it may be a better option, for example if you were planning to sell and break the mortgage, you would do much better with a variable rate as they are cheaper to get out of then fixed rates. Save the Date: The Bank of Canada is scheduled to meet again on Wednesday April 13, 2022.   Please don’t hesitate to contact me if you would like any additional information or if you are simply in need of any advice with respect to this or anything mortgage related. If you think this information could help out a friend or a family member, I would really appreciate it if you would forward this email or provide them with my contact information. I will look after them as if they were a friend or family member to myself.

Book a Virtual Meeting Now!!

Phone / Text 403-828-1838 Email: mortgages@shawnmooney.com Website: www.shawnmooney.com

Some conditions may apply. Rates are subject to change. Subject to lender / insurer approval.

Tax Season is Upon Us

 

Tax Season is Upon Us Hello Shawn Are you self employed and are planning to purchase or refinance a house this year? If you are, then you should get in touch with me prior to filing your taxes. I can help you figure out the amount of income you will need for either refinancing or purchasing a house so you will be in the best possible situation. Failing to do so could cause you not to qualify. Tax season is upon us. Do you owe revenue Canada money? Did you know that if you do it is income tax arrears so there fore penalized? Revenue Canada expects you to have your taxes paid in full prior to the tax deadline by paying installments on you own if you are self employed or having it deducted from your income if employed by an employer. As such if you are refinancing your house, you are not allowed to pay revenue Canada from the proceeds. Also, if you are buying a house these will be required to be paid off in full prior to closing on a new house purchase. Even if you are on a payment plan with revenue Canada it won’t matter to the lender. If you have an upcoming mortgage renewal, even if a few years away you should start considering dealing with this sooner than later. If you don’t when your mortgage comes up for renewal you won’t have the ability to shop around or negotiate. That said, I do have lenders that understand and are willing to help. Both my alternative lenders and my private lenders are willing to help pay off this debt if you have sufficient equity in your house. I have several strategies I implement depending on your specific situation to help. So, if you have revenue Canada debt and you are unsure as to what to do contact me. I would be happy to help you find a solution if I can. If you think this information could help out a friend or a family member, I would really appreciate it if you would forward this email or provide them with my contact information. I will look after them as if they were a friend or family member to myself. Book a Virtual Meeting Now!! Phone / Text 403-828-1838 Email: mortgages@shawnmooney.com Website: www.shawnmooney.com Some conditions may apply. Rates are subject to change. Subject to lender / insurer approval. Copyright (C) 2022 Bayfield Mortgage Professionals Ltd.. All rights reserved. You are receiving this email because you opted in at our website or you opted in over the phone. Our mailing address is: Bayfield Mortgage Professionals Ltd. 67 Coopersfield Park SW Airdrie, Alberta T4B4K8 Canada Add us to your address book Want to change how you receive these emails? You can update your preferences or unsubscribe

Mortgage Rate Update | 14-Aug-17

MORTGAGE RATE UPDATE

Shawn Mooney | Mortgage Broker Bayfield Mortgage Professionals Ltd. Ph.# 403-945-8769 Mobile # 403-828-1838 Email:mortgages@shawnmooney.com Web: www.shawnmooney.com Your Mortgage Broker for Life!!! Please check out my House Purchasing Guide Here!! *Denotes Change in Rate**Rates subject to change without notice.  Some conditions apply.  O.A.C.  Rates could be customized maturity and must close by a certain date.  Contact me for the best rate for you!!

Do you have any friends, family or colleagues that you feel could benefit from any of the services I offer?  Do you know anybody who would benefit from the information provided?  If so, I would appreciate it if you would share this email, pass it around.  Thanks so much.  Forward to a Friend Copyright © 2017 Bayfield Mortgage Professionals Ltd., All rights reserved. I have received an email from you at some point. Please unsubscribe if wish not to receive my emails. Our mailing address is: Bayfield Mortgage Professionals Ltd. 521 Windstone Common SW Airdrie, Alberta T4B3R7 Canada Add us to your address book Want to change how you receive these emails? You can update your preferences or unsubscribe from this list