Mortgage Rates Slowly Trickle Down

8 weeks ago we had 5 year fixed mortgages at 2.89% and 10 year fixed at 3.69%.
Because of volatility in the Bond Market 5 year rates shot up to 3.59% in a 2 week period. 10 year fixed sits at 3.99%

In the last week I have seen two of the large banks I deal with reduce the 5 year term to 3.39%. No change yet in the 10 year fixed and it remains at 3.99%
I think competition and a softening bond market will allow these fixed rates to ease back, perhaps another 10-20 bps in the next month.
In the meantime the Variable has popped its head up and  could be an attractive alternative at 2.6%

Remember as  Mortgage Broker, my job is to give good advice and provide value when a client asks for the lowest rate. A great product, robust features and a great rate is what I deliver to my clients.

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Toronto Flooding Shuts down some Lenders

Yesterday was a tough day in the Mortgage Business.  Several Lenders were forced to shut down there approval centers because of flooding and power outage issues.
They are getting back to normal today but some still have no power in their buildings.

An unrelated issue also hampered service when Filogix, the software delivery system most banks and brokers use went down for several hours yesterday.
I managed to get 3 new deals approved despite these issues.

Hopefully we will be back to normal later today.

Poor Credit and Difficult to prove Income Mortgages still get good rates

We call these non conforming or B deals.
Example, the bank wont approve you because you have a low Beaon score on your credit and some late payments. Or, you are self employed and don't show enough income.
My B Lenders offer rates for deals like this between 3.70% and 5.00% The average  rate for a 2 year term is about 4.50%. The higher rate offsets the risk the Lender feels they take on with income or credit challenges.

 Not bad when you consider anything under 5% would be thought of as a good rate in the last 10 years.

I usually place clients with these challenges in a 2 year mortgage. The hope is that during this 2 year term, the client will be able to repair their credit or get their 2 years NOAs from their business.
At that point we can move the deal back into an A deal at prime rates.

Bob

5 Year Fixed Mortgage 3.39%

While most banks have raised their 5 year fixed mortgage to 3.59 % or 3.69%,  I have a great lender who is still offering 3.39% and a Line of Credit available for Prime plus .50%

I also have 5 year Variable mortgages at Prime minus .40%  (  2.60%)

In most cases my services and 30 plus years of experience are free to my clients.

Bob

Mortgage Rates are up but Good Deals are still Available

In recent weeks the 5 year fixed mortgage rate has jumped from 2.89% to 3.59%.  This 70 Bps jump will increase the average Burlington mortgage payment by $175.
If this kind of increase continues many believe the healthy market we are seeing will dry up.

I see many clients considering the 4 year term which is still available under 3%. The challenge with choosing this term is most buyers will need to qualify for the mortgage under the Canada Qualifying rate of 5.14%.

Another choice that is regaining popularity is the 5 year Variable mortgage. At Prime minus 40 or 2.60% its looking like a bargain. Like the 4 year term, clients need to qualify at 5.14% .

I think the 5 year rate will fall back as the bond market settles and competition for market share kicks in with the Lenders and the pie shrinks.

Until then, consider these other 2 options and call me for my advice!