Best 5 Year Mortgage Rate

Happy New Year

What a great way to start the New Year with a 5 year fixed Mortgage at 3.29%  *



Variable Mortgages available as low as 2.50%  *




  *   some conditions apply and rates are subject to change.

NEW YEAR Mortgage predictions

Here are my predictions fro 2014

Mortgage Rates

Fixed rates will drop due to competition within the Lenders for Market Share and a recovering Stock Market. The Bond Market should allow 5 Year Fixed rates to land around the 3.19% level by March this year.

I predict the Back of Canada Rate will be stable at least until July this year and the 3.00 % Prime rate
will hold. Later this year we might see a .25% jump.

Lending Policies

I see further tightening by the government by way of Bill 20/21 this time focusing on the insurers.  Lenders will have to do more due diligence on Self Employed files and more focus on the property itself.

Auto Appraisals.

Many Lenders use Auto Appraisal systems instead of Appraisals.  I see a tightening and more full appraisals being requested. Wait times could be as much as 3-5 days as Appraisers find it hard to keep up with the demands.

As always, I suggest using a Mortgage Broker for your purchase or refinance. You get access to many products and Lenders. Theses days, everyone needs advice and experience behind them to get the best deal and the job done.

Mortgages for Rental Properties

Several years ago, it was fairly easy to obtain a mortgage to purchase a rental property.

If the rent carried the mortgage, taxes and condo fee's if applicable your would probably get approved for up to 80% financing.

That's changed is recent years. Now lenders are looking for Debt Servicing.  example.
A client needs to be able to carry their own home and the rental property against there own income and 50% of the rental property income.  The Total debt cant exceed 42% of the total income.
This is difficult for many investors and pretty much impossible if you own 2 rental properties.

One solution is to use a non bank lender that has different risk models and uses different underwriting calculations. I have access to these lenders.  You might pay a slightly higher rate but don't forget its all tax deductible if the property is for investment.

Getting preapproved for rental purchases is often overlooked and yet this type of mortgage financing has been tightened up almost as much as self employed deals.
Get preapproved and try to avoid properties with heavy taxes and condo fee's

If you own a Rental property or plan to purchase one or two give me a call to see what you can borrow.

Exclusive Mortgage Offers

I just finished a conference call with our Head Office.

We discussed our Exclusive offer not available from other Banks or Mortgage Brokers.

Mortgage Centre Canada is now offering a 5 Year Term at 3.49% .

This rate is .20 below other Banks and Lenders.

This offer is for clean deals, owner occupied, good credit.

Bank Mortgage Approval Turnaround Time

I spoke with a former co-worker today who sells mortgage at a major bank.

He was quite upset that his approval centre is running about 4 days right now.
he is losing deals to other bankers and the Broker industry because of this service.

At the same bank, I get a maximum 2 day turnaround and most times even faster. Also I have 4 dedicated
underwriters to work with which gives me a familiarity and my old friend has no idea who his deal will go with at any time.

In the broker world we are treated like a preferred customer so that the Lender can win our business every time.

Another reason to work with an experienced Mortgage Broker

5 Year Mortgage Best Rate

Our company has been given access to a special 5 Year Fixed Mortgage Rate.

3.49%

This rate is well below the best rate offered by several major lenders.

5 year Variable is also available at 2.50%

Best Rates Best Service Best Advice

Self Employed Clients

Some Brokers and Bank reps say its more difficult to finance Self Employed  clients.

I would agree that there is more work involved but fundamentally nothing has changed.

Being prepared and understanding the Lenders Polices and paperwork will still get you up to 75% financing. You need your NOAs and T1 Generals right up front.  A 2 year average income will be used.

We also have the B Lenders who will do these deals for a higher rate to compensate for the perceived risk of no income proof.  You can get up to 80% financing here.

As always use an experienced Broker to get the best results

5 Year Rate Starts to Drop

As I predicted, the first of many Lenders has announced a small but promising reduction in its Fixed 5 year mortgage rate.

Merix has reduced its 5 year Genworth Insured mortgage to 3.64% from 3.69%

I predict because of the 5 year bond rate dropping to August levels rates may drop more in the near future.

In the meantime, the Variable at 2.60% and 2 year and 3 year mortgages at 2.99% and 3.19% are still attractive

Use an experienced Mortgage Broker and get the best advice, service and rates.

Mortgage Rates Soar

The 5 year term has gone up again this week reaching as high as 3.79%. This is an 90 point jump since July. The average mortgage payment in Burlington is up about $225.00 a month.
 What are the Alternatives?
Shop around, I still have some Lenders at 3.59%.

Another good Alternative is the Variable mortgage which has become popular again. Prime minus . 40 gives you a rate of 2.60%.
The risks are an increase in the Bank of Canada rate and you need to qualify at the Canadian qualifying rate of 5.49%.  I think its a good choice for qualifying clients.

Lastly choose a shorter term like a 2 Year at 2.99%

Overall, I think the rates will fall again as the Bond settles down and greed for market share amongst the lenders forces more competition.

5 Year Term not the only Choice

With the rapid increase in 5 Year fixed mortgage rates, other choices have become interesting to the consumer.
Since this weeks hike, 5 year terms run between 3.49% and 3.79% depending on the Lender.

The Variable mortgage seems to have come back into favour.  Bank Prime of 3.00% less a discount of .40 give the client a rate of 2.60% and no Bank of Canada hike in sight and the client can lock in at anytime.

7 Year terms at 3.89% and 4 year terms at 3.24% are interesting alternatives as well.

As always, I spend time with my clients explaining the different terms and the Pro and cons for each.

Mortgage Rates Rising Again

If you are a Realtor, get your clients pre approved as soon as possible. Rate are rising again this week.
Several of our non bank Lenders have advised us they are going up by 10 or 20 bps tonight at midnight. No word from the major banks.
Getting pre approved can save your clients a rate for up to 120 days.

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.

Hiring Experienced Mortgage Agents

Our Brokerage has openings for Experienced Mortgage Agents who have least 2-3 years in the business. Similar Bank experience as a Mortgage rep would be suitable.

We offer access to Canada's top lenders. Status with the major A Lenders resulting in top tier commissions and dedicated Underwriters.
Top commission splits available to strong volume producers.
Work with a experienced Principal Broker who sells actively and understands the market
Mortgage Centre Canada is an Iconic brand in the Canadian Mortgage space.
Access to a Free CRM program
Access to Benefits
Access to Commercial lending
Access to Equipment Leasing products
Access to a White Label product
Mentoring and Coaching available

Contact Bob at beach.b@mortgagecentre.com

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!

MORTGAGE RATES CONTINUE TO CLIMB

How high will they go? It depends on the Bond market and the 5 year Canadian bond yield.

The best 5 year has gone from 2.89% to 3.39% in only 3 weeks.
This is happending because of the turmoil in the US surrounding the government possibly cutting the
economic stimulous program. The bond prices have gone up as a result and Mortgages are funded by bonds.

This happened 3 years ago and rates went from the low 3.29% range to as high as 4.89%.
They did trickle back down over a 6 month period.
My advice is to work through a broker and get a rate set through pre approval to hold todays current rates.This will stop the bleading.

I think these rates a nearing a peak and clients serious about buying a home or refinancing should be prepared to shop hard or use a broker. There are still some great deals out there. If rates drop in the next 90-120 days, the client will get the lower rate provided they haven't closed their deal.

Another Rate Hike

Hold onto your hats, rates are rising again tonight at midnight.
Several Banks and other mortgage lenders have anounced another increase in the 5 year fixed term.
Most companies will charge 3.19% for a 5 year mortgage tomorrow.

Thats why I preach pre approval all the time.
2 weeks ago we had 5 year money at several lenders prices at 2.89% and a rate guaranteed for 120 days.

On an average mortgage in Burlington, this increase of 30 bps can cost up to $75.00 a month.

Hopefulyl the Bond market will settle down and allow competition amongst the banks to draw the rate below 3% again.

Rental Property Financing

Five years ago, it wasn't difficult to get 80% financing for a Rental Property. These days you really need the help of an expert like me to maneuver  through the policies and models banks use.

My best advice is to be prepared to put 25% down and try to find properties that have at least a 1.10% Debt Service Coverage.

Confused? Don't worry its not that difficult to explain once we talk. Thats my job

Some Lenders surcharge the rate as well. 2.89% 5 year can quickly climb to 3.34% if you dont find the right Lender.

My preferred Lender does rentals at 2.89% and 75% financing for good applications.

As always, get pre approved before you offer and remember what I always say.
Its never been a more important time to have a Mortgage Broker relationship.