Bank of Canada Interest Rate Announcement: April 16, 2014

Interest Rate Annoucement

For the 29th consecutive announcement in a row, the Bank of Canada (BoC) has revealed that the overnight lending rate will remain at 1 per cent – a position its held since September 2010.

The overnight lending rate – which is the interest rate at which banks lend money to one another – is expected to remain unchanged until mid-2015; that would mark nearly five years at 1 per cent, which would be the longest span of inactivity in more than 60 years. This is good news for variable rate mortgage holders whose rates are attached to Prime, as an increase to the overnight lending rate could result in an increase to some lenders’ Prime rates and, therefore, variable mortgage rates. Continue reading

Is a 3-Year Variable Rate Mortgage Term Right For You?


Flickr: nerdcoregirl

Two of the biggest decisions you’ll need to make regarding your mortgage financing are which mortgage rate type and mortgage term you want. Would you prefer a fixed or variable mortgage rate? And how long do you want to commit to that rate for? Each combination makes sense for different reasons, and the decision is usually personal. To get some insight, we decided to interview homeowners across the country, to see which rate types and terms they chose and why. Today, let’s look at what a 3-year variable rate is and who is choosing it.

Continue reading

Save Money on Your Mortgage Using the Three-Legged Stool Method

three-legged stool

Flickr: D68 design+art

With today’s record breaking housing prices, homebuyers are taking out larger mortgages than ever before. With larger mortgages comes higher mortgage payment amounts and added interest costs, so the incentive to save money wherever possible is high. If you’re wondering what the most effective way to save money on your mortgage is, there’s more than one answer – and I want you to use all of them. Keep reading to find out what I mean.

Factors That Affect the Cost of Your Mortgage

There are three major factors that will affect how expensive your mortgage is over time:

  1. The principal or mortgage amount,
  2. The mortgage rate, and
  3. The amortization period.

These three factors are like the legs of a stool – holding up the cost of your mortgage. Continue reading

Monthly Mortgage Update: April 2014

Kerri-Lynn McAllister

It’s spring (despite what Mother Nature says) and that means it’s time for another round of mortgage rate wars. But before the Bank of Montreal (BMO) had the chance to unveil its controversial 2.99% rate again, Finance Minister Jim Flaherty called it quits.

Flaherty was infamous for a phone call he made to BMO last spring, urging the bank to practice more “responsible lending” following the 2.99% release. So, now it’s up to new Finance Minister Joe Oliver to man the phones.

Rate wars are on, but are all rates created equal?

The Bank of Montreal has set a precedent, by springing (pun intended) its 2.99% 5-year fixed mortgage rate for the third season since 2012. Other Ontario credit unions, such as Meridian and Alterna Savings, have also dropped their rates to similar offerings – 2.95% and 2.98% respectively. And the 5-year rates on have hovered between 2.84% and 2.94% for the last week. Continue reading

Want to Buy a Brand New Home? Find the Price Trends of What’s Going Up in Your City

tate vancouver downtown

When you start shopping around for a home, one of the first decisions you’ll need to make is whether you want to buy something new, or something that’s been owned and lived in before (also known as a resale home). The idea of buying a brand new home – one that’s never been touched, let alone lived in – sounds ideal for some. But the question on most people’s minds is: What can I actually afford to buy?

Once you’ve been pre-approved for a mortgage, you’ll know what budget you’re working with. For example, if you’ve been pre-approved for a $500,000 mortgage, you can start looking at new homes listed for up to that amount. But where exactly are the homes in your price range being built? And what can you get for that price? There’s a new online, map-based tool that can help you find out. Continue reading