Tuesday, July 21, 2009

Bank of Canada Announcement on Interest Rates

This is the latest news

The Bank of Canada announced this morning that they are maintaining the overnight rate target at .25%; and have confirmed their conditional commitment to hold the current rate policy until June 2010. The full announcement can be viewed at:

http://www.bank-banque-canada.ca/en/fixed-dates/2009/rate_210709.html

Several lenders have made adjustments on their variable rate pricing. We've seen the pricing variance change from prime 'less' to prime 'plus' in the last year.

Currently the movement has been to reduce the variance from Prime plus .60% to rates as low as Prime plus .30%.

Did you know.....for large mortgages most of the schedule A banks have limits on maximum mortgage amounts, especially if the mortgage is not insured?

Typically, a sliding scale is used to determine the maximum lending amount. For example: 80% of first $750,000 and 50% of balance (the scale varies by lender).

In the case of a $1Million purchase price - the maximum mortgage allowed would be $725,000 versus $800,000 financing available with a 20% down payment (conventional mortgage)

There are lenders, offering very competitive interest rates, who will allow up to 80% financing with a maximum mortgage amount of $1.5 million (on purchase of $1,875,000). This is available, to qualified borrowers, without requiring CMHC insurance. These are unique situations - if you require this type of financing, please contact me.

Thanks and have a great day!

Mark

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