Wednesday, October 14, 2009

Fixed Rate Are Going Up!

You may wish to lock in your mortgage now and enjoy the great rates that are available

Fixed Mortgage Rates Are Going Up!


Major banks like RBC have already increased their 4 and 5 year fixed rates by .35%.

And other banks will follow the same steps in the coming days due to the increase in the 5 year bond yield.

There's now a much higher probability we won't see today's insanely low fixed rates again for a while.

Many mortgage companies have Fixed Rates that are still low, its a good time for you to do pre-approval and to hold the rate before it goes up.

Here's an example of a current rate sheet.

Variable rate at Prime minus .10%= 2.15%
5 year fixed at 3.79%
4 year fixed at 3.59%
3 year fixed at 3.39%


WHY IS FIXED RATE GOING UP?
The 5-year bond yield is soaring over 23 basis points, to 2.81%! It's the biggest jump in bond rates in over a year and it comes on top of strong gains over the previous few days.
The yield is now near an 11-month high, and that means fixed mortgage rate increases are around the corner.

What's behind all this?
Today's positive employment report
is the big driver. It caught the bond market totally off guard.

Here's what analysts are saying:


National Bank: "With the recession over in the labour market and the biggest decrease in the unemployment rate since November 2005, our call for a rate increase by the Bank of Canada in the first quarter of 2010 remains on track." (Globe)

Scotiabank: "...It will feed growth prospects and inflation fears and raise market concerns regarding the BoC's conditional rate commitment." (National Post)

RBC Economics: "...At 8.4% the unemployment still implies considerable slack in this economy. This provides reason for the Bank to maintain its commitment to a 0.25% policy rate until mid-2010." (National Post)

TD Securities: "We believe that it will certainly lead the Bank of Canada to focus on the timing of future interest rate increases set out in its conditional commitment to hold interest rates at the current level until Q2 2010. Nonetheless, while for now we continue to expect the policy rate to remain unchanged until Q4 2010, we think that the risks of an earlier move have increased dramatically." (Globe)


I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

(
BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

Tuesday, October 13, 2009

Fixed mortgage rates about to increase

Hello,

Here is another perspective and reason for the mortgage rate increases.

Happy Thanksgiving!
Mark



We have seen some significant increases to bond yields recently with jumps to over 30 basis points (0.30%). Fixed mortgage rates and bond yields are very closely related, so it is very likely we will see some hikes to fixed mortgage rates very soon (if not Tuesday). RBC has already increased their 5 year fixed mortgage rates by 35 basis points and it is likely that we will see other mortgage lenders following suit.


If you have not yet locked in a mortgage rate then you might want to now and ensure you get the lowest rate possible (which of course also affects the maximum mortgage they qualify for).



Lowest rates as of today:


1 year 2.55%
2 year 2.90%
3 year 3.39%
4 year 3.85%
5 year 3.69% (no rate holds, 30 day quick close)
5 year 3.99% (regular 120 day rate hold)
5 year ARM 2.25% (prime)

I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

(
BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

Monday, October 12, 2009

Downsizing: The Rising Wave in Real Estate

I received this email today and thought I would share some of the thoughts that people have with regards to our local real estate market, the real estate market in Canada and what is happening with the 'baby boomers' in the next decade. It's an interesting set of statistics.
I love the bottom of their email where they talk about the 10 reasons to downsize, I think that 8 of the 10 reasons are either true or apply in my case, but I'm not going anywhere yet! It's a little doom and gloom, Garth Turner like, but interesting perspective and thought I would share it with you.
Enjoy!
Mark


Did you know?
  • 22% of Canadians expect their home to be a primary source of retirement income
  • 31% of home sales in Canada this past summer were attributable to downsizing
  • 60% of Baby Boomers expect to downsize in the next 10 years
Downsizing is a significant and growing segment of the real estate market.

As homeowners approach or enter retirement many of them need to capture the equity value of their family home. These homeowners face a growing risk of seeing their value decline in the coming years as:
  • interest rates rise
  • the number of family home buyers decreases
  • the number of family home sellers increases

Here are some of the areas covered:
  • Home prices in the GTA - history, trends, predictions
  • Demographic trends and their impact
  • Affordability - history, trends, predictions
  • Downsizing Case Studies
  • The Keys to Retirement Income - Security, Potential, Flexibility

TOP TEN REASONS TO DOWNSIZE IN THE NEXT YEAR

10. There are rooms in your home that you haven’t been in for more than a year

9. Home prices are good now but will likely decline when interest rates rise

8. You can't remember what’s in the boxes in the basement/garage

7. Affordability has never been better and there are a lot of potential buyers out there

6. You are paying to heat/cool/clean at least twice the space you actually need

5. Home prices have risen for 13 consecutive years ... is it time to lock up your gains?

4. Your home equity can earn Guaranteed Income Growth of 7% each year before retirement including 2009!

3. It took more than 12 years for home prices to recover after the last "peak" in 1989

2. The home equity you free up can generate Guaranteed Income for Life with upside potential

And the #1 Reason to Downsize in the next year:

Your “30 something” kids won’t be able to move back in with you!

Sunday, October 11, 2009

Dow Jones Closed at highest level in a year

Dow Jones closed highest in a year!
Things are looking up!

Friday, October 09, 2009

5 year mortgage interest rates increasing

RBC announced today that they are increasing their 5 year mortgage interest rate to 5.84% up 35 points from 5.49%. RBC said it would be effective tomorrow, Saturday the 10th of October

It may be a good time to lock in for those that don't want to gamble with rates

My philosophy is the same, go short! Read more about that here:

http://www.mississauga4sale.com/Lock-In-Short-Term-Long-Term-Mortgage.htm

Short or Long term Mortgage, what is best for you?

All the best and Happy Thanksgiving!
Mark

GTA "Hot" housing market expected to cool by November

This is an interesting perspective. Our local GTA marketplace is very hot right now, not too many listings on the market compared to previous months.
Below is an article summing up our real estate market that I thought was definitely worth passing along:


Hot housing market expected to cool by November

Reuters
TORONTO -- Low financing costs and pent-up demand helped restore Canadian existing home sales to pre-recession levels, but the red-hot pace will likely peter out before the year is out, a report showed on Wednesday.

The Bank of Canada lowered rates to an all-time low with an aim to cushion the Canadian economy from external shocks. Instead, this aggressive easing has "proved to be more of a trampoline for resale housing markets," Toronto-Dominion Bank economist Pascal Gauthier said.

As of August, 50-60% of pent-up demand has been absorbed, and if the current pace persists, the demand will dry up by November, TD estimated in its Resale Housing Market Outlook. A sharp shift in consumer confidence has contributed to the rebound, combining with low and favourable interest rates that made home ownership affordable for many Canadians.

Between 45,000 and 53,000 potential sales late last year failed to materialize because consumer confidence froze up during the worst of the global financial crisis, TD estimated.

No other Canadian economic indicator in the past few months has recovered as strongly, and in fact, home sales have now exceeded pre-recession levels and matched the lofty volumes of 2007, TD said.

"After plummeting by nearly a third in the second half of last year, the seasonally-adjusted level of sales had climbed back by 61% as of August," the report said.

Overall, TD estimates national existing home sales will rise 2.4% to 445,000 units in 2009 from a year earlier, with the average price climbing 2.1% to $310,000. In 2010, sales are seen rising 2.2% to 455,000 units, while prices jump 5%. But in 2011, TD projects eroding affordability will dampen sales but the average price will still add a modest 2%.

TD also looked at nine Canadian cities and their prospects for existing home sales. All cities coast-to-coast were forecast to show gains from this year to 2010, but then retreat the following year.

On Tuesday, TD released a report that suggested the Bank of Canada could raise interest rates sooner and more aggressively than forecast if real estate strength did not cool.

I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

Thursday, October 08, 2009

5 year Variable rate at 2.25%

Interest rates are dropping again. The Variable Interest Rate Mortgage (VIRM) is about prime from prime +.8% so this is good news.
Here are some rates
5 year Variable rate at 2.25%
Fixed rate:
1 year 2.70%
2 year 3.05%
3 year 3.55%
4 year 3.59%
5 year 3.84%
Up to 12 Months rate hold at 4.49% for 5 years fixed
some banks such as CIBC current offers:
Zero Down Payment available with 5% cashback
$500 cashback for First Time Home Buyer
Free appraisal

I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

(
BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

Monday, October 05, 2009

TREB reports SEPTEMBER RESALE MARKET FIGURES

These are the figures from September 2009, prices and sales were both up compared to same month last year.

GTA REALTORS® REPORTING SEPTEMBER RESALE MARKET FIGURES TORONTO, October 5, 2009

-

In September 2009, Greater Toronto REALTORS® reported 8,196 sales, up 28 per cent from September 2008. The average price for September transactions was $406,877 – up by 10 per cent compared to the same month last year.

"We have experienced an increasing rate of existing home price growth in the GTA as sales have continued to outpace 2008 results," said TREB President Tom Lebour. "Consumers have remained confident in ownership housing as a long-term investment."

Year-to-date sales, at 66,437 were up 4.5 per cent compared to the first nine months of 2008.

Average price, at $388,417 was up by almost 1.5 per cent.

"Existing home sales will finish strong this year, pushing through the 80,000 mark and moving in line with some of the best years on record under the current TREB market area," according to Jason Mercer, TREB's Senior Manager of Market Analysis.

I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

(
BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : Mississauga4Sale.com

Friday, October 02, 2009

The Tide has Turned AGAIN for variable rate mortgages

The Tide has turned - again. As it "normally" and eventually does. All things seem to go in cycles, if you are my age or older, 51+ you will agree with me.... Read more about cycles here

Variable rate mortgages have been at Prime Rate plus about .5% to .75% now for about 2 years or so. Just this week, some lenders have changed their price variance on variable rate mortgages and we are now back to Prime MINUS mortgages. This is great news for people like me who have mortgages that are prime minus and may be renewing in the next few months.

I've written about this in the past

http://www.mississauga4sale.com/blog/2008/04/variable-rate-versus-fixed-rate.html

and

http://www.mississauga4sale.com/Lock-In-Short-Term-Long-Term-Mortgage.htm

I have seen mortgage companies offer offer clients a 3 yr term at Prime less .10% and I have 4 & 5 yr terms at Prime.

Many predict the pricing variance may drop further but most don't think it will go as low as last year's Prime less .60%.

Current "BEST" Oct 1st 2009*

Prime...........2.25%

Fixed rates:
1 yr...............2.45%
2 yr...............2.90%
3 yr...............3.34%
4 yr...............3.74%
5 yr...............3.84%
7 yr...............5.30%
10 yr.............5.40%

Variable rates:
3 yr................Prime less .10%
4 yr................Prime
5 yr................Prime
*rates subject to change without notice

Let me know if you have any questions...enjoy the weekend!
Mark

Good news: Both fixed rates and variable rates dropped again

Good morning,
The lowest 5-year fixed rate is 3.65%. The 5-year variable rate is at Prime. 3-year variable rate is also at Prime (2.25%) now.

4-year variable @P-0.05% (2.20%) or P-0.20% first year and P for the next 3 years. Your sale must be closed within 45 days.

Great fixed rate option is: 3-year fixed @3.39%.

Not sure about fixed or variable, why not try 50/50 wise mortgage. That means 50% of mortgage is fixed rate and the other 50% is variable rate. The effective 5-year rate is 3.22% right now.

Please let me know if you need more information.

Have a great weekend!
Mark