Fragility to stay as bank keeps rates at historic lows

December 16th, 2009 No comments

OTTAWA–Citing weaker-than-expected growth in the July-to-September period, the Bank of Canada on Tuesday left its overnight rate unchanged at 0.25 per cent.

In the wake of that announcement, TD Bank said Canada’s recovery is so fragile; the central bank’s Governor Mark Carney will have to hold the overnight rate at an all-time low until late next year.

That’s several months longer than Carney has previously said the bank would wait to help stimulate business activity.

TD Bank said current trends indicate a return to full economic output will be delayed until the April-through-June period of 2012, six months later than the central bank is predicting.

“As such, we believe that the Bank of Canada will stay put past its conditional commitment of June 2010, and the first rate hike will not come until the fourth quarter of next year,” said Diana Petramala, a TD Bank economist.

Canada emerged from the recession but only just barely, with growth of 0.4 per cent in the July-through-September period. That was considerably less than the central bank’s 2 per cent growth prediction.

Looking ahead, “the main risks are a more protracted global recovery and persistent strength in the Canadian dollar that could act as a significant further drag on growth,” Carney stated.

The next scheduled date for announcing the bank’s overnight rate target is Jan.19.

For more information on bank rates please contact Charmaine

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Bond Yields Up Big

December 8th, 2009 No comments

Bond yields usually rise on good economic news and last week was no different. The 5-year bond yield jumped 0.14% on strong jobs data from both sides of the border.  (Canadian Jobs Report / U.S. Jobs Report)
Canada added 79,100 jobs in November. Traders had expected only 15,000.

With rebounding yields, fixed mortgage rates will probably halt their drop, at least for the time being.  As of now, discounted 5-year fixed rates are just under 4%—well below the approximate 10-year average of 5.36%.
The 5-year yield, which influences fixed mortgage rates, now stands at 2.53%.  It seems to be putting in a floor in the 2.35% to 2.40% range.  It may be tough to penetrate that floor in the near-term without weaker economic news, or some other economic shock.
The Bank of Canada holds its last interest rate meeting of the year on Tuesday. 19 of 19 economists polled by Bloomberg predict no change to the Bank’s 0.25% overnight rate.

Nevertheless, analysts will be watching to see if the BoC surprises the bond market with any optimistic outlooks.
For more market information contact Charmaine

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Canadians Optimistic about the Housing Market

November 23rd, 2009 No comments

Canadians are confident that home values are increasing and are optimistic about local housing markets, the Canadian Association of Accredited Mortgage Professionals said in a report.

An October survey conducted saw citizens reply with an average score of 6.56 out of 10 when asked if this was a good or bad time to buy a home in their community, said the report, released yesterday.

Citizens are also “highly satisfied” with the terms of their mortgages, it said. For those who renewed or refinanced a mortgage in the past 12 months, the average new rate was 1.12 percentage points lower than the previous one.

With interest rates at a low it is a great time to see if it is worth your while to switch to a new rate.

Source: Carla Wilson, Times Colonist

For any information call Charmaine Idzerda at 1.866.824.8057

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Mortgage Renewal Time

November 12th, 2009 No comments

The simple fact of renewals is this: nearly 60% of people sign back renewal letters without even taking the time to see what else is available. As a result, there is little or no incentive for the financial institution to give their best offer. What makes things even more interesting is the fact that renewal letters usually only arrive about two to three weeks before the mortgage is actually up for renewal. This two to three weeks gives you very little time to arrange financing with another lender, or to take advantage of the lower rates that may have occurred in the three to four months before your renewal date.

 

Consumers should be pre-approving their renewals 90-120 days prior to their actual renewal date. This immediately gives you the benefit of the lowest rate on the market for the longest period possible before your renewal date. What makes this better is the fact that this is completely free and without obligation.

 

A mortgage is too big a financial decision to not take seriously.  It makes sense to place your mortgage with the institution that gives you the best rates and service.

Using the services of a mortgage broker who shop’s the market to obtain the best rate and terms makes a lot of sense!

 

For more information about obtaining a mortgage renewal please call Charmaine at Verico Designer Mortgages Inc. Toll Free: 1.866.824.8057

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US Housing Prices May Fall Further

October 29th, 2009 No comments

* TSX -248.21 to 10,805(Reuters) every stock market in the world was down yesterday on doubts about the strength of the US economic recovery. TSX closed to its lowest level in 2 months dipping below the 11,000 pt mark

* DOW -119.48 to 9,762 dipped below 10,000 pts as sales of new US homes fell 3.6% last mth against an expected 2.6% rise

* Dollar -1.08c to 92.72 fell to its lowest level in 3 weeks influenced by a dip in oil prices

* Oil -$2.09 to $77.46US per barrel.

* Gold -$4.80 to $1,034.70USD per ounce

* Canadian 5 yr bond yields -.03bps to 2.70. four weeks ago the yield was 2.57%.  This is the rate that effects the fixed interest rates

* http://www.financialpost.com/markets/market-data/money-yields-can_us.html?tmp=yields-can_us

Article from US Mortgage Brokers Association

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