Yesterday, the bond yields hit their highest levels since January 14th where rates were higher (fixed mortgage rates are determined by bond yields). On January 14, 2014, 5 year fixed rates were in the 3.39% - 3.49% range. Compare that with today's lowest 5 year fixed of 2.84%. This puts SERIOUS upward pressure on fixed mortgage rates. If you haven't locked in a mortgage rate yet, now is a good time to do so without delay.
In addition to the 5 year fixed at 2.84% (for CMHC insured mortgages only - 2.89% for conventional), there is also a 3 year fixed at 2.49%, which is a great product and is also a great alternative to variable for those unsure. The lowest variable rate is prime -0.65% (2.35%), so the fixed is only 0.14% higher. A single increase, and you are behind on rate. At the end of three years, THEN take a look at variable again to see if there are better options at that time. It's a solid plan.
If you have a mortgage closing coming up, or are just starting to shop for a home, get a mortgage rate locked up as soon as you can to ensure you get the lowest rate possible.
Please visit www.easy123mortgage.ca for more information!
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Thursday 3 April 2014
Friday 28 February 2014
CMHC to raise mortgage insurance premiums
CMHC (Canadian Mortgage and Housing Corporation) announced today that
they will be raising their premiums effective May 1st, 2014.
This does not affect current homeowners, only those who will be purchasing with less than 20% down payment.
Here is the link to the article: http://business.financialpost.com/2014/02/28/cmhc-mortgage-premiums/
The article doesn't state the percentage they will increase it, only that it will cost the average homebuyer requiring the insurance approximately $5 more per month. It sounds like this will result in an increase of between 0.25% and 0.50% to me. Currently, the premium with 5% down payment is 2.75%.
I think it is very unlikely this will have any impact on the real estate market and it is still expected that we will have a strong 2014.
For those looking to purchase and get in ahead of the increase, you will need to have your new mortgage set up prior to May 1st. This means anyone who has not made a decision on a property will need to do so by this time. The race is on!
This does not affect current homeowners, only those who will be purchasing with less than 20% down payment.
Here is the link to the article: http://business.financialpost.com/2014/02/28/cmhc-mortgage-premiums/
The article doesn't state the percentage they will increase it, only that it will cost the average homebuyer requiring the insurance approximately $5 more per month. It sounds like this will result in an increase of between 0.25% and 0.50% to me. Currently, the premium with 5% down payment is 2.75%.
I think it is very unlikely this will have any impact on the real estate market and it is still expected that we will have a strong 2014.
For those looking to purchase and get in ahead of the increase, you will need to have your new mortgage set up prior to May 1st. This means anyone who has not made a decision on a property will need to do so by this time. The race is on!
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