Top Calgary Mortgage Broker

Updates to CMHC First Time Buyer Incentive Program

In March the federal government unveiled changes to the budget that included an interesting opportunity for prospective first time home buyers through an enticing program that they called a “shared equity mortgage”. This program could see Canada’s housing agency (CMHC) kicking in up to 10% of the purchase price of a home if certain conditions are met, therefore bringing down the mortgage load and monthly payment for first time home buyers. Read More

inflation and Canadain mortgages

Inflation & Mortgage Interest Rates

Here is the near term expectations of mortgage interest rates. Short version:
  • 5 Year fixed are going up and never getting back down to where they are now.
  • Variables are also great – right now they are Prime – 1% or 2.45% – 1% = 1.45%, and as below, should stay there until 2023! Almost 20 more months!
Both of these are awesome options right now.
Mortgage Mark Herman, Top Calgary Alberta mortgage broker for 1st time home buyers
THE DATA:

Bond traders believe inflation is going to be rising over the coming months and have been demanding increased bond yields.  That has led to increasing interest rates for bonds and, consequently, increasing rates for the fixed-rate mortgages that are funded by those bonds. Read More

2021: here Are Mortgage Rates Going?

This is the million-dollar question.

With so much unknown in our economy and real estate markets, there is one sure thing – interest rates are on the move upwards. BUT, this is only fixed rates.

Variable rates remain at all-time lows. Fixed rates have increased by approximately 30bps (.30%) over the last couple of weeks.

Why is it that only fixed rates are increasing? Fixed rates are based on the bond yield market. As bond yields increase, eventually, so do the fixed rates. There has been pressure building in the bond yield market for awhile now and it was only a matter of time. Whereas, variable rates are dictated by the Bank of Canada (BOC) and based on many things including the health of our economy and consumer debt load coupled with what upside/downside there would be if they change the prime lending rate – currently set at 2.45%.

Variable rates are holding firm and we’ve been told publicly from the BOC that they won’t look at the increase until 2023.

What does that mean for variable rates?

Variable-rate discounts remain low and so does the prime lending rate of 2.45%. When you factor in the low discounts with the low prime lending rate, variable rates are very, very attractive. If we believe the BOC, the prime lending rate of 2.45% will remain the same until 2023 but the discount from lenders may change. If you have a current variable rate mortgage you are good, your discount is locked in.

Currently, the BOC prime lending rate is 2.45%. If you have a variable rate mortgage, you either have a discount or premium added to this rate. Ie. Prime (2.45%) – 1% (discount rate) = 1.45%. If you have a premium added to that prime rate then we really need to talk because there is an opportunity to save some money.

As the BOC moves the prime lending rate of 2.45%, your discount stays locked in for the term (typically 5 years). So if the prime lending rate moves to 2.70% and your variable discount is 1%, your new interest rate is 1.70%.

If you want to secure a fixed rate before they increase even more, please reach out to lock in a rate hold.

If you want to see if we can save you money on your current variable rate mortgage, please let me know and I’ll run some numbers.

Either way, we as Canadians are in a great spot from a mortgage rate perspective. Money is still cheap and it will be for the foreseeable future.

Please let me know if I can help in any way.

Mortgage Mark Herman

403-681-4376

$47,000 Payout Penalty

“Talk to a mortgage broker before you get a mortgage; even if it is at your own bank” says Mark Herman, Top Calgary mortgage broker.

In this case the bank loved this guy’s money, and did not listen to what he wanted. Now he has a $47,000 payout penalty. Read More

CIBC mortgage penalties: “UNFAIR”

We always focus on the Terms and Conditions of the mortgage. Most people have no idea what the bank is talking about when they sign the mortgage. We DO as we do this every day.

Here is a link from a Canadian Law website about a CLASS ACTION LAW SUIT against CIBC for calculating their payout penalties incorrectly: https://canliiconnects.org/en/commentaries/66074 Read More

10 Pro Tips to Keep Your Credit Score as High as Possible

Inside data on maxing your credit score – 10 tips

It can be tough to optimize your credit score when you don’t even know what it is? The answer is by focusing more on your overall “credit hygiene” rather than on any one particular score.

Dental hygiene is preventative maintenance to ensure your teeth and gums are the best they can be at all times. Having a similar routine for your personal credit history can be equally important to avoid problems when you least need them—like when buying or refinancing a home. Read More

The Virus & Deferring: Another reason not to have your mortgage at your bank

Another reason not to have your mortgage at your main bank…
Many home owners have all their banking in one place for convenience but this is another “trap.” If everything is at your favorite bank, they can see:

  • from your pay deposits if you are still working, or are receiving EI payments.
  • what your debts and minimum payments are,
  • your savings & checking balances, what your Line-of-credit is, and your credit score.
  • they know the value of your home and the mortgage amount.
  • Read More