Inverted Yield Curves, Impacts on Prime Rate Changes and Variable Rate Mortgages

Summary:

For the 2nd time in 50 years the “Yield Curve” has inverted – meaning that long term rates are now lower than short term rates. This can signal a recession is on the way.

This Means …

  1. Alberta will look better comparatively to Canada’s hot housing markets which should finally cool down.
  2. Canada’s Prime rate increases look to be on hold until Spring. This makes the variable rates now look MUCH Better. There were 3 rate increases expected and these may not materialize – making the VARIABLE rate look better.
  3. Broker lender’s have VARIABLE rates that range between .1% and .65% BETTER than the banks do. If you are looking at variable rates we should look further into this in more detail.

DATA BELOW …

  1. More on the predictions on rate increases
  2. WTF is an inverted Yield Curve – lifted from “the Hustle”

 

  1. Predictions on Prime

Three interest rate hikes in 2019 — that’s what economists have been predicting for months, as part of the Bank of Canada’s ongoing strategy to keep the country’s inflation levels in check. But, according to one economist, that plan may have changed.

The BoC held the overnight rate at 1.75 percent yesterday, and released a statement a senior economist at TD, believes hints that the next hike may not come until next spring.

“We no longer expect the Bank of Canada to hike its policy interest rate in January,” he writes, in a recent note examining the BoC’s decision. “Spring 2019 now appears to be the more likely timing.”

Meanwhile the Canadian rates and macro strategist at BMO, puts the odds of a rate hike in January at 50 percent.

“While the Bank reiterated its desire to get policy rates to neutral, the path to neutral is clearly more uncertain than just a couple of months ago,” he writes, in his most recent note. “Looking ahead to January, the BoC will likely need to be convinced to hike (rather than not).”

A VIDEO ON WHY VARIABLE RATE MAY BE THE WAY TO GO FOR YOUR PLANS

  • https://vimeo.com/279581066
  • This video is from my colleague Dustin Woodhouse and he perfectly presents the story on the variable. He also ONLY works in the BC Lower Mainland; if you live there HE should be doing your mortgage, if you don’t WE should be.

2.      WTF is an ‘inverted yield curve,’ and what does it mean for the economy?

For the first time since 2007, the 2- to 5-year US Treasury yield curve has inverted. Historically, this has served as a somewhat reliable indicator of economic downturn, which means people are freaking out, which means…

OK, hold up: What exactly is a yield curve, and why is it inverting?

‘Lend long and prosper’ (so say the banks)

In short, a yield curve is a way to gauge the difference between interest rates and the return investors will get from buying shorter- or longer-term debt. Most of the time, banks demand higher interest for longer periods of time (cuz who knows when they’re gonna see that money again?!).

A yield curve goes flat when the premium for longer-term bonds drops to zero. If the spread turns negative (meaning shorter-term yields are higher than longer maturity debt), the curve is inverted

Which is what is happening now

So what caused this? It’s hard to say — but we prefer this explanation: Since December 2015, the Fed has implemented a series of 6 interest rate hikes and simultaneously cut its balance sheet by $50B a month.

According to Forbes, the Fed has played a major part in suppressing long-term interest rates while raising short-term interest rates.

Yield curve + inversion = economic downturn (sometimes)

The data don’t lie. A yield curve inversion preceded both the first tech bubble and the 2008 market crash.

Though, this theory has had some notable “false positives” in its lifetime — so it’s not exactly a foolproof fortune teller.

Heck, IBM found the size of high heels tends to spike during hard times. As of now, the experts who believe the sky to be falling remain in the minority.

 

There is lots to digest in the data above. Please feel free to contact me to discuss in more detail.

Mark Herman, 403-681-4376

Top Calgary Alberta Mortgage Broker

 

Should you look at 7 and 10 year terms?

With rates on the rise, is it worth a 2nd look at longer term mortgages?

Data:

  • Rates have substantially increased over the last 6 of months. We have seen 3 prime rate increases with more on the horizon.
  • Fixed rate mortgages have also followed suit due to bond market instability and the increases are noticeable.
  • Consumer sentiment has rapidly moved from Variables rates to longer term Fixed rates of 5, 7, and 10 years.

The long-term trend for rates is up!

The advantage of Fixed rates is that they provide clients with added security and stability against this recent storm of volatility. This storm doesn’t seem to have an end in sight either with many questions still to be answered in the coming months. When will bond rates stabilize?  Will global pressures continue to drive increases?  Will we see a return to historical norms? What will be the impact of recent events on the Canadian economy?

Some clients are more concerned with rate trends these days it’s with good reason. Perhaps the interim answer to all this instability and volatility is to start looking long “term”. 7 & 10 year terms to be specific.

Longer term mortgages like a 7 & 10 year term help insulate clients against potential increases in the short to long-term as well as provide safety and consistency with mortgage payments that won’t fluctuate with the markets volatility.

We don’t have to go back very far (6-7yrs) to a time when 10 year mortgages were a very popular and attractive option. During that period of time many case studies show this product didn’t work out for those borrowers who selected those 10 year terms, however there was a major difference between that period of time and today. 6-7 years ago we were in a more stable rate environment and there was very little difference between the 5 & 10 year rates at the time. Shortly after this period, rates quickly dropped to even further all-time lows.

Compare those details to our current market situation where rates have now bottomed, and it becomes quickly apparent rates have been continually rising with more sustained increases forecasted.

If security is your top key, lets talk about a 7 or 10 year mortgage option today.

Mortgage Mark Herman

Top Calgary Alberta Mortgage Broker

403-681-4376

Fixed-Rate Mortgage Penalties: Larger Than Ever!

math for IRD calculations

Many people are unaware the Big-6 banks, and all the banks you can walk into, calculate the payout penalties at much higher amounts than mortgage broker lenders.

The cost of how penalties are calculated is even more concerning when fixed-mortgage rates stay flat or rise slightly over an extended period – exactly what is happening right now.

Summary:

  • You could be looking at an extra $7,000 in penalty cost on a $250,000 mortgage, or an extra $11,200 on a $400,000 mortgage, that is broken two years early with any Big-6 lender.
  • Mortgage broker lenders still calculate the payout “the old way” – to your advantage!

Short Version:

Fixed-rate mortgage penalties are almost always calculated based on “the greater of three months interest or interest-rate differential (IRD)”. But there are key differences in the actual rates lenders use to calculate your IRD.

  • These differences are magnified in a flat or slightly rising interest-rate environment.
  • This is a big deal as the IRD calculations used by the banks below can trigger a penalty that is more than 5 times what you would be charged at a wide range of other lenders.

Long Version – hold on this is MATH!

Let’s say your current mortgage balance is $250,000 on a five-year fixed rate mortgage at 2.59%. We’ll also assume that you are three years into your term (with two years remaining) and that interest rates are the same when you break your mortgage as they were when you first got your loan.

First, we calculate the cost of three month’s interest, which we can quickly determine is $1,619.

Here is the formula we use to arrive at that number:

2.59% x $250,000 x 3/12 = $1,619

We then compare this cost to the cost of your IRD penalty, which will almost always be calculated using one of three methods: Standard, Discounted or Posted.

 

  1. The Standard IRD Penalty (used by Mortgage Broker Banks)

When using a standard IRD penalty calculation, your lender starts by taking the difference between your contract rate (2.59%) and their current rate that most closely matches your remaining term. Since you have two years left on your mortgage,  that would be the lender’s two-year fixed rate (we’ll use 2.29%, which is widely available today). The difference between these two rates is 0.30%.

The lender multiplies this difference (0.30%) by your mortgage balance ($250,000) and the time remaining on your mortgage (expressed as the number of months remaining on your mortgage divided by twelve).

Here is the complete formula:     (3.29% – 2.99%) x $250,000 x (24/12) = $1,500

And here is a table which explains where each number in the formula came from:

Standard IRD Calculation

2.59% = Your contract rate

2.29% = current rate the most closely matches your remaining term

$250,000 = remaining mortgage balance

24 = months remaining

$1,500 = IRD Penalty charged

That’s it; the standard IRD calculation. It is used by a wide range of lenders who compete with each other to offer borrowers the best mortgage rates available.

In this case the cost of three months’ interest ($1,619) is greater than the lender’s Standard IRD calculation ($1,500), so you would have to pay $1,619 to break your mortgage.

AND here is where the differences are: well-known lenders have tweaked their IRD calculations to skew the interest rates used in their formulas heavily in their favour, and as you will now see, that can have a huge impact on the size of your penalty.

 

  1. The Discounted Rate IRD Penalty (Used by RBC, BMO, TD, Scotia and National Bank)

When using the Discounted Rate Penalty, the lender takes your contract rate and compares it to the posted rate that most closely matches your remaining term MINUS the original discount you got off of their five-year posted rate (which in this case is 2.05%). Here is the contract wording taken straight from TD’s website. Key section is underlined:

{Your contract rate will be reduced by] the current interest rate that we can now charge for a mortgage term offered by us with the term closest to your remaining term. The interest rate will be our posted interest rate for the term minus the most recent discount you received.}

In other words, this lender will take the discount they gave you off of their five-year posted rate and apply that same discount to the posted two-year rate they use in your penalty calculation.

This tweak makes a big difference to the cost of your penalty and is blatantly one-sided because lenders don’t discount shorter-term fixed-rate mortgages nearly as deeply as they do their five-year terms (.30% vs. 2.05% using this same lender’s rate sheet as of today).

The table below shows you the key numbers used to calculate the Discounted Rate IRD penalty:

Discounted –Rate IRD Calculation

2.59% = Your contract rate

2.84% = current rate the most closely matches your remaining term

2.05% = discount you received on your original Contract Rate

0.79% = 2-year rate used to calculate your penalty

$250,000 = remaining mortgage balance

24 = months remaining

$9,000 = IRD Penalty charged

Yes, Ouch!

But fasten your seat belt because other major lenders dig even deeper into your wallet. The Grand Daddy of them all is the Posted Rate IRD Penalty.

 

  1. The Posted Rate IRD Penaltythe Real Pain (Used by CIBC)

Here is a breakdown of CIBC’s posted-rate penalty calculation:

In this variation, the lender calculates your IRD penalty using the five-year posted rate that they were offering when you got your mortgage. Here is a sample of the wording used to explain how the penalty is calculated (taken from CIBC’s website). Underlined, key sections:

The interest rate differential amount is the difference between the Interest on the Prepaid Amount for the remainder of the term at the posted rate at the time you took out the mortgage, and interest on the Prepaid Amount for the Remainder of the Term using a Comparable Posted Rate. Interest is calculated at the interest rate posted by [the lender] for a mortgage product similar to your mortgage product on the date the payout statement is prepared.

Now CIBC’s defence of this tactic is that they substitute posted rates for both your original rate and the rate that most closely matches your remaining term. But as we have already outlined above, this is a terrible trade that no informed person would make because Big-6 lenders must make huge discounts to their five-year posted rates to make them competitive with market five-year fixed rates, and those same discounts shrink dramatically on shorter fixed-rate terms.

If we used the same rates in this example that we used in the discounted-rate method outlined above, the posted-rate method would yield the same sized penalty. But CIBC’s posted rates tend to be higher (which they were at the time this post was written), and for that reason, their penalties earn the moniker of “The Grand Daddy of Them All”.

Here is what that small change to the wording in your contract does to your penalty:

Posted-Rate IRD Calculation

4.79% = 5-year posted rate that was offered when you got your mortgage

2.84% = current rate the most closely matches your remaining term

$250,000 = remaining mortgage balance

24 = months remaining

$9,750 = IRD Penalty charged

 

Long Summary – thanks for getting this far!

Don’t be Surprised. These inflated mortgage penalties generate substantial profits for the lenders who use them and when uninformed borrowers choose to negotiate directly with their lender, is it that hard to imagine that some of those lenders would word the fine print to their advantage.

To be clear, there is not a problem with mortgage penalties in principle. When you break a mortgage contract, your lender incurs costs when they unwind agreements related to your loan (these agreements can relate to hedging, servicing, secularization etc.). The penalty charged is supposed to cover these costs while also recouping part of the lender’s lost profit. Fair enough. That’s why they’re called “closed mortgages”. But is it fair for some lenders to use these early terminations as “gotcha” moments?

There is no way on earth that the average Canadian mortgage borrower has any idea that there are significant differences in the way fixed-rate mortgage penalties are calculated, and the largest Canadian lenders, who have milked that lack of awareness to their advantage for years, have been in no hurry to explain it to them.

Summary: a conscientious and well informed independent mortgage planner should be able to explain how penalties are charged by any lender they are recommending.

Bank Payout Penalties: The math behind “how they get you!”

This is a great article with the perfect math example.

Remember, there is also the catch of the collateral charge by the big banks that makes it cost about $2500 to leave your bank when your term is up.

Add these 2 things together and the better overall deals are from mortgage brokers.

Mark Herman, Top Calgary, Alberta Mortgage Broker for renewals and home purchases.

by: Angela Calla, AMP.

When choosing between mortgages, knowing how different lenders calculate penalties can be essential. The market and your needs easily shift during the term of your mortgage and the last thing you want is a painful penalty in order to get out early.

Penalty formulas differ radically, depending on the lender. A major bank, for example, will have a considerably higher penalty than a broker-only wholesale lender. Advice on how to avoid painful penalties is a key benefit of working with a mortgage broker.

You need to ask one important question right off the bat: What rates does the lender use to calculate its penalty? The actual discounted rates that people pay, or some artificially high posted rate? Hopefully the former.

Below is an example of how two lenders calculate the same “interest rate differential” penalty in different ways. Ask yourself, which one would save you the most money?

Penalty #1 – Broker Lender
Contract Rate (The rate you actually pay) 4.19%
Current Rate (Today’s new rate, closest to your remaining term) 3.09%
Differential (Contract Rate – Current Rate) 1.10%
Remaining Balance $229,000
Remaining Months 16
Penalty Formula: Remaining Balance x Differential ÷ 12 x Remaining Months $3,358.67
TOTAL APPROXIMATE PENALTY $3,358.67
Penalty #2 – Major Bank
Contract Rate (The rate you actually pay) 4.19%
Current Posted Rate (Today’s new posted rate, closest to remaining term) 3.39%
Original Posted Rate (At the time you got your mortgage) 5.99%
Original Discount (That you received off the Original Posted Rate) 1.80%
Differential (Contract Rate – (Current Posted Rate – Original Discount)) 2.60%
Remaining Balance $229,000
Remaining Months 16
Penalty Formula: Remaining Balance x Differential ÷ 12 x Remaining Months $7,938.67
TOTAL APPROXIMATE PENALTY $7,938.67

As you can see, there can be quite a difference in prepayment charges when you leave a lender early – over $4,500 in this example. And this is a modest hypothetical calculation. Bank discounts today are on the order of 2.00 percentage points off posted, instead of the 1.80 I’ve used here.

Some lenders will even charge an abnormally high penalty (like 3% of principal) despite you being close to the end of your mortgage term. They do this as a retention tool to keep you from leaving. Others will charge a “reinvestment fee” on top of the penalty, tacking on another $100 to $500 in expenses.

In short, penalties can be thousands—or even tens of thousands—higher depending on the lender’s specific calculation formula, mortgage amount, rates and time remaining until maturity. Extreme penalties are not only more expensive, they can even keep borrowers from moving because the amount eats into the money they’ve got for a down payment and closing costs.

Worse yet, some lenders have a “sale only” clause in their mortgages, meaning you can’t even leave them unless you sell the home. If you think, “Oh, that’s no big deal. I don’t plan on selling,” think again. Throughout every path in life, there are moving parts and uncertainties. When you get married, do you plan on divorcing? Likely not. Did you predict the company you were with for 20 years could downsize, or your pension would be reduced or cut? Can you guarantee your health will never throw you a curve ball?

We all want to believe that none of the above scenarios will come to pass, but they can and do. And when they do, what a relief it is to have options.

And last but not least, there is the refinance consideration. If interest rates fall 0.5-0.8%, (which may seem unlikely but is certainly a possibility) there may be opportunities to lower your borrowing costs. But you can’t do that unless you’ve got a low-cost way to renegotiate your existing contract. And as we’ve seen above, that cost is not based on just your interest rate alone.

Another example: When the rates are the same at the bank and the broker = broker deal is significantly better.

Here is what happens when the Current Posted Rate (Major Banks) = the Current Rate (Broker Lender) at 3.09%

Differential (Contract Rate – (Current Posted Rate – Original Discount)) = 2.90%
==> (4.19% – (3.09% – 1.80%)) = 2.90%
==> (4.19% – 1.29%) = 2.90%

Therefore:

Penalty Formula: Remaining Balance x Differential ÷ 12 x Remaining Months
==> $229,000 x 2.90% / 12 * 16
==> $8854.67

Moral of the story – talk to a broker and understand your penalty calculations.
You can talk to your major bank as well, although I don’t think they can spin the penalty calculation conversation into a favourable one for themselves.

Newly increased fees for home buyers – comments

The new fees are not that big a deal. It will add a bit but not much. All the news is just noise by the press looking to turn out an easy article. Below are my comments that will be in the Calgary Sun this week.

Mark Herman, top Calgary Alberta mortgage broker for home purchase mortgage and renewal mortgages.

The additional $1,925 added to mortgage costs ends up costing an extra $8.81 a month for a $450k purchase – the average home price in Calgary – with 5 per-cent down on the maximum 25 year amortization.

“This really should not be that big a deal in the overall picture. We’re talking about the most expensive purchase most people make. An extra $2450 should not be a deal breaker. If it is, the buyers should really second think their continued ability to afford a home, especially if you consider that interest rates are at all-time 115-year lows. A rate increase, even back to what is considered the theoretical minimum of 4 pre-cent for the 5-year fixed, closed mortgage, should be considered more than this minor cost increase.”

For an average home at $450,000, the new increases with the budget for land title registration cost AND the new CMHC insurance premium for 5% down – from 3.15% to 3.6%:

The increase in the CMHC fee goes to $15,390 from $13,466 or an increase of $1,925.

The increase in the land title registration cost – attached – is an extra $525.

Total increase is $2,450 or 0.5% total increase in the costs to buy a home with 5% down payment.

Really not a big deal when you consider:

  • Alberta does not have a 1% property transfer tax like B.C. and Ontario
  • The cost for registration and land titles was cut by Ralph Klein years ago and has not increased since
  • Buying a home for almost half a million dollars has only increased by 0.5% and
  • Mortgage rates are at, and continue to hold at, now record lows; most mortgage broker rates are 2.69% for a full featured, 5 year mortgage with all the bells and whistles.

Fee increases may cause sticker shock for potential Calgary homebuyers

Fee hikes in Thursday’s provincial budget will add more than $1,000 to the cost of buying an average home in Alberta …

… The province said several real estate-related fees will increase effective July 1. Among the announced changes, the transfer/title creation flat fee rises from $50 to $75, while the variable fee will jump from $1 to $6 for each $5,000 in home value. Mortgage registration fees are to increase the same amount.

On a $450,000 mortgage, that would mean an increase from $140 to $540 for each.

“Unfortunately, these fees are assessed at the end of the real estate transaction and so are not included in the purchase price of the house, nor can they be rolled into the mortgage, so homebuyers will need to come up with that extra cost,” Copeland said.

Corinne Lyall, president of the Calgary Real Estate Board, said the government has kept fees low for some time. This is the first time since 2011 that the flat fee for property and mortgage registrations has increased.

mtoneguzzi@calgaryherald.com

Twitter.com/MTone123

Lump Sum Payment Strategy / Use your RRSP refund pay down your mortgage

Here is a great way to use your tax refund to repay / pay down your mortgage. It does make a difference.

But you still have to live. I recommend using 1/2 of it for this and the other 1/2 for something you NEED, not want.

Lump Sum Payment Strategy

Tax Season is fast approaching and the average Canadian tax refund is approximately $1600. An excellent use of these funds would be a lump sum mortgage payment. If a client was to do so they could save thousands of dollars in interest over the life of their mortgage. For example:

Mortgage Amount                                                    $300,000

Mortgage Interest Rate                                            3.25%

Pre-Payment                                                          $1,600

Approx. Interest Savings Over 25 years                    $1,600 x 3  = $4,800

The above savings might seem trivial if looked at as a one-time event, however if you continue this strategy on a yearly basis they could save over $17,000 in interest over the life of their mortgage. Additionally, this would help you become mortgage free almost 5 years faster.

***note the above calculations are based off a 25 year amortization, a higher interest rates would increase the savings***

What does Calgary housing have left for price increases in 2014?

This is part of Garry Marr’s article where he looks at what prices may do in 2014.

Mark Herman

Investors in Toronto continue to bet on price appreciation in the face of negative cash flow, leaving them vulnerable to a market shift.

 “If prices start to fall, we could see investors getting antsy and start to sell their units which could aggravate the market,” said Mr. Guatieri who nevertheless says the risk is low because  a spike in rates seems unlikely.

If there is a market that can support further price gains it is Calgary which has been a major benefactor of net-immigration growth. BMO noted Alberta attracted 53,000 more people in the last year than it lost.

“It’s not not just the rapid population growth but a young population and those are your first-time buyers,” said Mr. Guatieri, noting Calgary had a correction back in 2008-2009 when average prices fell 16%.

But the idea of a crash in 2014? He just doesn’t see it happening.

“I see [price growth ] still and that’s definitely true in Calgary.

here is a link to the rest of it: Republish Reprint: Garry Marr | December 17, 2013 | Last Updated: Dec 27 5:14 PM ET

Glut of job vacancies in Alberta; 52,800 vacancies – supports home prices

This is more great news and  more data on why people will continue to move to Alberta and need places to live thereby supporting home prices.

Mark Herman

Job vacancies in Alberta outstrip available labour

Province led the nation in employment opportunities in September

CBC News Posted: Dec 30, 2013 5:50 AM MT Last Updated: Dec 30, 2013 5:50 AM MT

Alberta employers have more job openings than there are job seekers to fill them.

Alberta continued to be the best place in the country for job-seekers in the fall of 2013.

Businesses in the province reported 52,800 vacant jobs in the month of September. Statistics Canada says that is fewer than the previous year, but still the highest number in the country.

Bruce Graham, the CEO of Calgary Economic Development, said the city is experiencing its lowest unemployment rate since the recession of 2008.

“We’re still considered very much a bright spot in the economic landscape of North America.”

Graham said employers are having difficulty recruiting workers.

For the full article see: http://www.cbc.ca/news/canada/calgary/job-vacancies-in-alberta-outstrip-available-labour-1.2477566

Renewing your mortgage early? It may cost you

We get this question all the time – should I renew early. Do early mortgage renewals save or cost you money? Below Rob does a great job summarizing the situation.

ROBERT MCLISTER

Special to The Globe and Mail

 A rate in the hand is worth two in the bush.

Many mortgage lenders want you to believe that rate certainty is worth paying a premium for. It is the justification, they say, for staying with them and renewing your mortgage early.

 Early renewal features typically let you lock in a new rate two to four months ahead of when your mortgage is due to mature. Some lenders, like Bank of Nova Scotia, even let you renew up to six months in advance.

 “Unless the consumer believes that interest rates are going to move up significantly prior to their ability to lock in, I fail to see a reason to do an early renewal with their existing lender,” says mortgage broker Calum Ross.

 By locking in earlier, you minimize risk of adverse rate movements. But in return, you pay a premium to the best available rates, and you’ll lose all benefit if rates drop before your term is up.

Not surprisingly, Canada’s big lenders are advocates of renewing your mortgage in advance. “We think it’s a good idea to have some room to manoeuvre [when locking in a renewal rate],” says David Stafford, Scotiabank’s managing director of real estate secured lending. Having more time to make a decision is especially important if you plan to renew with your current lender, as more than 90 per cent of customers do at Scotiabank…

… On the other hand, if your lender were pitching a “one-time-only” opportunity to renew early at 3.59 per cent or more, that warrants more skepticism. A 0.30-percentage-point rate difference would tack on $3,500 of extra interest on a $250,000 five-year term. (Note: This 3.59-per-cent rate is an actual early renewal “special” currently being offered by at least one major bank.)

I use 0.30 of a percentage point in my example on purpose: That’s roughly how high today’s best fixed rates can increase until they’re equal to a good early renewal rate.

But it’s not that often that rates jump 0.30 of a percentage point in 90 days. Since the 1950s, fixed rates have risen 0.30 of a percentage point over a three-month span only 21 per cent of the time. Mind you, we experienced one such case last May to July when rates soared three-quarters of a percentage point.

Either way, if lenders can get you to commit early, they will. By law, banks have to send you a renewal notice at least 21 days before the end of your existing term. But they’ll often contact you well in advance of that, which reduces the odds of you shopping around.

Positioning early renewals as a “convenience” or risk mitigator is a strategy that frequently pays off for lenders. According to the Canadian Association of Accredited Mortgage Professionals, almost four out of 10 people who renew with the same lender do so at the original rate proposed by that lender. In other words, they don’t negotiate…

… “It is clear to me that consumers don’t do a good job at managing this part of their personal finances,” Mr. Ross adds, and that’s certainly true. If you want a great deal on your next mortgage renewal, one that could potentially save you thousands, remember that your lender’s first offer is seldom the best offer.

Robert McLister is the editor of CanadianMortgageTrends.com and a mortgage planner at VERICO intelliMortgage, a mortgage brokerage. You can also follow him on Twitter at @CdnMortgageNews.

Alberta still the fastest growing economy in Canada

Here is a bit about the post from last week where I noted that if Alberta were a country it would tie China for growth. No surprise Alberta hast he strongest economy in Canada. All this of course will support home prices while others move her for high quality jobs.

Mark Herman

Alberta Mortgage Broker

Alberta economy fastest growing in Canada

Forecast 3.4% annual growth in 2014

 By Mario Toneguzzi, Calgary Herald December 9, 2013 3:00 PM
 
Alberta’s economy will outperform all other provinces in 2014

CALGARY – Alberta has been the largest contributor to economic growth in the country for three consecutive years, outpacing the much larger economies of Central Canada, says a new report released Monday by the Conference Board of Canada.

And the board’s Provincial Outlook: Autumn 2013 report said Alberta will have the fastest growing provincial economy in 2014 with 3.4 per cent year-over-year growth.

Alberta will have the fastest growing provincial economy in 2014.

“Alberta’s outlook is so exceedingly bright right now in the context of all the risks that we’re seeing going on in the world. We’re seeing Alberta coming off two years of exceedingly strong growth,” said Todd Crawford, senior economist with the board. “And 2013, 2014, we’re going to see GDP growth of 3.2 per cent, 3.4 per cent over the next two years.

“It’s exceedingly strong and of course that’s all being driven in large part by the strength of the energy sector in the province. That’s not something that’s going to, or has changed, for much of the past decade.”

“Alberta’s economy is definitely the most resilient in Canada,” said Ben Brunnen, an economic consultant in Calgary. “No other province has grown by above 3.5 per cent each year since 2010. Strong resource demand will continue to drive Alberta’s economy into 2014, fuelling population and job growth, construction activity, and increased household spending.