Dear ,
It's been a very interesting last 6 weeks for us here
at the Averbach Mortgages office. Fixed rates are on the rise and if you were
lucky enough to call us and get your renewal, refinance or purchase application
into us prior to October 10th, you likely have your rate secured at
under 4% until January and February.
Rates increased by up to 35 basis points
in the past week and a half for all terms and that has left many scratching
their heads thinking "what happened?" ... including us!
Finally some
positive data comes out about employment and bond yields spiked! Could this be
another false alarm like we had in June when fixed rates increased by up to 50
basis points and then settled back down to below 4% by the middle of July? I
guess we'll find out over the next few weeks. What we do know is that the
Bank of Canada continues to stand by their commitment to not raise the
overnight rate (Prime) until mid-2010 with two exceptions; the rising Canadian
Dollar and inflation remaining low being the limiting factors to any increases.
In this case, if you are in a variable rate mortgage or are tied to Prime, you
still have time to enjoy your super-low interest.
Remember, Prime WILL increase
aggressively at the first sign of positive economic growth and inflation so if
there is a rate available now that you can live with for the next 3 to 5 years
(3.59 to 4.19), consider locking in and rest easy. Many of you have grown quite
accustomed to paying under 2% so paying 2% more could come as quite a payment
shock, especially if you've been spending more than saving.
Call or email
us to discuss your situation and whether or not the time is right for locking
in.
Some very interesting news has come out of data collected by
my governing body's chief economist, Will Dunning of the Canadian
Association of Accredited Mortgage Professionals (CAAMP):
- One of
the reasons the Canadian economy hasn't been hurt as badly as the US is
due to the dissimilar breakdown in where housing spending dollars went. With
low interest rates and a HOT US housing market, Americans were investing
heavily in houses for investment purchases. In fact 40% of house purchases were
for investment purposes. In Canada that stat is closer to only 5%. This is a very
extreme difference in what was driving the economy and what ultimately affected
it. With high unemployment and a crash in the housing market, that is a
significant amount of money no longer being pumped into the US economy.
- Canadian
mortgage arrears rates have literally doubled over last year. Luckily we had a
very low rate however that number has increased from .20% to .40%
-
Last
year 18% of Canadians refinanced, equating to a total of $41 billion being removed
from home equity for refinances. Driven by even lower interest rates, this year
that number remains close to the same. The major stats in that breakdown were:
-
$17 billion to pay down debt
-
$12 billion to renovate
-
$6 billion to invest
-
$3 billion purchase
-
$3 billion other
CLICK HERE to See Current Rates
Sincerely,
Mike Averbach and Justin Blacklock
PS. Averbach Mortgages has a new look! Check out our home page to view
our new message displayed along with our favorite images by BC artist, Tony
Max. Thanks Tony, for your support! |
