Finding a good mortgage rate online is a cinch. Anyone who has ever looked for rate comparison sites knows the Internet is packed with them.
But determining the best mortgage term – the length of the mortgage contract – is trickier because up-to-date term comparisons are hard to find.
Although mortgage terms are often overshadowed by the intense focus on mortgage rates, it pays to put a lot of thought into term selection. It’s the No 1 factor in determining how much interest you’ll fork over to a lender.
If you pick a closed mortgage with the wrong term, you’re stuck with that rate until maturity, unless you cough up a penalty to break the mortgage. Worse yet, if you choose a “no-frills” mortgage – one with lower rates in exchange for more restrictions – you’re often barred from leaving your lender for the duration of the term, unless you sell the property.
Click here for the full Globe and Mail article.
With the mainstream financial media now sounding a shrill alarm about the Canadian housing bubble, is it time to sell the house?
Unless you’re transferring to a new job, or a retiree wanting to downsize or move to more favourable climes, you’re probably better off staying put rather than capitulating to the panic of articles like, Ready to be bold? Sell the house and rent.
House prices may indeed stagnate or head south for a while, especially in the heated condo markets of Vancouver and Toronto. Those kinds of fluctuations are part of the natural course of markets.
But to say house prices are going to crash like they did in the US is a stretch. Click here for nine reasons why from Canadian Business.
Canadian consumers are reining in their debt burdens amid repeated warnings on household borrowing from Bank of Canada Governor Mark Carney and other policymakers.
The growth of consumer debt has eased as of March, rising at the slowest pace since 2002, CIBC said today.
“For the first time in more than a decade, consumer credit in Canada is rising more slowly than in the US,” said CIBC Economist Benjamin Tal.
“Soft credit card activity is largely behind the softening in overall growth in consumer credit,” Tal said in a report. “And here, we see increased optimization of the debt burden with active transfer of balances from credit cards to lines of credit. Term loans are still healthy due to strong demand for auto loans.”
Click here to read more from the Globe and Mail.
Canada’s condo building frenzy showed no sign of abating last month, as housing starts surged to their highest level since 2007.
While some analysts had predicted housing starts would weaken after a particularly strong March, starts in April rose to an annualized rate of 244,900, readily beating predictions of 204,000 made by most economists.
“This report reflects unbelievable strength in Canadian housing starts, and all of the gain was in multiples again, which reflect the ongoing Canadian condo craze,” said Scotia Capital Economist Derek Holt.
Multiples, which include apartments and condominiums, posted the second-highest number of starts on record for the month of April. In total, multiple urban starts in Canada rose by 27% to 158,500 on a seasonally adjusted basis.
Click here for the full Financial Post article.
Why we’ve locked into a 10-year mortgage.
Our new home in Scarborough is a detached, three-bedroom side-split that cost nearly $560,000. We borrowed nearly $515,000 to buy it – a sum that makes me queasy.
With the help of a mortgage broker, we chose a 30-year mortgage from ING Direct, and locked-in to a 10-year term at an interest rate of 3.99%. We will pay about $1,128 every two weeks.
As new homeowners, we want to make sure that we’re not cash-strapped in case of unexpected expenses. On the other hand, we want to pay down this enormous debt as quickly as possible. That’s why we considered the down payment, amortization, mortgage term, interest rate and prepayment privileges very carefully.
Click here for more from The Star.
Nova Scotia has new mortgage broker regulations in the works and they look like a win for the province’s homeowners.
In a nutshell, they provide NS borrowers with better disclosure and more assurance that the broker they’re dealing with is competent and acting in their best interests.
A few of the proposals may need some rethinking, however. We spoke about those with Mark Coffin, Nova Scotia’s Deputy Register of Credit.
Coffin is the lead man on Nova Scotia’s mortgage broker reform project. He says he’s hopeful the proposed broker regulations will be in place by October.
Click here to read more from CanadianMortgageTrends.com.
Banks from Citigroup Inc in the US to BNP Paribas SA in France are racing to shed assets and raise money ahead of new global capital rules that start taking effect in 2015. For Canadian lenders, these moves have created the opportunity to go on a shopping spree.
Canada’s six largest banks have spent $37.8 billion since 2008 on about 100 acquisitions at home and abroad, Bloomberg Markets magazine reports in its June issue.
“We and our Canadian competitors are only able to do that because we have some flexibility as a result of our strength,” says Gerald McCaughey, CIBC CEO, which bought JPMorgan Chase & Co’s minority stake in asset management firm American Century Investments last year. “Over the longer term, this should actually help to maintain the strength of the Canadian banking system and its competitiveness.”
CIBC was No 3 in Bloomberg Markets’ second annual ranking of the world’s strongest banks, followed by three of its Canadian rivals: TD Canada Trust (No 4), National Bank (No 5) and Royal Bank (No 6), the country’s largest lender. Scotiabank ranked 18th and Bank of Montreal was 22nd.
Click here for the full article from Bloomberg.