Alberta’s Best Mortgage Rate - 3.59 on a 5 year fixed 3.49 on a 3 year fixed

Current Mortgage rates 3.59% 5 year fixed

Current Mortgage rates 3.59% 5 year fixed

We saw a roller coaster ride on the fixed mortgage rates for 2009, 2010 and now it looks like 2011 will be no different. In the 2009 summer Alberta had the lowest mortgage rate of 3.5% for a 5 year fixed. Then a month later it had shot up to 4.5%. Then because of the bond rate Alberta again had the lowest mortgage rates at 3.69%. Current mortgage rates again started to increase for October and the first part of November of 2009. Most of the branch mortgage specialists of the Major Banks were sitting at close to 4.49% on a 5 year fixed. At the end of 2009 the bond market softened up a bit, and rates declined slightly. The best mortgage rate for Alberta or anywhere was 3.89% on a 5 year fixed.  Right around December of 2009 I had all these reports that the banks were going to jump the rates up.  Then the banks, true to their nature the opposite happened in the beginning of February 2010.  Rates dropped.  Now after the banks raising rates in January of 2011, now they are back down to the 3.5% range.  

The lowest fixed rates we have ever seen is 3.49% on a five year fixed, we are know currently at a 3.59% on a 5 year fixed and there are only a few lenders offering it.  One great thing about this mortgage is it can be used purchases, and Mortgage refinances but it can only be held for 30 days from the time I submit the application.

The bank of Canada has been saying for the last year that rates are going up and they have but they have also come right back down.  So it is left to us to guess as no one seems to have a clue what is going on. Generally when the economy isn’t doing so hot they keep the rates low. Our economy and especially the housing market are definitely showing all the signs of the recession being over. The problem is it isn’t that simple.  You have to consider the increase in our dollar, increase in Jobs, problems with our Southern Neighbors and pretty much every other economic situation in the world.  Imports, Exports, an increase of printing money and whole bunch or other factors and the rates are a result of all of that.

Everyone seems to have their guesses about what this will happen to the fixed and variable but as consumer confidence continues to grow I feel that we will continue to see rates low for the most part of  2011 and then look for the roller-coaster ride of rates trending upwards in 2012 until we get back to normal rates of 5 – 6%.  Because of the uncertainty, many will still be working hard to get Alberta’s best mortgage rate locked in.

Whatever you decide to do make sure that you are picking they type of rate that makes sense for you unless you have a crystal ball of course.


































Clarifications on Canada Mortgage Changes

Finally!  Here are some clarifications on mortgage changes The Bank of Canada announced almost a month ago!

Effective April 19th, all terms less than 5 years that are high ratio insured mortgages (anything less than 80% Loan to Value) will be qualified using the greater of the chartered bank 5-year posted rate (5.39% currently), or the term rate (some banks have fixed rates on 5 – 10 year terms that are higher than 5.39%).  Currently most banks are qualifying right around 4% on variables and will only qualify higher on fixed terms less than 3 years.  So what does this mean?  Until CMHC changes its mind again, 5 year fixed rates are the only rates that you won’t have to qualify on the highest rate.    

The posted qualifying rate will be published by the Bank of Canada each Monday.  Here’s the link:  Posted Mortgage Rate  (Look for series V121764.)

More not-so-good news for Canadians – Fixed rates look like they will be going up right away!  How do we know?  Because Canada’s 5 year government bond jumped up 18 points last week, the most in almost five months.  (Bond yields guide fixed-rate mortgage pricing.)  Yes, you may have heard that the Bank of Canada has kept the prime rate the same, but variable rates and fixed rates are usually influenced by different factors. 

Some reasons why fixed rates may be rising very shortly:

·         stronger-than-forecasted U.S. employment data

·         new June maturity as the 5-year benchmark, asset rotation into stocks

·         20% increase in debt issuance announced in last week’s budget

·         Increased consumer confidence

·         More people spending money

A reason why rates might hold off a bit:

·         Canadian employment data that usually comes out the same day as U.S. data has been held off until this week.  If jobs are up, then we’ll be seeing interest rates jump up once again. 

Here are some more changes happening in the industry because of the 2010 Federal Budget.

  • Pre-payment Penalties: The Government will attempt to “bring forward regulations” to standardize the calculation and disclosure of mortgage pre-payment penalties. (This applies to federally regulated lenders.)  This is mainly to help inform the average Canadian about clauses in their mortgages papers like Interest Rate Differential (IRD) penalties. 
  • Credit Unions:  The Canadian government will begin “legislative framework to enable credit unions to incorporate and continue federally.”  This could help Credit Unions have more of a chance to compete with big banks so that they could do other provinces then just the ones they are located in. 

Dec 02, 2009 New Real-Estate Stats

Bank of Canada Interest Rate

September 10, 2009

0.25%

October 20, 2009

0.25%*

December 8, 2009

Next meeting date

Source: Bank of Canada
*Bank of Canada statement included reference to hold rate to end of second quarter 2010

 

Bank Prime Lending Rate

September 11, 2009

2.25%

October 21, 2009

2.25%

December 9, 2009

Next meeting date

Source: Bank of Canada

 

US Federal Reserve Board Discount Rate

September 22, 2009

0.00% – 0.25%

November 4, 2009

0.00% – 0.25%

December 15, 2009

Next meeting date

Source: US Federal Reserve

 

Exchange Rate $CDN($US)

October 30, 2009

.9243

November 13, 2009

.9519

November 27, 2009

.9421

Source: Bank of Canada

 

Government of Canada Bonds

Bond Type

October 28,
2009

November 12, 2009

November 25, 2009

1 year Treasury Bill

0.60%

0.54%

0.48%

3 year Benchmark
Bond Yield

1.90%

1.87%

1.62%

5 year Benchmark
Bond Yield

2.70%

2.70%

2.41%

10 year Benchmark
Bond Yield

3.45%

3.51%

3.25%

Source: Bank of Canada

 

Total New Housing Starts (Seasonable adjusted and annualized)

Province

August
2009

August
2008

September
2009

September
2008

October
 2009

October 2008

Newfoundland/Labrador

2,400

3,100

2,800

3,200

2,900

3,100

PEI 

1,000

700

700

500

1,200

 600

Nova Scotia

4,200

3,300

4,500

4,400

4,000

4,300

New Brunswick

3,700

3,800

2,900

4,500

3,600

5,000

Quebec

47,300

43,300

41,300

70,100

37,200

48,400

Ontario

44,200

89,800

50,200

84,200

57,600

82,600

Manitoba

5,000

5,400

4,400

5,600

4,200

5,800

Saskatchewan

5,100

5,300

3,700

6,400

3,600

4,900

Alberta

18,400

22,900

22,600

57,300

25,000

24,700

British Columbia

19,200

33,500

16,200

43,900

18,200

32,300

Canada

150,500

211,100

149,300

281,300

157,400

211,800

Source: CMHC Housing Now – November 2009 and November 2008.
This seasonally adjusted data goes through stages of revision at different times of the year.

 

Average MLS resale price for local markets

City

October 2008

October 2009

Halifax

$224,607

$235,465

Saint John, NB

$151,709

$178,632

Quebec

$198,357

$219,719

Montreal

$257,242

$284,024

Ottawa

$280,870

$320,561

Toronto

$353,018

$403,507

Hamilton/Burlington

$254,004

$296,253

Winnipeg

$190,374

$210,618

Saskatoon

$285,310

$274,759

Calgary

$388,565

$399,679

Edmonton

$317,744

$318,969

Vancouver

$556,682

$638,948

Victoria

$469,243

$481,500

Source: Canadian Real Estate Association

 

Housing Affordability Index


Standard Two-Storey

 

Average Price

Qualifying Income($)

Affordability Measure

Region

Q3 2009
($)

Y/Y
% ch.

Q3 2009

Q3 2009
(%)

Q/Q
Ppt. ch.

Y/Y
Ppt. ch.

Avg. since ‘85
(%)

Canada

344,100

-0.3

79,100

45.8

1.2

-5.8

43.3

British Columbia

557,400

-1.2

113,600

67.6

2.9

-8.5

53.7

Alberta

368,200

-4.9

82,200

37.9

1.3

-7.5

38.5

Saskatchewan

305,500

-0.8

73,200

44.0

1.0

-4.6

37.6

Manitoba

244,900

3.5

61,300

37.5

0.3

-3.4

37.5

Ontario

362,100

-0.3

85,300

45.2

1.0

-5.8

44.0

Quebec

240,100

2.8

59,000

40.4

1.2

-3.7

39.0

Atlantic

210,000

1.3

55,000

35.9

0.4

-4.7

38.7

Toronto

522,600

0.2

115,300

57.8

1.9

-7.5

53.7

Montreal

305,800

0.7

71,300

47.4

0.8

-5.5

41.3

Vancouver

678,900

-1.9

135,500

74.2

4.3

-10.2

61.7

Ottawa

320,800

1.0

81,000

40.5

0.4

-4.4

39.5

Calgary

414,600

-4.7

88,100

38.5

2.0

-8.1

40.0

Edmonton

365,300

-2.6

83,100

38.9

0.9

-6.7

36.8

 

Standard Condominium

 

Average Price

Qualifying Income($)

Affordability Measure

Region

Q3 2009
($)

Y/Y
% ch.

Q3 2009

Q3 2009
(%)

Q/Q
Ppt. ch.

Y/Y
Ppt. ch.

Avg. since ‘85
(%)

Canada

205,700

-1.0

47,600

27.6

0.5

-3.6

26.9

British Columbia

275,600

-0.3

57,100

34.0

1.2

-3.9

28.0

Alberta

219,300

-7.9

48,700

22.4

0.5

-5.2

22.1

Saskatchewan

186,200

-8.7

44,600

26.8

0.8

-4.7

24.1

Manitoba

130,100

4.8

33,400

20.5

0.3

-1.6

20.9

Ontario

217,200

-0.9

51,800

27.4

0.5

-3.6

27.9

Quebec

170,300

1.2

40,700

27.8

0.1

-3.0

27.0

Atlantic

149,800

4.8

37,700

24.6

0.3

-2.5

24.7

Toronto

292,700

-1.5

65,400

32.8

1.0

-4.7

31.2

Montreal

204,500

3.9

47,100

31.3

0.9

-2.8

29.0

Vancouver

351,500

0.4

70,600

38.7

1.7

-4.4

31.4

Ottawa

209,000

1.3

51,600

25.8

0.3

-2.8

23.6

Calgary

249,500

-7.3

52,700

23.0

0.3

-5.5

22.8

Edmonton

206,000

-6.8

46,800

21.9

0.5

-4.7

18.1

 

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