Interest Rates Going Up - 30 Day Rate Hold Available

[Travis Munroe]

I just got a call from my mortgage specialist advising that rates are going up and will be in effect Monday.
Currently a 5 year fixed is at 3.49% and it will be going to the 3.59/3.69% range.
If you are thinking about buying in the next little bit I can hold the lower rate for you. All I need is your name and approximate amount to be mortgaged.
There are still 8 of 10 holds available!


PS: lets not turn this into a "I can get a lower rate with so and so" thread. While you may find a slightly lower rate elsewhere chances are you are losing some perks that would normally come standard that will cost you more in the long run.

[Travis Munroe]

Note: you are not forced to buy if you have the rate hold, more of a just in case scenario.

[Bagor]

Strange, I've been hearing all day how bank interest rates are going to remain low.

OTTAWA — A new report finds low interest rates are keeping Canadian house prices within reach of homebuyers in many markets. The Royal Bank's quarterly report on housing trends, released early Friday, shows housing affordability improved slightly in the third quarter, after two consecutive quarters when things got worse.
RBC chief economist Craig Wright says a lower interest rate environment, which includes mortgage rates, is helping to reduce the cost of a home.
"Elevated uncertainty relating to the European sovereign-debt crisis and the downside risk for economic growth have contributed to keeping interest rates at low levels," said Wright.
Those lower rates are helping to cushion the impact of rising home prices in many cities even as the economy slow and consumer confidence weakens.

RBC forecasts that interest rates will remain exceptionally low in Canada until mid-2012 and rise gradually after that.

http://www.ctvbc.ctv.ca/servlet/an/l...shColumbiaHome

Also, the BOC's next interest rate decision isn't until Dec 6th.

Mr. Carney acknowledged that interest rates are likely to go up at some point between now and the end of 2013, but gave no indication as to when, or by how much.“The path for interest rates in Canada will be appropriate ... to achieve the inflation target, and we’re not going to tie our hands on that path because we’re obviously living in volatile times,” he said in news conference after his speech. “At some point over that horizon there will be a removal of monetary stimulus, but obviously we have to manage according to events.”

http://www.theglobeandmail.com/repor...rticle2246251/

OTTAWA - There is good news for anyone holding credit card debt, a car loan or a variable rate mortgage. In a speech to the Board of Trade of Metropolitan Montreal, Bank of Canada governor Mark Carney confirmed he is still comfortable with a policy that has kept interest rates low.
"In this environment, the bank judges it appropriate to maintain the considerable monetary stimulus in place," Carney said.
The current policy has put Canada's key interest rate at just 1%, which makes consumer debt more affordable and also tends to stimulate the economy.
Carney attributed the policy, in part, to Europe's debt crisis.

http://www.torontosun.com/2011/11/23...ng-room-carney


I presume you asked your specialist where they got there info from and what they are basing it on?

[Travis Munroe]

Agree to disagree, we can discuss Monday if you feel I'm posting false info.

[Bagor]

All I was doing was asking for a source/basis for your specialist's claim just the same as if someone was making a speculation/rumour post regarding a potential hockey transaction. For all I know your specialist drinks Orange Julios.

Having said that and being completely frank, I find it a little strange that a thread is started about interest rates with rates from one individual posted and the idea of discussing better deals out there discouraged. There's mortgage brokers on this forum (e.g. Mike Oxlong) whose thoughts and rates I'd be interested in hearing also.

Sorry, I just don't get it.

[Bill Bumface]

Bagor, you're talking about the BOC rate which affects variable mortgages. Realtor1 is talking about fixed mortgages which go more with bond rates.

[Travis Munroe]

I didnt mean to come across bold, my bank of nova scotia rep informed me that rates are going up.
There is no problem with discussing better deals I just didnt want this thread to turn into a "I can get this rate" thread.

[Kavvy]

Originally Posted by hulkrogan

Bagor, you're talking about the BOC rate which affects variable mortgages. Realtor1 is talking about fixed mortgages which go more with bond rates.

whaaaa

mind blown,

Can you explain this? I thought mortgage's rates were based on the BOC prime rate?

[Bill Bumface]

Check out this site. You can see fixed rate vs variable rate over history: http://www.canequity.com/mortgage_rate_history.stm

Fixed rates are based on what rate people are willing to lend future money at, which is a whole different ball game than variable rates that follow the BOC rate (mostly).

[Kavvy]

Originally Posted by hulkrogan

Check out this site. You can see fixed rate vs variable rate over history: http://www.canequity.com/mortgage_rate_history.stm

Fixed rates are based on what rate people are willing to lend future money at, which is a whole different ball game than variable rates that follow the BOC rate (mostly).

I guess that makes sense, with fixed you have to bet on the future, I just thought it was a internal bank algorithm or something, thank you!

[Bagor]

Originally Posted by Kavy

I guess that makes sense, with fixed you have to bet on the future, I just thought it was a internal bank algorithm or something, thank you!

Kavy, it's variable that you're taking more of a gamble in that there is a risk of fluctuation (up and down). Fixed is more costly but stable for the term.

Hulk, thanks for that. Was completely unaware of that. I too assumed it was calculated through prime.

Realtor, your last post changes the whole premise of the thread given that it a bank employee that was your specialist. The title suggested that rates were going up across the board and led to an assumption (on my part anyway) that this information was from someone that works in the "general" mortgage industry (i.e. a broker) as opposed to a one bank employee.

FWIW from my experience i would never ever consider a mortgage of any kind without consulting a mortgage broker and never ever believe a word I was told from a bank mortgage specialist based on a conversation I had years back in Scotiabank whilst searching for my first mortgage ....

Him: We can offer you 4.00 (example). That's the very best we can do and you'll find that you won't get that anywhere else.
Me: RBC can do 3.75 (lying through teeth)
Him: Let me just go and talk to my manager. Returns a minute later to say they'll match it.

Went and got a broker for a much better deal.

JMO but if you're borrowing that kind of money then I'd explore every option out there.

[Mike Oxlong]

Hulk is exactly right. variable rates are based on Prime which the bank of Canada meets on and potentially adjusts 8 times a year. Those rates look like they are going to be staying pretty steady in the short term. With all of the economic uncertainty in the world all signs point to variable rates staying status quo.

That being said, the spreads on variable rates have made them more expensive lately. You used to be able to get variable rates at Prime less .8%. now the best you can find is likely around Prime less .25%. However that doesn't matter to the people that are already in a variable rate, it won't affect you. It just makes variable rates less attractive for those just about to buy.

Fixed rates are determined by bond yields. As the yields increase and decrease so will the fixed rates that lenders offer. The bank of Canada does not affect these rates directly.

I don't want to hijack this thread but I do have some comments on brokers vs. Banks argument that I will talk about in my thread in the power ring forum.