What, where are the rates going?
Here is what we are seeing as far as trends and looking at history notes in the market. We have seen our Canadian dollar become equal to the US Dollar... Disney is looking good for Christmas!
So that being said the housing market has softened in most markets in Canada. As well in some hot markets like Calgary, has dropped. We are asked all the time what we think, and truthfully we read materials put out there by the specialists. Our indicators tell us that fixed rates have slowly climbed over the past 4 months and will continue to do so. The Prime will most likely rise to 6.5% before the end of the year. The long look is that expectations of lowest rates for second properties are gone. Lenders are suspending programs in the Sub Prime sectors because of the risk of investors and market stability is shaky at best. If your looking at investments, be it long term or short term call me to plan out the costs of the deal... have the exit strategy planned. I would strongly suggest you gain a Pre Approval on any mortgage. Hold it until your ready because that rate hold could save you a bundle. If you have any questions as to how that works? My number is 1-877-993-8787. Your email can be replied to as well for some insight.
Steve Faux
Home-ownership rate highest on record
Canada's home-ownership rate is at its highest level on record, with people in the Atlantic Provinces most likely to purchase their personal castles while Quebecers are the least likely, according to the latest national census data.
Figures from the 2006 census, released Wednesday by Statistics Canada, show that more than two-thirds - 68.4 per cent - of all Canadian households owned the place they lived in, the highest since this information was first collected in 1961.
Willa Rea, a Statscan housing analyst, said the rate has climbed more sharply since 1996. “Low interest rates have been the main driving factor of home ownership,” she said, noting that mortgages have plummeted from above 18 per cent in the early 1980s to around 5 per cent in the early 2000s.
Canada's housing market has been booming in recent years, with sales and prices soaring across the country. But that does not appear to have dented demand for homes. Previous data from Statscan have shown that an increasing number of Canadians are shunning financial markets and investing in their homes.
“More and more, people feel as if this is a good investment,” Ms. Rea said. “When you see the price of houses going up, and if you at all are interested [in the] investment aspect of home ownership, then it is a positive reinforcement for you.”
The Statscan census does not contain information on who is doing the buying.
Provincially, Newfoundland and Labrador boasted the highest home-ownership rate at 78.7 per cent, followed by New Brunswick at 75.5 per cent and Prince Edward Island at 74.1 per cent. Alberta's rate stood at 73.1 per cent, Ontario at 71 per cent, Saskatchewan at 71.8 per cent and British Columbia at 69.7 per cent.
At 60.1 per cent, Quebec had the lowest rate among the provinces, although it had risen 2.2 per cent from 2001. Nunavut trailed the territories with a home-ownership rate of just 22.7 per cent, a 1.5 per cent drop from five years earlier.
The bustling housing market has sparked a boom in construction. Not surprisingly, the Statscan census data showed that a larger proportion of Canadians are living in new homes.
In 2006, around 8.5 per cent of households were living in dwellings built in the last five years, up from 7.1 per cent from 2001 but well below the 16.5 per cent rate in 1981, when the massive Baby Boomer demographic segment was in the process of leaving the parental home in favour of their own abodes.
Homeowners were much more likely to live in newer dwellings than renters, with 10.3 per cent of owners calling a new residence home compared with 4.5 per cent of renters.
The census also asked Canadians whether the place they lived was in need of major repairs, such as fixing defective plumbing, electrical wiring, or requiring structural work. The proportion of Canadian households who said their home needed major repairs fell to 7.5 per cent in 2006 from 8.2 per cent in 2001.
Other than Saskatchewan, which saw a small increase, each of the provinces shared in this decline. Ontarians continue to feel their homes are in the least need of major repair in the country, at just 6.6 per cent.
ROMA LUCIW
Wednesday, September 12, 2007 © The Globe and Mail
How long will this continue?
Are we seeing the end of the days of Prime - .90%? Perhaps for a while, until the money markets settle down.
The silver lining in all this is that due to Canada’s continued economic expansion and the reality of an $80+ barrel of oil, our longer term bonds are in high demand. As a result, we might see some interest rate decreases on the fixed rate products.
Alternative mortgage market expected to double
LORI MCLEOD , Globe and Mail Update
September 20, 2007 at 6:26 PM EDT
WOODBRIDGE, Ont. - Despite the sub prime mess in the United States, Canada's alternative mortgage market is expected to more than double in the next five years, according to industry representatives.
The value of the country's entire mortgage market will be about $800-billion in 2007, according to data presented at a conference Thursday in Woodbridge, Ont., hosted by the Canadian Association of Accredited Mortgage Professionals (CAAMP).
About $24-billion, or 3 per cent, of that amount will be comprised of sub prime mortgages, or loans to home buyers that don't qualify for traditional bank mortgages. That's expected to rise to $70-billion, or almost 9 per cent of the total, in the next five years.
“I think that's a conservative estimate, and doesn't seem unreasonable given it is still well below the 20 per cent in the U.S.,” said Rick Valade, president of Wells Fargo Financial Corporation Canada, in a speech at the conference.
Strong real estate prices and a lack of high-risk products has distinguished the Canadian and U.S. mortgage markets, said Ivan Wahl, chief executive officer of Xceed Mortgage Corp.
“Mortgage is spelled the same way. That's where the similarities stop. The toxic waste that is south of the border does not exist in Canada,” Mr. Wahl said in his speech.
In Canada there are few defaults on alternative mortgages, which are taken out by about one in five home buyers, according to CAAMP. Customers for these mortgages include new immigrants who haven't had time to establish a credit history here, and small business owners that don't qualify at the banks.
It's a stark contrast to the sub prime market in the U.S., where high-risk products proliferated that aren't widely offered or even allowed in Canada, Mr. Wahl said.
Examples include “teaser” mortgages that offer low initial rates, then re-price at a markedly higher level, and “ninja” mortgages made to individuals with “no income, no job, and no assets.”
At the conference, CAAMP chairman Paul Grewal also called on the federal government to help resolve the liquidity crisis he said is now hurting the ability of some qualified Canadians to purchase homes.
The Bank of Canada and Finance Minister Jim Flaherty should become actively involved in solving the problem, Mr. Grewal said.
“We think they need to be present at the table and participating in finding a solution to this liquidity issue that's affecting some of the lenders in this marketplace, but more importantly Canadians that are looking for home finance,” Mr. Grewal said.
Steve's Rates
| Mortgage Term | Our Rates | Standard Rates |
|---|---|---|
| Variable Rate | 5.45% | 7.00% |
| 6 Month Closed | 6.60% | 7.23% |
| 1 Year Closed | 6.00% | 7.00% |
| 2 Year Closed | 6.05% | 7.30% |
| 3 Year Closed | 5.90% | 7.35% |
| 4 Year Closed | 5.80% | 7.35% |
| 5 Year Closed | 5.69% | 7.29% |
| 7 Year Closed | 5.90% | 7.50% |
| 10 Year Closed | 6.30% | 7.85% |
| 15 Year Closed | 6.70% | 0.00% |
| 18 Year Closed | 6.70% | 0.00% |
| 25 Year Closed | 6.80% | 0.00% |
Rates are subject to constant change, for the best rates call 1-866-993-8787.
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A Quote to Note:
Always concentrate on how far you have come, rather then how far you have left to go. The difference of how easy it seems will amaze you.
Heidi Johnson
Contact
At Prolink Mortgage Inc., I have over 30 lending financial mortgage institutions in Canada with Steve Faux sourcing the best rates and the best products to suit your needs!
Direct Line — 1.866.993.8787
Direct Fax — 403.208.6542
Email — steve@yourmortgages.ca
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