Financing Archives - Kitchener Mortgages, Waterloo Mortgages, Cambridge Mortgages

Bank of Canada maintains overnight rate at 0.25%

March 10, 2021

The Bank of Canada announced today that the overnight rate of 0.25% will hold. The Bank rate and deposit rate will hold at 0.50% and 0.25% respectively. The overnight rate is the interest rate at which major financial institutions borrow and lend money amongst themselves. The lower the overnight rate is, the less expensive it is for Canadian consumers to borrow money. Canada’s economy continues to recover from the coronavirus pandemic, exemplified by a GDP growth of 9.6% in the final quarter of 2020. GDP growth in the first quarter of 2021 is also expected to be positive, contradicting early forecasts in January. Consumers and businesses adapting to current restrictions and the continued surge of the housing market are key contributors to the recovery of the economy. While the economy has improved, there still remains economic slack given the uncertainty of the virus and the journey to economic growth. The …
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Bank of Canada Still Expects No Rate Increases Until 2023

January 21, 2021

Published by Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres For the original article, CLICK HERE. The Bank of Canada released its January Monetary Policy Report (MPR), showing they expect to keep overnight interest rates at its “effective lower bound” of 0.25% until 2023 (see chart below). To reinforce this commitment and keep interest rates low across the yield curve, the Bank will continue its Quantitative Easing (QE) program–buying $4 billion of Government of Canada bonds every week until the recovery is well underway. The central bank indicated it could pare purchases once the recovery regains its footing. According to the Bank’s press release, “The Governing Council will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In our projection, this does not happen until into 2023.” Officials are apparently optimistic about the economy’s prospects …
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Could the BoC be considering a micro cut to Canada’s overnight lending rate?

January 14, 2021

The chance of a “micro-cut” to the Bank of Canada’s overnight rate has increased due to the economic impact of the coronavirus pandemic. Industry experts are anticipating a cut of less than 25 basis points. The lower the overnight rate is, the less expensive it is for consumers to borrow money. The potential decrease in the rate is due to the need for more widespread financial stimulus to the Canadian economy, says Andrew Kelvin, chief Canada strategist at TD Securities. A micro-cut like this has not occurred since the implementation of the overnight rate in February 1996. A cut to the overnight rate could increase spending, as seen in the boost to the Canadian housing market due to historically low borrowing costs. The delayed rollout of the COVID-19 vaccine as well as the decline in jobs are the main factors of a slow Canadian economy in 2021. The Bank of …
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Fixed or variable? Revisiting the debate amid low rates

September 21, 2020

Courtesy of The Globe and Mail (Print Edition) For many consumers, the comfort of a fixed payment is worth the slightly higher interest costs, experts say Mortgage shoppers looking for the best rates this fall are also asking whether it’s best to go fixed or variable in the continued low interest-rate environment brought on by the economic fallout from the COVID-19 crisis. While rates that fluctuate with the market interest rate tend to win over those that are fixed for the duration of the mortgage term, experts say there’s no onesize-fits-all answer. “This topic is very personalized to each person’s own unique situation,” says Tracy Valko, principal mortgage broker and owner of Valko Financial Ltd. in Kitchener, Ont. “Mortgage products need to meet the needs of the client and what’s best suitedfor them.” Ms. Valko, who is secretary of Mortgage Professionals Canada, an industry association of mortgage brokers, …
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Payday Loans – The First Step into Perpetual Debt

April 13, 2020

From the desk of Matthew Shantz: Many years ago, during a different time in my life, I found myself facing a cash shortfall. I literally had the change in my pockets to get me through to my next pay day. Credit Cards were maxed, Bank Account was in Overdraft and my cupboards had a few boxes of pasta and my fridge some nearly expired milk. I wasn’t sure how I was going to pay my rent – living in Toronto, that rent was not cheap – let alone how I was going to keep myself fed. So, I did what everyone does in that situation, and look for a quick source of money without having to share my plights and desperation with family or friends. I was ashamed and embarrassed and did not want to share that I had gotten myself into that situation. I worked full time and had …
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Why Are Mortgage Rates Rising?

March 31, 2020

Over the past month, the Bank of Canada has lowered its overnight rate by a whopping 1.5 percentage points to a mere 0.25%. Many people expected mortgage rates to fall equivalently. The banks have reduced prime rates by the full 150 basis points (bps). But, since the second Bank of Canada rate cut on March 13, banks and other lenders have hiked mortgage rates for fixed- and variable-rate loans. That’s not what happens typically when the Bank cuts its overnight rate. But these are extraordinary times. The Covid-19 pandemic has disrupted everything, shutting down the entire global economy and damaging business and consumer confidence. No one knows when it will end. This degree of uncertainty and the risk to our health is profoundly unnerving. Most businesses have ground to a halt, so unemployment has surged. Hourly workers and many of the self-employed have found themselves with no income for an …
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Extraordinary Coordinated Policy Actions To Ease the Economic Impact of Pandemic In Canada

March 16, 2020

Prime Minister Justin Trudeau said Canada would introduce a “significant” fiscal stimulus package, as part of a coordinated effort with other Group of Seven countries to counter the virus-driven global economic slowdown and calm markets. In an exceptional press conference held at 2 pm today, Finance Minister Morneau sat at the side of the Governor of the Bank of Canada, and the head of the Office of the Superintendent of Financial Institutions (OSFI) to announce measures to soothe financial markets, boost confidence and support the Canadian economy. Only nine days after the Bank of Canada cut the overnight policy rate by 50 basis points to 1.25%, Governor Poloz announced another 50 bps reduction in the policy rate to a level of 0.75%. Here is the Bank of Canada’s official statement: “The Bank of Canada today lowered its target for the overnight rate by 50 basis points to ¾%. The Bank Rate is correspondingly …
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First-Time Home Buyers Incentive Program!

September 20, 2019

The new First-Time Home Buyers Incentive allows eligible first-time homebuyers, who have the minimum downpayment for an insured mortgage, to apply to finanace a portion of their home purchase through a form of shared equity mortgage with the Government of Canada. Lower monthly mortgage payments Interest-free incentive program No pre-payment penalty Newly constructed homes eligible for 5% or 10% Exisiting homes eligible for 5% Ready to get started? Contact us today

Income Properties – 570 News Ask The Experts, August 11, 2018

August 30, 2018

Check out Tracy and Marina’s interview with Dave Callender, focusing on flipping properties, rental homes and what it takes to finance these investments. A special thank you to EMpression: A Marketing Services Company for providing this image.

Do you need a financing condition?

May 4, 2018

by Sandra Rohfrietsch Let’s talk about financing conditions. The financing condition is a challenge for everyone purchasing in today’s market. Everyone wants their offer to be the most attractive, especially when the market that has yet to slow down. What you may not know, is that there can be some significant factors why your Mortgage Broker or Financial Advisor is pushing you to keep that financing condition in place; they have your protection in mind. We’re going to look at three main reasons why your financing condition is important: Property – There may be something about the property that you or even your Realtor are unaware of. Lenders and mortgage insurers (Canada Mortgage Housing Corporation or Genworth Canada) have access to details and information that can make or break the approval. For example, if the property is built on land in a flood risk zone, or the condo board …
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Category: Financing