http://www.ratebot.ca/blog/ Mortgage and Financial blog. All the latest news related to your personal finance. en-us Copyright RateBot.ca 2010-03-10T09:43:08+01:00 RateBot.ca Mortgage And Financial Blog http://www.ratebot.ca/blog/index.php#485 OTTAWA - The red-hot housing market in Canada isn't showing signs of slowing down as even more people say they plan on buying a home in the next two years, according to the Annual RBC Homeownership Study released Monday. According to the poll, the number of Canadians who said they are very likely to purchase a home in the next two years rose to 10 per cent from seven per cent two years ago. Respondents aged 18 to 24 were particularly enthusiastic, with those saying they were very likely to buy almost doubling to 15 per cent from eight per cent in 2009. After the record-low interest http://www.ratebot.ca/blog/index.php#485 http://www.ratebot.ca/blog/index.php#484 March 3, 2010 – Marlborough Stirling Canada is pleased to announce that MorWEB now provides exclusive access to ScoreMaker, a credit score analysis application that produces a simple, customized action plan to help your clients achieve a target credit score in the shortest time possible. ScoreMaker empowers you to be able to close more loans by analyzing your customers’ credit reports and presenting specific recommendations to help your clients improve their Beacon scores by suggesting both a short and long term solution. A few simple changes can make the difference between http://www.ratebot.ca/blog/index.php#484 http://www.ratebot.ca/blog/index.php#483 OTTAWA — Canadian home resale volumes slipped in January compared with December but came in far higher than the lowest levels in a decade, set in January 2009 as the country suffered through the global credit crunch and recession. The Canadian Real Estate Association says 25,671 homes were sold across the country in January, up 58 per cent from the same month a year earlier when consumer confidence hit a low ebb, drying up buying and lending activity. The national average price for homes listed on CREA's Multiple Listing Service was $328,537, up 19.6 per cent from a year http://www.ratebot.ca/blog/index.php#483 http://www.ratebot.ca/blog/index.php#482 TORONTO — Canada's central bank held its key interest rate at a record low 0.25 percent on Tuesday and reaffirmed that it expects it will keep the rate steady until July. But the bank also signaled it is getting closer to raising rates. The Bank of Canada said the 5 percent economic growth Canada saw in the fourth quarter was slightly higher than expected. It said growth has been "spurred by vigorous domestic spending and further recovery in exports" and cited low rates, increased confidence and global growth as reasons. The bank said the persistent strength of the Canadian http://www.ratebot.ca/blog/index.php#482 http://www.ratebot.ca/blog/index.php#481 The Bank of Canada left its key interest rate parked at 0.25 per cent on Tuesday morning, as just about everyone expected – but economists were quick to slice and dice the wording of the monetary policy statement for clues about the future direction of rates. After all, the March statement was not a carbon copy of the January statement, and a lot has changed between then and now: Like, the Canadian economy grew by 5 per cent in the fourth quarter, blowing past the central bank’s own forecast of 3.3 per cent growth. In Tuesday’s statement, the central bank left one http://www.ratebot.ca/blog/index.php#481 http://www.ratebot.ca/blog/index.php#480 What about the Canadian banking system allowed it to survive the recent worldwide slowdown without a single bank failure? What can the United States learn from Canada about sound banking? There were some significant differences between Canada and the United States during the recent financial crisis. In general, Canada’s banking system proved more prudent, more resilient, and much less prone to excesses. Taking a closer look at these differences might tell us how the United States got into the mess it is in, and illuminate some ideas for future reforms. Consider, for example, some http://www.ratebot.ca/blog/index.php#480 http://www.ratebot.ca/blog/index.php#479 When Toronto resident Celia Bernath files her annual income tax return, she includes a long list of deductions from her home-office income. After all, as a chartered accountant, she knows that travel, bank, postage, courier, utility and other charges and expenses are fair game for the micro-entrepreneur. But the item that sometimes has the most impact is deducting a proportion of her residential mortgage interest. “The mortgage-interest deduction — like other deductions — is based on the square footage of my office divided by the total square footage of the house. Keeping http://www.ratebot.ca/blog/index.php#479 http://www.ratebot.ca/blog/index.php#478 Home buying rush expected in spring Canada's housing market remained vibrant in January, though showed signs of cooling from December. Year over year, resales rose 58 per cent in January, though from a depressed state a year earlier, the Canadian Real Estate Association said today, and prices rose almost 20 per cent, bringing the national average to $328,537. From a record-setting December, though, January sales dipped 2.8 per cent. That may be the calm before the storm. Analysts expect a hot spring real estate market given Finance Minister Jim Flaherty's move to tighten mortgage http://www.ratebot.ca/blog/index.php#478 http://www.ratebot.ca/blog/index.php#477 ALEX CARRICK CanaData Chief Economist National housing starts have averaged 182,000 units annualized over the past four months, according to Canada Mortgage and Housing Corporation (CMHC). This is a giant step up from their low points of last year: 118,000 units in February and 112,000 units in April. CanaData is forecasting that starts for all of 2010 will be 180,000 units. This will compare with the 149,000-unit level in 2009. For the seven years 2002 through 2008 inclusive, annual starts averaged 222,000 units per year. In the last year of that exceptional run, they were 211,000 http://www.ratebot.ca/blog/index.php#477 http://www.ratebot.ca/blog/index.php#476 David Rosenberg: Demand has far outstripped new supply which is why prices have skyrocketed to new highs. But the building permit and housing start data are now suggesting that we are seeing a supply response -- just as what happened in the USA circa 2005 -- barely more than a year later, the demand and supply curves were mo David Rosenberg: I accept the premise that much of the overvaluation is in the urban areasd, especially Toronto and Vancouver. But I shudder somewhat because I recall all to well in 2005 and 2006 about how the bubbles were regional and concentrated in Florida and http://www.ratebot.ca/blog/index.php#476 http://www.ratebot.ca/blog/index.php#475 Dawn and Murray Franklin of Hamilton, Ont., are pretty good at buying properties. Over the past 10 years they have bought three houses and a fourplex. A fourth house will be added in April. But the Franklins are not flipping properties or moving up. They are living in one and deriving rental income from the others. Another thing they have been good at is piling on the debt. By this spring, they will be carrying about $600,000 in mortgages plus a line of credit. Ms. Franklin says the leveraging is manageable. They have run the doomsday scenarios numerous times and feel they can handle http://www.ratebot.ca/blog/index.php#475 http://www.ratebot.ca/blog/index.php#474 It’s probably time to start the countdown on interest rates going up. The Bank of Canada only pledged -- conditionally -- to keep its record-low lending rate until the end of the second quarter, so that leaves us with slightly more than four months before the housing market falls apart. At least that’s what some national magazines and economists predict will happen when rates start to rise. “Some people say they could go up in April, but I don’t buy that,” says Benjamin Tal, senior economist with CIBC World Markets and one of the more sane voices out there. http://www.ratebot.ca/blog/index.php#474 http://www.ratebot.ca/blog/index.php#472 OTTAWA — Although the recession may technically be over in Canada, many households sank even further into debt in 2009, creating the highest debt-to-income ratio ever seen in Canada, according to The Vanier Institute of the Family's annual assessment on the Current State of Canadian Family Finances released Tuesday. The study showed the average Canadian household debt climbed to $96,100, creating a debt-to-income ratio of 145 per cent in 2009, the highest it has ever been. "Under this scenario, some 1.3 million households could have a vulnerable or dangerously high debt service http://www.ratebot.ca/blog/index.php#472 http://www.ratebot.ca/blog/index.php#471 Canadian Finance Minister Jim Flaherty said the government is introducing tougher measures on mortgages to prevent a housing bubble from forming. The government plans to require all borrowers meet standards for a five-year fixed-rate mortgage, even if they opt for a loan with a lower rate and shorter term, Finance Canada said in a statement. This will help prepare for higher rates ahead. The maximum amounts that can be withdrawn in refinancing a mortgage has been cut to 90% from 95% and a minimum downpayment of 20% will be required for government-backed mortgage insurance on properties http://www.ratebot.ca/blog/index.php#471 http://www.ratebot.ca/blog/index.php#470 The Competition Bureau’s attempt to break up what it calls “anti-competitive” practices of the Canadian Real Estate Association could heat up the housing market even more because it will lead to lower commissions, says a Bay St. economist. “The Competition Bureau’s efforts toward opening up the Multiple Listing Service to greater competition could well ultimately serve to negate the impact of potential mortgage rule changes unless they are more material than debated,” says Derek Holt, an economist with the Bank of Nova Scotia. The federal government has http://www.ratebot.ca/blog/index.php#470 http://www.ratebot.ca/blog/index.php#469 There has been much official chest swelling over Canada's relatively strong performance during the financial crisis, but perhaps Canadians shouldn't -- if you'll excuse the mixing of metaphors -- be counting their chickens until they are sure that there are no black swans present. And in fact there does seem to be one dark, plump, bird looming around the back of economic barnyard: the Canada Mortgage and Housing Corporation. Or is that a turkey that should be renamed the Canada Moral Hazard Corporation? The CMHC was never given a cutesy acronym like its U.S. equivalents, http://www.ratebot.ca/blog/index.php#469 http://www.ratebot.ca/blog/index.php#468 The head of ING Direct Canada and several economists are warning Ottawa not to make abrupt changes to mortgage rules, lest that trigger the very thing everyone wants to avoid - a swooning housing market. While Ottawa should increase scrutiny of the Canadian real estate market, acting too quickly to impose new blanket rules on mortgages could have the unintended consequences of toppling the market, they say. Most expect the market will cool off by itself later this year even as some, including the Bank of Nova Scotia, acknowledge house prices are now in bubble territory. "High level, http://www.ratebot.ca/blog/index.php#468 http://www.ratebot.ca/blog/index.php#467 Brian Milner and Tara Perkins A bubble is a bit like the famous description of hard-core pornography uttered by the late U.S. Supreme Court justice Potter Stewart, who could not come up with a definition: “I know it when I see it.” Or do we? Bubbles remain hard to define, difficult to measure and, like recessions, can only be accurately assessed after they have burst. Economists have wrestled with bubbles for generations, but have yet to devise an adequate scientific means of analyzing them, comparing them or providing us with an early warning system that would safeguard from http://www.ratebot.ca/blog/index.php#467 http://www.ratebot.ca/blog/index.php#465 Call it what you want, but economists at Scotia Capital think the Canadian housing market is a bubble that faces downsides into next year – and the numbers continue to prove it. Teranet’s measure of Canadian housing prices, the closest equivalent to the U.S. S&P/Cash Shiller Home Price Index, was just 0.1% off its all-time record high in November 2009. “The gains are accelerating in recent months, and the December print is likely to firmly set a nationwide all-time record high,” Derek Holt and Karen Cordes said Wednesday. While Canadian house prices went down http://www.ratebot.ca/blog/index.php#465 http://www.ratebot.ca/blog/index.php#464 By Martin Shao, President of Valueland Mortgages 2009 is just behind us. What are your goals for 2010? Do you plan to buy your home? Do you still have a mortgage? If your answers are “yes” to the last two questions, then read on for 2010 mortgage strategies. These seven strategies will help you save money and pay off your mortgages faster. Strategy 1: Re-review Your Mortgage 2009 was seen with the lowest interest rates in Canadian history. Is your current mortgage good for you in 2010? Is the mortgage payment still manageable for your income situation? Factors such as economic http://www.ratebot.ca/blog/index.php#464 http://www.ratebot.ca/blog/index.php#463 Canadians are doing a decent job of managing their debts even though they are borrowing more than ever before, says the chief executive of this country's largest bank. Royal Bank of Canada's Gord Nixon told an industry conference Thursday that while Canada's housing market boom is fuelling personal loan growth, the quality of assets underlying consumer debt here is "extremely different" than in the United States. "There is no question that we watch very carefully personal or household debt," Nixon told delegates. "Not only do we have lower levels of household debt, that household debt http://www.ratebot.ca/blog/index.php#463 http://www.ratebot.ca/blog/index.php#462 Bank of Canada maintains overnight rate target at 1/4 per cent and reiterates conditional commitment to hold current policy rate until the end of the second quarter of 2010 OTTAWA — The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent. The Bank Rate is unchanged at 1/2 per cent and the deposit rate is 1/4 per cent. The global economic recovery is under way, supported by continued improvements in financial conditions and stronger domestic demand growth in many emerging-market economies. While the outlook for global growth through http://www.ratebot.ca/blog/index.php#462 http://www.ratebot.ca/blog/index.php#461 Ontario Teacher's Pension Plan has started the new year with a new acquisition. The pension plan announced that it's the lead sponsor to buy American International Group Inc's (AIG) Canadian mortgage insurance business. No price tag was given with the deal. “We believe the mortgage insurance industry in Canada to be an attractive market, and that United Guaranty Canada is well positioned to grow its market position,” said Erol Uzumeri, senior vice-president, Teachers’ Private Capital, said in a statement. Mr. Uzumeri had signaled earlier this year http://www.ratebot.ca/blog/index.php#461 http://www.ratebot.ca/blog/index.php#450 Homeowners are being warned any rise in interest rates risks putting a financial squeeze on the large number of debt-laden Canadians who took out variable mortgages at rock-bottom rates. "Canadians are potentially leaving themselves wide open for significant financial obligations once interest rates begin to rise," the Mortgage Brokers Association of B.C. said in a statement Wednesday. This was on top of a warning from Bank of Canada Governor Mark Carney that Canada "must be vigilant" in containing the threat rising rates would have on increasing the debt-servicing costs for Canadians who http://www.ratebot.ca/blog/index.php#450 http://www.ratebot.ca/blog/index.php#377 An insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan is known as mortgage insurance. This type of insurance can be private or public depending on the insurer. Let’s say you decide to purchase a house which costs $175,000. You pay 5% ($8,750 down payment) and take out a $166,250 mortgage. Most lenders will demand mortgage insurance for loans which exceed 80% of the property’s sale price. Due to your limited equity, the lender requires that you purchase mortgage insurance that protects the lender against default. The lender http://www.ratebot.ca/blog/index.php#377 http://www.ratebot.ca/blog/index.php#376 There are certain things that are more important than others when you’re applying for a mortgage. For instance, the Raptors finally getting a team around Chris Bosh; sure it’s important but it won’t help you secure the perfect mortgage package. What will? A strong credit score of course! Most people tend to overlook their credit score when assessing their financial situation. However, you can obtain a copy of your credit report at any time. The request by the consumer is noted in the credit report but it does not by any means affect your credit score. You’ll even be http://www.ratebot.ca/blog/index.php#376 http://www.ratebot.ca/blog/index.php#375 The increase in Australia’s key lending rate has led investors to believe that Canada will have to increase rates sooner rather than later. This expectation was priced into the Canadian Bond Market on Thursday and Friday of last week. The increase should translate into higher fixed mortgage rates before the end of the week. Please do not be alarmed. This is a natural reaction to Australia’s move, the stronger than expected employment numbers from Canada and our robust housing market. Although these economic indicators would lead us to believe that the Bank of Canada must http://www.ratebot.ca/blog/index.php#375 http://www.ratebot.ca/blog/index.php#358 Rising rates could sink many Canadians The Bank of Canada is keeping its benchmark interest rate at a record low but is warning Canadians that what goes down will eventually go up. Homeowners have used rock-bottom rates to take on larger mortgages but a report from the central bank warns that rising debt levels will make households more vulnerable when interest rates eventually rise. Frank Atkins, Senior Economist at the University of Calgary is questioning the validity of the banks warning and believes the Bank of Canada is losing credibility with this latest warning. Atkins http://www.ratebot.ca/blog/index.php#358 http://www.ratebot.ca/blog/index.php#355 Sales of existing houses rose 74 percent in October from the January low, with prices up 21 percent from a year ago to a record C$341,079 ($323,203), partly because of Carney’s promise -- the only date-specific commitment from a Group of 20 central banker. To prevent the economy from overheating, Carney will raise his benchmark rate by 125 basis points to 1.5 percent in 2010, while Federal Reserve Chairman Ben S. Bernanke will keep his key rate at 0.25 percent, said Stephen Gallagher, chief U.S. economist in New York at Paris-based Societe Generale SA. “The worry has got to be http://www.ratebot.ca/blog/index.php#355 http://www.ratebot.ca/blog/index.php#349 Canada's banks are earning a lot of money again, and are poised to earn a whole lot more. A little more than a year ago, bankers were accusing Bank of Canada governor Mark Carney of harming their profitability by decreasing key interest rates at a time when their own borrowing costs were rising because of the financial crisis. Since then, the crisis has dissipated and Ottawa has bought more than $60-billion in mortgages to help lower their funding costs. With fewer competitors, the major chartered banks have raised the prices on a number of loans. All of that is giving a major boost to http://www.ratebot.ca/blog/index.php#349 http://www.ratebot.ca/blog/index.php#345 OTTAWA — Canada has survived The Great Recession, but its effects will weigh on this country’s fortunes for years to come, says Ed Safarian, one of Canada’s most highly regarded economists and the author of a seminal text on how this country endured the Great Depression. “This is going to be a period of no growth and false recoveries that don’t last,” says Mr. Safarian, professor emeritus of business economics at the University of Toronto’s Rotman School of Management. His classic text, The Canadian Economy in the Great Depression, is now being http://www.ratebot.ca/blog/index.php#345 http://www.ratebot.ca/blog/index.php#342 The cost of government bonds and their yield is among the major factors that influence variable and fixed Canadian mortgage rates. Bonds are actually a safe way of investing than stocks. When there is an irregular economy, the investors will benefit from the government bonds. When the market bull is going up, investors normally make a great gain. This leads to lower demand for bonds deteriorating their yields and value. When the economy of Canada becomes unstable and the stocks are not that attractive, the demands for bonds rises and their yields drop. A lot of economics is involved http://www.ratebot.ca/blog/index.php#342 http://www.ratebot.ca/blog/index.php#341 Despite warnings from some bankers that consumers should be prudent when taking on household debt, Canadians are gaining a healthier appetite for risk and taking on longer-term mortgages. A survey released Monday by the Canadian Association of Accredited Mortgage Professionals shows 18 per cent of mortgages are long-term, compared with 16 per cent a year earlier and 9 per cent in 2007. "If consumers stretch themselves too far this could be a problem later on," housing economist Will Dunning, the author of the report, said. Some in the industry have expressed concern that consumers are http://www.ratebot.ca/blog/index.php#341 http://www.ratebot.ca/blog/index.php#340 The Canadian housing market may look like a bubble, but low interest rates, a relative shortage of new supply and mortgage innovation should keep it going for some time to come. Instead of looking at affordability calculations or house prices on their own, it is far more telling to see how the value of housing assets compares to various benchmarks. Economists at Scotia Capital suggests a price-to-earnings proxy that involves comparing prices to rent, where rent is the equivalent income stream to housing as corporate earnings are to equities. This compares the choice of owning versus http://www.ratebot.ca/blog/index.php#340 http://www.ratebot.ca/blog/index.php#339 Condominium construction revved back to life last month, pushing Canadian housing starts to the highest level this year. Starts rose 5.4 per cent to a seasonally adjusted 157,300 units in October, Canada Mortgage and Housing Corp. said yesterday. Starts on multiunit buildings jumped 13.8 per cent from a month earlier, while starts for single dwellings fell 2.7 per cent. Low borrowing costs have spurred construction activity in recent months after a sharp drop earlier this year. Economists expect the pace to continue into next year as the Bank of Canada keeps interest rates at a record low http://www.ratebot.ca/blog/index.php#339 http://www.ratebot.ca/blog/index.php#336 Housing markets across the Lower Mainland are headed higher next year, Canada Mortgage and Housing Corp. predicts. A combination of more sales and fewer active listings will push average house prices higher in 2010, CMHC said yesterday. "Home prices in most Lower Mainland centres are still below their previous peak," CMHC senior market analyst Robyn Adamache said. "Prices will rise as buyers take advantage of lower prices and favourable mortgage-interest rates." In 2010, average MLS prices in the Vancouver area are forecast to rise to $605,000 from $580,000. Vancouver's average MLS http://www.ratebot.ca/blog/index.php#336 http://www.ratebot.ca/blog/index.php#334 Housing starts have begun to recover and should improve in the second half of 2009, according to the Canada Mortgage and Housing Corporation. However, the CMHC also warned in its newly released report that the high level of activity in the first part of 2009 was the result of delayed transactions and would not likely continue at such a pace. In its fourth-quarter "Housing Market Outlook," CMHC forecast that starts would reach 141,900 for the year and 164,900 for 2010. Sales of existing homes are also predicted to increase from 441,300 units in 2009 to 445,150 units in 2010. The average http://www.ratebot.ca/blog/index.php#334 http://www.ratebot.ca/blog/index.php#319 Interest rates are very low, almost everyone who holds a mortgage is thinking about refinancing to lower their monthly payments and interest paid. One of the major road blocks is the penalty imposed by mortgage lenders. In some instances the penalty maybe $50,000 or higher, making the refinancing seem irrational. Simple calculations will reveal the fact that even taking the substantial penalties into account mortgage refinancing may still be beneficial. This guide will illustrate the step by step process of lowering the discharge penalty. Prior to proceeding secure the following http://www.ratebot.ca/blog/index.php#319 http://www.ratebot.ca/blog/index.php#316 Why are businesses leaving Toronto? The answer is the increase in taxes on all levels. Toronto is now listed as dead last on a recent list ranking entrepreneurial cities. The list of 96 cities has downtown Toronto in last place but the 905 Greater Toronto Area (GTA) is 33rd on the list. Most companies need to be close to the downtown core but can no longer cover the expenses involved with locating themselves downtown. One building had yearly property taxes between $4000 to $600 from 1992 to 2005 but was recently re-assessed and the owner now pays property taxes of $27 000. The only way for http://www.ratebot.ca/blog/index.php#316 http://www.ratebot.ca/blog/index.php#315 This weeks top stories include how the downtown core is no longer the business friendly place it used to be, how the U.S is expected to take another hit, how commercial real estate is finally bouncing back, how the loonie fell over strong words, how the Bank of Canada is all talk, how majority of renovations will be in cash, how there’s been a raise in growth forecast for the world, and how Carney threatens to make a move on the dollar agian. Read all the articles http://www.ratebot.ca/blog/index.php#315 http://www.ratebot.ca/blog/index.php#314 OTTAWA–Bank of Canada Governor Mark Carney is warning homebuyers against taking on too much debt because today's low interest rates will not last forever. "People should manage their affairs prudently in anticipation that, at some point, rates will return to a more normal level," Carney said after releasing his quarterly economic review. "Obviously, rates are exceptionally low," he said, noting that the central bank has used its interest-rate-setting influence to drive down consumer borrowing costs to record lows to help stimulate economic activity. At the same time, Carney http://www.ratebot.ca/blog/index.php#314 http://www.ratebot.ca/blog/index.php#310 Ottawa has been creating a housing bubble in Canada with taxpayer money which is why residential real estate prices rise in defiance of high unemployment and recession.Ottawa's low interest rate policy and crown agency Canada Mortgage and Housing Corporation's dramatic increase in mortgage backstopping, for people who put only 5% down, have pushed upward activity and prices.Some, such as Post reader and accountant, Derek Bruce, worry that the Tories are allowing CMHC to become like Freddie and Fannie south of the border, a rogue financial institution the size of one of our big five http://www.ratebot.ca/blog/index.php#310 http://www.ratebot.ca/blog/index.php#309 The Bank of Canada announced Tuesday it has kept its key lending rate at 0.25%. Mark Carney, the central bank's governor, has repeatedly pledged to keep the rate unchanged until the middle of next year, although the soaring loonie has been a cause for concern. Here's what economists had to say about the rate decision: Paul Ferley, assistant chief economist, RBC Economics Research The statement characterizes the Canadian economy as one where recovery is underway. A return to growth is being supported by “monetary and fiscal stimulus, increased household wealth, improving http://www.ratebot.ca/blog/index.php#309 http://www.ratebot.ca/blog/index.php#303 The federal government has quietly given Canada Mortgage and Housing Corp. more financial muscle, raising concerns the multibillion-dollar agency is expanding at an unprecedented pace with little oversight. For the second time since the beginning of 2008, Ottawa has raised the amount of mortgage insurance CMHC can have outstanding. The increase moves the cap to $600-billion, up from $450-billion and nearly double the $350-billion limit in place at the end of 2007. CMHC is by far the largest provider in Canada of default insurance on mortgages, which home buyers are legally required to have http://www.ratebot.ca/blog/index.php#303 http://www.ratebot.ca/blog/index.php#301 One of Bay Street’s more insightful commentators suggests the Bank of Canada will keep its benchmark policy rate at 0.25% for longer than people think – with increases not beginning until the final quarter of next year.Eric Lascelles, chief economics and rates strategist at TD Securities, says the central bank has quite the juggling act on its hand, with a red-hot domestic economy (as exemplified by existing home sales) on one hand and a weak trade sector, due to tepid U.S. demand and a toasty Canadian dollar, on the other. The central bank has set its key policy rate at a http://www.ratebot.ca/blog/index.php#301 http://www.ratebot.ca/blog/index.php#298 For the first time since Jason Pilon began selling houses two years ago, he's fielding questions from anxious clients about rising mortgage rates. The Ottawa-based real estate agent has sold nearly 100 properties this year as historically low rates fuelled a buying frenzy in the city, with house-hunters rushing to take advantage of easy money. The same trend has played out across many parts of Canada over the past few months, but higher rates set this week by the country's biggest banks may soon cool a hot market – and do a favour for Bank of Canada Governor Mark Carney. The http://www.ratebot.ca/blog/index.php#298 http://www.ratebot.ca/blog/index.php#291 OTTAWA – Each of Canada’s big banks is increasing the cost of taking out a mortgage. On Tuesday, Canadian Bank of Commerce, Bank of Montreal, Bank of Nova Scotia and Toronto-Dominion Bank all announced a series of rate raises. The changes were to take effect Wednesday. Those announcements followed one by Royal Bank of Canada on Friday about a series of rate hikes that were to take effect Saturday. While there were some differences in the details of changes made by the banks to their mortgage rates, the announced hikes put all their five-year fixed closed rates at 5.84 per http://www.ratebot.ca/blog/index.php#291 http://www.ratebot.ca/blog/index.php#285 OCTOBER 2009 Speculation and opinions in the housing market trend are all but the same baseless predictions. There are no guarantees that changes will occur in the next 2 to 5 years. The low interest rates drove the homebuyers crazy purchasing home property value's at sky's the limit. For example: a single-detached home with original price of $250,000.00 was for sale today at $560,000.00, homebuyers' must offer upto 15% on top of the asking price to close the deal. Homebuyers' foresee an increase in the bank's interest rate in the coming months will give them a http://www.ratebot.ca/blog/index.php#285 http://www.ratebot.ca/blog/index.php#281 Central Bank may want to prevent too much property speculation By Paul Vieira, Canwest News ServiceOctober 6, 2009 The possibility exists that the Bank of Canada might raise its key interest rate before inflation hits its preferred target should the housing market continue its red-hot performance, economists at Toronto-Dominion Bank said Tuesday. "The Bank of Canada will likely be watching developments in Canadian real estate quite closely," said economists Craig Alexander and Grant Bishop. "If surging existing home sales do not cool, the bank may be http://www.ratebot.ca/blog/index.php#281 http://www.ratebot.ca/blog/index.php#278 A CIBC report says that spurred by low interest rates, Canadians added $44-billion to their total debt in the first half of the year even as interest payments fell by $3-billion. Household credit is defying gravity in Canada, expanding by more than 7 per cent year-over-year, a new analysis says. “On an inflation adjusted basis, credit is rising at the fastest rate seen in any economic recession in the post-war era,” Benjamin Tal, senior economist with CIBC World Markets, wrote in report published Tuesday. The main driver is low interest rates. Even as Canadians added http://www.ratebot.ca/blog/index.php#278 http://www.ratebot.ca/blog/index.php#273 House hunters still waiting for prices to drop further before buying may have sat on the sidelines too long, according to a new report. A Re/Max study released Thursday shows home values in some major markets across Canada have recovered to levels where they were before the recent market drop. Economists agree and say the power has shifted to a seller's market in recent months, after the buyer's were in control for more than a year. "(The) bounce back that began in early spring has made this recession one of the shortest on record for real estate," said the Re/Max "Bricks and http://www.ratebot.ca/blog/index.php#273 http://www.ratebot.ca/blog/index.php#270 Been there, done that is an oft-quoted line about the joys of round-trip tourism. It's also a line that can be used about the terms of the latest issue of Canada Mortgage Bonds, a $7-billion financing that closes on Wednesday. How come? One year after the global credit crisis started, Canada Housing Trust, a special purpose entity of Canada Mortgage and Housing Corp., has issued five-year bonds at the tightest spread to government of Canada bonds for two years. Accordingly if a tourist has been away for the past two years, the old reality is now the new reality. On CHT's latest http://www.ratebot.ca/blog/index.php#270 http://www.ratebot.ca/blog/index.php#269 In the past, many immigrants to Canada came by sea - often landing at Pier 21 in Halifax. Nowadays, as a new Canadian, you are more than likely to touch down at Pearson International Airport after a journey of several hours rather than days or weeks. Either way, once on the ground, making a financial start has always been a tough route. Thankfully, today's evolution of technology makes it easier to prove your creditworthiness in Canada, and to qualify for a mortgage in order to buy your first home here. "One of the key things ... is credit. You have to find some sort of credit http://www.ratebot.ca/blog/index.php#269 http://www.ratebot.ca/blog/index.php#263 led by part-time work and among private sector employees. The unemployment rate edged up 0.1 percentage points to 8.7% as more people participated in the labour market. Since employment peaked in October 2008, total employment has fallen by 387,000 (-2.3%). The trend in employment, however, has changed recently. Over the last five months, employment has fallen by 31,000, a much smaller decline than the 357,000 observed during the five months following October 2008. Note to readers The Labour Force Survey (LFS) estimates are based on a sample, and are therefore subject to sampling http://www.ratebot.ca/blog/index.php#263 http://www.ratebot.ca/blog/index.php#260 Sept. 9 (Bloomberg) -- Canadian housing starts rose more than expected in August on construction of both single- and multiple-unit homes, adding to evidence the country’s housing industry is rebounding. The total of 150,400 units on an annualized basis, the fastest so far in 2009, compares with a revised 134,200 units in July, Canada Mortgage and Housing Corp. said today from Ottawa. Economists anticipated the pace of starts would be 139,500 units, according the median of 20 responses in a Bloomberg survey. Recent data on Canada’s housing market, which the Bank of Canada said in http://www.ratebot.ca/blog/index.php#260 http://www.ratebot.ca/blog/index.php#246 The housing-price bubble that burst so explosively in the United States is compelling evidence that the economy needs adult supervision. As the U.S. tries to find a new way to provide prudent government oversight of major financial institutions, Canada will be making no such change, Finance Minister Jim Flaherty has signalled. This is a sound application of the principle known as "it ain't broke, so don't fix it." Canada has had no bank panic, no huge wave of foreclosures, no tottering financial titans. Shrinking exports, growing unemployment, and swelling government deficits have http://www.ratebot.ca/blog/index.php#246 http://www.ratebot.ca/blog/index.php#239 TORONTO — The Canadian economy contracted at a 3.4 percent annual pace in the second quarter, an improvement from the first three months of the year, the government said Monday. Statistics Canada said the economy actually grew in June by 0.1 percent, the first monthly increase in almost a year. Canada's central bank and many analysts think the economy is starting to grow again in the current quarter. The 3.4 percent drop in gross domestic product for the April-to-June period follows the biggest drop on record in the first three months of this year. The economy plunged at a http://www.ratebot.ca/blog/index.php#239 http://www.ratebot.ca/blog/index.php#210 FINANCIAL SERVICES REPORTER Canadian banks, bolstered by surprisingly strong demand for housing and robust trading businesses, are breaking profit records in the midst of a recession. Royal Bank of Canada , National Bank of Canada and Toronto-Dominion Bank all reported earnings that topped analysts' expectations yesterday. The first two actually managed to churn out higher profits than ever before despite the economic gloom. "At the beginning of 2009 I would have found it hard to believe that by the third quarter I'd be talking about year-over-year increases in our earnings per share, http://www.ratebot.ca/blog/index.php#210 http://www.ratebot.ca/blog/index.php#201 TORONTO — The Bank of Canada is unlikely to hike interest rates until 2011 because the lingering effects of the global economic meltdown will continue to mute both growth and inflation, according to a report issued Tuesday by CIBC World Markets. "While the 2009 recession may already be over, the slack it created is both large and likely to persist," said CIBC chief economist Avery Shenfeld. "Unlike the Bank of Canada, we don't expect growth to average above the non-inflationary potential until 2011," Shenfeld added. "But even under (Bank of Canada) Governor (Mark) Carney's more http://www.ratebot.ca/blog/index.php#201 http://www.ratebot.ca/blog/index.php#200 OTTAWA — Canada's annual inflation rate slid to the lowest level in 56 years last month, dropping more than expected for the second straight month to set overall prices 0.9 per cent lower than last year, Statistics Canada reported Wednesday. The fall on a month-to-month basis was even more dramatic, as prices in July fell 0.3 per cent from the previous month, reversing the similar monthly increase registered in June. Still, economists say there is little concern that deflation - a broadbased and persistent decline in prices that could inflict further damage on the economy - is setting http://www.ratebot.ca/blog/index.php#200 http://www.ratebot.ca/blog/index.php#197 Housing starts in British Columbia fell by 10 per cent in July from the previous month, Canada Mortgage and Housing Corporation said yesterday. But that trend is expected to reverse for the rest of the year, as demand picks up and some buyers rush to close a deal before the province's new harmonized sales tax takes effect on July 1, 2010. “Generally, when a tax is announced like this, there could be a pickup in sales activity prior to the implementation of the tax,” Carol Frketich, a regional economist with CMHC, said yesterday. “But to discern it from a regular pickup in http://www.ratebot.ca/blog/index.php#197 http://www.ratebot.ca/blog/index.php#187 Economists are expecting lukewarm economic data for Canada over the coming week -- numbers that, while not great, could be worse. Despite some of the optimism created by the Bank of Canada's recent assertion that the recession is over, as well as gains on the stock market, Canadians should be prepared for less-than-ideal economic news after the greater-than-expected 44,500 jobs lost last month. On Tuesday, Canada Mortgage and Housing Corp. is slated to report housing starts for July. The consensus among analysts is that the level stayed relatively flat at an annual rate of just more than http://www.ratebot.ca/blog/index.php#187 http://www.ratebot.ca/blog/index.php#178 Canwest News Service Without a lot of us noticing here in Canada, homeowners across North America have just passed a milestone that foreshadows happier days not only for them but for the whole economy. The price of homes in both the U.S. and Canada has finally stabilized, clearing the way for many shoppers to unlock their wallets and for shaky U.S. banks to lend more freely, helping to sustain and expand a fragile recovery. In Canada, prices moved up slightly in May over April after eight straight months of decline, as measured by the Teranet-National Bank House Price Index. This index is http://www.ratebot.ca/blog/index.php#178 http://www.ratebot.ca/blog/index.php#171 EVEN the Bank of Canada isn’t going to venture an opinion on when the summer of rain will end. But the central bank was prepared Thursday to say the great recession is over in Canada, at least in the technical sense that it expects the economy to begin growing again in the current quarter. The stock market responded with a rally, the equivalent of a munchkin-like cheer that "Ding-dong the wicked witch is dead!" The public as a whole will be more restrained, knowing too well that unemployment, the indicator that means most to them, is a slower symptom to heal, and isn’t expected http://www.ratebot.ca/blog/index.php#171 http://www.ratebot.ca/blog/index.php#166 The Bank of Canada is taking a brighter view of the economy, citing stronger-than-expected household spending. Policy makers said Tuesday that Canada's gross domestic product would shrink 2.3 per cent this year, compared with an earlier estimate in April that the economy would contract 3 per cent. GDP will expand 3 per cent next year, compared with an earlier call for growth of 2.5 per cent next year, the Bank of Canada said in its latest policy statement . As expected, the central bank recommitted to leaving its benchmark interest rate at a record low of 0.25 per cent through to the http://www.ratebot.ca/blog/index.php#166 http://www.ratebot.ca/blog/index.php#160 July 14 (Bloomberg) -- Canadian sales of existing homes rose for a fifth month in June, adding to evidence that record low borrowing costs are fueling housing demand. Sales rose 8.7 percent to 41,304 homes from the previous month on a seasonally adjusted basis, the Canadian Real Estate Association said today in a statement from Ottawa. Average home prices rose 3.6 percent from a year earlier and the inventory of unsold homes fell to its lowest since August 2007. Recent data on Canada’s housing market suggest the Bank of Canada’s efforts to stimulate spending with interest rate http://www.ratebot.ca/blog/index.php#160 http://www.ratebot.ca/blog/index.php#161 The number of bankruptcies in Canada in May was 31 per cent higher than a year ago, as overburdened consumers facing job loss or lower incomes find they can't make ends meet. May wasn't as bad as April; compared to a month earlier, the number of bankruptcies fell 9.6 per cent. And the number of companies going bankrupt has been declining steadily, according to new data from the Office of the Superintendent of Bankruptcy Canada. But companies seem to be staving off bankruptcy by deeply slashing their payrolls – driving more and more consumers into personal financial http://www.ratebot.ca/blog/index.php#161 http://www.ratebot.ca/blog/index.php#159 Canada’s housing market has become so much more grounded since the ugly property bust of the last recession that this time around it is one of the most resilient sectors of the economic downturn. The lessons learned from the housing bust of the early 1990s helped prevent Canada from being tempted down the subprime path that devastated the United States and, combined with record low interest rates and government stimulus, has caused the impact of the latest slump to be less severe and relatively short-lived, figures released Tuesday underscore. "The turnaround in Canadian housing this http://www.ratebot.ca/blog/index.php#159 http://www.ratebot.ca/blog/index.php#157 OTTAWA — Bank of Canada governor Mark Carney has a lot of explaining to do this week. With the central bank due to issue the scheduled interest rate announcement Tuesday and the quarterly Monetary Policy report on Thursday, economists and investors are awaiting what Carney has to say about what looks like an economy on a razor's edge between recession and recovery. Tuesday's headline decision on interest rates is a no brainer. As the central bank announced in April, the policy rate is to stay at the practical 0.25 per cent floor until at least next spring barring any nasty surprises. http://www.ratebot.ca/blog/index.php#157 http://www.ratebot.ca/blog/index.php#150 July 15 (Bloomberg) -- The Canadian government bought C$2.33 billion ($2.08 billion) of mortgages from banks, less than the C$4 billion it had offered, as part of a program to encourage new lending. Canada Mortgage and Housing Corp., a state-run agency, announced the purchase today on its Web site. The transaction is aimed at helping banks fund new loans to consumers and businesses. Finance Minister Jim Flaherty began the program with a plan to buy just C$25 billion, later expanding it to as much as C$125 billion. The average yield on the transaction was 3.13 percent. Canada Mortgage and http://www.ratebot.ca/blog/index.php#150 http://www.ratebot.ca/blog/index.php#139 Canada's housing market has rebounded from an "awful winter" and could be poised to stabilize by the end of the year, one of the nation's largest real estate firms said Tuesday. In its market survey forecast, Royal LePage revised its outlook for the national housing market, predicting a two-per-cent decline to an average house price of $297,500 by the end of the year. That's slightly higher than the $297,000 the company was forecasting in January. The company is forecasting a one-per-cent drop in unit sales, to 430,000. That's also slightly higher than its January forecast of 416,000 sales http://www.ratebot.ca/blog/index.php#139 http://www.ratebot.ca/blog/index.php#141 Construction of new homes has surged by a surprising eight per cent in June, prompting analysts to say the housing market in Canada has turned the corner and begun recovering. The annual pace of housing starts rose to 140,700 units in June from 130,300 in May, with the increase in activity spread across different types of buildings, said the national housing agency, Canada Mortgage and Housing Corp. “The increase in housing starts in June is broadly based, encompassing both the singles and multiples segments,” said Bob Dugan, chief economist at CMHC . “In addition, http://www.ratebot.ca/blog/index.php#141 http://www.ratebot.ca/blog/index.php#136 The worst of Canada's housing market woes appear to be past but the sector's rebound will be tenuous as a rise in mortgage rates and high unemployment limit the recovery in prices and sales. Property experts say first-time buyers and Bank of Canada rate cuts have helped restore stability to a market that slumped from late 2008 to early this year, when the worst leg of the global financial crisis battered consumer confidence. “We should be less fearful than we were six months ago, but I don't think we should be exuberant yet. The resale markets in Canada are very strong. May numbers http://www.ratebot.ca/blog/index.php#136 http://www.ratebot.ca/blog/index.php#135 Federal Finance Minister Jim Flaherty has touted Canada’s banking system as the best in the world in the past few months, but the latest rankings from a top financial publication show that not every member of the Big Six has been as lucky in escaping the global financial crisis. Contrary to Mr. Flaherty’s rhetoric, no Canadian banks made it into the top 30 of The Banker magazine’s annual list of 1,000 banks, sorted by capital strength, released on Tuesday. Capital strength, as defined by the Financial Times magazine, includes only the core of a bank’s strength: http://www.ratebot.ca/blog/index.php#135 http://www.ratebot.ca/blog/index.php#134 The Week — There is no shortage of bad news and hurdlesthat could prolong the economic retrenchment underway,and potentially dampen recovery prospects. But more andmore indicators are pointing to renewed growth reemergingin the second half of the year, and continuingthrough 2010, with the support provided by massivemonetary and fiscal stimulus around the http://www.ratebot.ca/blog/index.php#134 http://www.ratebot.ca/blog/index.php#132 Canada’s vaunted conservative banking culture offers its financial institutions a competitive advantage during economic downturns, but the edge they now enjoy over their global counterparts will likely disappear in about a year, says a top U.S. banker. Robert P. Kelly, chairman and chief executive of Bank of New York Mellon, told a Toronto audience Wednesday that Canadians “should be proud” of their financial system because the “hard-core reality is that it’s a system that works.” However, the 56-year-old head of the fifth-largest bank in the United http://www.ratebot.ca/blog/index.php#132 http://www.ratebot.ca/blog/index.php#126 The Canadian housing market is beginning to look like a large jumbled puzzle. A week after a report showed the price of an average house had soared to a record high, an alternate report suggested Wednesday prices have in fact declined for five consecutive months. Both sources are respectable, and their data accurate. But different methodology has led to a discrepancy between the figures. So where does the Canadian housing market stand? Economists and those in the real estate industry believe conditions fall somewhere in the middle. The price of a Canadian home was down 6.7% in April from a http://www.ratebot.ca/blog/index.php#126 http://www.ratebot.ca/blog/index.php#122 It looks like a miraculous resurrection. In the midst of recession, the average national price of Canadian resale homes hit a record level in May, and sales activity increased for the fourth consecutive month. While U.S. residential real estate prices have been falling for almost three years, Canada seems to have stumbled and picked itself up again in a span of 12 months. To some real estate agents, the market looks as good as it did before the global financial crisis began to bite last summer. “Without getting nitpicky, yes it does,” said Toronto real estate agent Laurin http://www.ratebot.ca/blog/index.php#122 http://www.ratebot.ca/blog/index.php#123 — Canada's annual inflation rate fell to virtually zero last month as the lower cost of energy and other activities drove overall prices down. Statistics Canada said Thursday overall annual inflation stood at 0.1 per cent in May, falling from 0.4 per cent the previous month. That is the lowest Canadian inflation has been since November 1994, when it fell to minus 0.1 per cent. Soaring oil and gasoline prices at this point last year were the main contributors to falling inflation, and will be until July, when world oil peaked at over US$145 a barrel. Gasoline prices were 25.1 per http://www.ratebot.ca/blog/index.php#123 http://www.ratebot.ca/blog/index.php#113 With interest rates hovering near dramatic lows, many Canadian home owners have been taking advantage of rock-bottom mortgage rates to break their existing contracts and refinance at a lower rate. But mortgage rates rose quickly and dramatically last week, leading some to wonder if they have missed the sweetest mortgage recession sale in recent history. Despite last week's increase, and the penalties associated with breaking the contract, mortgage brokers say that many home owners can still trim their payments. Gary Siegle, a manager at mortgage broker Invis, joined us on Tuesday for a http://www.ratebot.ca/blog/index.php#113 http://www.ratebot.ca/blog/index.php#110 Culturally, we strive to pay off our mortgages as quickly as possible and our banks compete on features such as weekly or bi-weekly payments with further options to increase regular payments or make lump-sum payments. Americans aren't nearly as inclined to pay off their mortgages quickly, which probably has a lot to do with the fact their tax code allows mortgage interest to be deductible. From a regulatory standpoint, Canadian homebuyers borrowing more than 80 per cent of the purchase price of the home are subject to minimum downpayment (5 per cent), maximum amortization periods (35 years) http://www.ratebot.ca/blog/index.php#110 http://www.ratebot.ca/blog/index.php#104 The days of ridiculously cheap mortgage rates appear to be over. Now they're just cheap. A sudden and dramatic jump in rates from Wednesday to Thursday means Canadians looking to break their existing mortgage and refinance at a lower rate may have missed the sweetest spot in recent history. But that doesn't mean people can't still trim their payments. “We are not going to see these rates again for a while, not in the immediate horizon and maybe never,” says Gary Siegle, a Calgary-based manager at mortgage broker Invis. “But rates are still at historical lows. Depending http://www.ratebot.ca/blog/index.php#104 http://www.ratebot.ca/blog/index.php#91 THE CANADIAN PRESS OTTAWA – There are signs that Canada's economy has stabilized, Finance Minister Jim Flaherty said today as a major international think-tank cited Canada among countries in the leading-edge of recovery. The minister's remarks came as the Organization for Economic Co-Operation and Development named Canada among four industrialized countries showing signs of having reached a bottom in the economic downturn. The OECD cautioned it was still too early to say definitively whether the signs of improvement were "temporary or a more durable turning point," but said http://www.ratebot.ca/blog/index.php#91 http://www.ratebot.ca/blog/index.php#86 OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent. The Bank Rate is unchanged at 1/2 per cent and the deposit rate is 1/4 per cent. Information received since the Bank's April Monetary Policy Report (MPR) is broadly consistent with the Bank's medium-term outlook for output and inflation in Canada. The economy is undergoing major restructuring in a number of sectors. The already significant output gap will continue to widen through the third quarter, putting downward pressure on inflation. The Bank continues to expect http://www.ratebot.ca/blog/index.php#86 http://www.ratebot.ca/blog/index.php#87 Bank of Nova Scotia, previously one of the more bearish banks on Bay Street, also revised up its forecasts for growth The Bank of Canada may not be able to live up to its promise to keep interest rates at rock-bottom 0.25% until the end of June next year, the Bank of Nova Scotia said Thursday. In a global forecast update, Bank of Nova Scotia chief economist Warren Jestin said Mark Carney, the central bank governor, will act when economic growth raises inflation concerns. BNS, previously one of the more bearish banks on Bay Street, also revised up its forecasts for growth. "They'll have http://www.ratebot.ca/blog/index.php#87 http://www.ratebot.ca/blog/index.php#83 Since the last Bank of Canada FAD, two major themes have emerged. First, some economic data has been not as bad as feared. Second, the currency is on a tear. But given the surprisingly transparent commitment in April to keep the overnight rate unchanged at 0.25% until June 2010, we do not think that the outlook has changed sufficiently to sway the Bank from the sidelines, nor does quantitative easing seem likely. Given that the decision itself is likely to be a non event, and the Bank of Canada already released its (downwardly) revised forecasts, the focus will turn to parsing http://www.ratebot.ca/blog/index.php#83 http://www.ratebot.ca/blog/index.php#80 Tara Perkins: Amid widespread job losses and battered investment portfolios, consumers are increasingly struggling under the weight of their debts. Figures released by Canada's major banks indicate a growing number of people are unable to cope with their debt loads, while businesses are largely handling it. “Unemployment and the recession are starting to hit the credit quality of the Canadian banks' books,” David McKay, chief of Royal Bank of Canada's Canadian operations, said in an interview yesterday. Data accompanying the banks' financial results last week show a http://www.ratebot.ca/blog/index.php#80 http://www.ratebot.ca/blog/index.php#75 Ellen Roseman Interest rates have fallen sharply in the past six months, prompting questions about refinancing. How much will you save if you "break" a closed mortgage to get a lower rate? If you're a tough negotiator, or have a mortgage broker on your side, you can get a five-year mortgage at 3.55 to 3.75 per cent – down from 5.75 per cent last November. Here's a guide to extricating yourself from a fixed mortgage without losing the savings to penalty charges. Read your mortgage contract. It spells out the conditions for getting out early before the end of the term and the http://www.ratebot.ca/blog/index.php#75 http://www.ratebot.ca/blog/index.php#76 Ellen Roseman: Ontario passed a law last week making an energy audit mandatory when selling a home. Homeowners can get off the hook only if potential buyers waive the right to an energy audit in writing. The new rules will be phased in slowly, the government says. Since Energy Minister George Smitherman took a strong stand on mandatory audits, I found it surprising to hear that he'd never seen one in action. At a news conference yesterday, he went through a century-old home in midtown Toronto with auditor Don Noble of GreenSaver and saw what an audit reveals. For example, it showed http://www.ratebot.ca/blog/index.php#76 http://www.ratebot.ca/blog/index.php#77 It seems that interest rates have reached their rock bottom and are starting to rebound.We have noticed that some of the lenders are increasing the interest rates offered on 1-5 year fixed closed terms. The lowest interest rate for a 5 year fixed mortgage that we have recorded remains at 3.39 % mark. However it is not offered anymore. Historically mortgage interest rates movements have been similar to bond rates. For the past month bond rates have started to climb up and mortgage interest rates are following. Mortgage rates lag behind because it takes longer for banks to change the http://www.ratebot.ca/blog/index.php#77 http://www.ratebot.ca/blog/index.php#73 There is increasing reason to believe that the worst of the financial crisis is behind us and the U.S. and global economies are bottoming. I believe we will see moderate growth in Canadian and U.S. GDP by year-end, a far cry from the recent contractions of more than 6%. There certainly remain many doomsayers who argue that all manner of economic and financial calamities will befall us, but I would suggest that most of these concerns are either unfounded or premature. Indeed, at the start of this year, virtually no one would have believed that the stock markets would be up roughly 25% http://www.ratebot.ca/blog/index.php#73 http://www.ratebot.ca/blog/index.php#70 Consumer-price index hits 14-year low, led by Alberta, with a 0.7-per-cent decline   Financial Post; Canwest News Service   Canada's annual rate of inflation appeared "in full retreat" in April as the economic downturn continued to push consumer prices lower. Statistics Canada said Wednesday that its consumer-price index fell to 0.4 per cent during the month -- the lowest level in 14 years -- from 1.2 per cent in March, while the core rate eased to 1.8 per cent from two per cent. The core rate strips out volatile items such as food and energy, and is a key factor in http://www.ratebot.ca/blog/index.php#70 http://www.ratebot.ca/blog/index.php#69 Pick right time to lock in on fixed mortgage   By Jonathan Chevreau, Financial PostMay 22, 2009     Today's low interest rates may be frustrating for investors in fixed income but if you're in debt--especially a homeowner -- it's an opportunity to save thousands of dollars. Both variable and fixed-ratemortgages "look good right now," but Tridelta Financial Partners, a Toronto financial advisory, says variable rates present the greater opportunity for those comfortable with some risk. Today's historically low rates are one fruit of the current troubled economy, http://www.ratebot.ca/blog/index.php#69 http://www.ratebot.ca/blog/index.php#68 In Leaside, a house recently sold for $136,000 over the asking price. Offer nights have started to attract multiple bidders again. And now, for the first time since Greater Toronto's housing market ground to a virtual halt last fall, the region recorded more home sales in a two-week period this year than in the same period last year. It's a short snapshot, but in the first two weeks of May, 4,561 homes sold in the GTA, up 3 per cent from 4,422 in 2008. However, the average sales price for GTA homes was down slightly from the same period last year, as was the average price in the 905. The http://www.ratebot.ca/blog/index.php#68 http://www.ratebot.ca/blog/index.php#58 Mortgage rates are expected to remain within 25 to 75 basis points of their current level for the remainder of 2009, according to CMHC's second quarter Housing Market Outlook, keeping them "very low in a historical context." "Movements in mortgage rates are difficult to predict due to volatile economic conditions," the report stated. "Nevertheless, rates are expected to remain steady this year and edge higher in 2010." Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline http://www.ratebot.ca/blog/index.php#58 http://www.ratebot.ca/blog/index.php#56 By Emily Senger, National Post Just as Toronto’s real estate market begins to recover, realtors and home builders are worried Ontario’s new harmonized sales taxcould send sales plummeting again. The number of home sales in the GTA in the first half of May was up 3% over the same period last year, after a series of year-over-year drops, the Toronto Real Estate Board said today. The average price was $399,811, about the same as last May. “We’re out of the trenches for sure,” said Jason Mercer, senior manager of market analysis for the board. But the harmonized http://www.ratebot.ca/blog/index.php#56 http://www.ratebot.ca/blog/index.php#55 Existing-home sales surged in April, a third consecutive monthly increase, which forced the Canadian Real Estate Association on Thursday to revise its forecast for a housing market apparently on the rebound. On a seasonally adjusted basis there were 34,838 unit sales last month, an 11.2% increase from March and the largest monthly jump in sales since March, 2004. "This spring has been strong," said Gregory Klump, chief economist with the Ottawa-based group, which represents about 100 real estate boards across the country. "Affordability, lower rates and prices, that's bringing people back http://www.ratebot.ca/blog/index.php#55 http://www.ratebot.ca/blog/index.php#54 TORONTO (Reuters) - Canadian housing starts fell 19.9 percent in April from March, returning to a downward trend that began last year, largely on a sharp drop in construction of condos. Housing starts dropped to a seasonally adjusted annualized rate of 117,400 units from a revised 146,500 units in March, Canada Mortgage and Housing Corp. said. The March figure was originally reported at 154,700 units, which broke a six-month losing string of falling starts. The number of starts for April were well below the average forecast of economists polled by Reuters who had called for http://www.ratebot.ca/blog/index.php#54 http://www.ratebot.ca/blog/index.php#49 A comprehensive 10-year action plan calls for spending an extra $484 million a year to help more than 250,000 Toronto families who are struggling with housing costs. Housing Opportunities Toronto, or HOT, is the result of an extensive consultation involving more than 1,800 individuals and groups who took part in public meetings, workshops and deputations last year. The plan for 2010 to 2020, to be unveiled at a news conferenceWednesday afternoon at city hall, calls on all three levels of government to contribute, noting that by 2020 Toronto will have grown to a population of 2.8 million, http://www.ratebot.ca/blog/index.php#49 http://www.ratebot.ca/blog/index.php#51 The 0.4% drop in retail sales in April is a blow to those expecting a quick snap back in economic output in the near term. Consumer demand accounts for 70% of output in the U.S. and stabilization in consumption is a necessary condition for recovery.  Soft numbers for April retail sales are in contrast to anecdotal evidence from retailers that sales picked up last month. The rise in January sales were buoyed by one time gains in social security benefits and reduced withholding taxes. A recent mortgage refinancing boom is expected to boost incomes and extend the recovery in spending, but that http://www.ratebot.ca/blog/index.php#51 http://www.ratebot.ca/blog/index.php#43 Canada’s housing market is showing signs of emerging from its winter hibernation. The Canadian Real Estate Association reported a healthy pickup in home sales nationally in both February and March, beyond the typical seasonal bump, albeit off decade lows in January. Preliminary reports suggest this firming trend continued in April. Buyers, especially firsttime, are being lured by historically low mortgage rates, greater affordability and increased supply. The rise in demand, combined with fewer new listings, has restored a better balance to the market. The national http://www.ratebot.ca/blog/index.php#43 http://www.ratebot.ca/blog/index.php#42 The deep economic recession currently being experienced in the United States is one of the worst in recent memory. Falling consumer confidence and a crippled banking system has increased the risk of deflation. • With nominal interest rates now close to 0%, the Federal Reserve has turned to non-traditional monetary policy in order to prevent deflation - dramatically increasing the amount of money available in the financial system. As an economic recovery takes place and economic slack is lessened, the rise in money supply could once again lead to rising prices. In order http://www.ratebot.ca/blog/index.php#42 http://www.ratebot.ca/blog/index.php#41 Existing Mortgages: to break or not to break, that is the question   You have seen lower mortgage rates for the last few months. And, you have been talking about terminating the current mortgage term. Is it the right thing to do?   Recently, we have received numerous phone calls to seek advice as to whether early mortgage renewals or transfers are beneficial to borrowers. Here are a few thoughts to consider:   1. Know Your Mortgage   Many of us may not fully understand the term and other particulars on our largest debts in life. You need to understand (1) time left on your mortgage http://www.ratebot.ca/blog/index.php#41 http://www.ratebot.ca/blog/index.php#40 Last week I had the opportunity to review a condominium builder purchase agreement with a couple of clients. They had been told in the sales office what they thought was the total purchase price and asked me to see if there were any surprises in the 39-page offer. The salesperson had failed to mention that the price on the front page was not the final one and that there were a great many extras not included in that figure. I went through the offer with the clients, pointing out many such http://www.ratebot.ca/blog/index.php#40 http://www.ratebot.ca/blog/index.php#37 If you are thinking of hiring someone to repair your credit, remember this: A credit bureau will not remove accurate negative information from your credit report before the legal time period has expired. Therefore, do not believe anyone who claims they can get negative information removed from your credit report faster than is legally required. There are no "loopholes" or laws that credit repair companies can use to get correct information off your credit report. No credit repair company can do anything you can't do for yourself. It is impossible for a third party to make changes in your http://www.ratebot.ca/blog/index.php#37 http://www.ratebot.ca/blog/index.php#35       A quarterly report pinpointing cross-country trends in housing affordability in provincial and major metropolitan housing markets.       The maelstrom that capsized global financial markets and knocked over the world economy has moved deeper into Canadian territory since last fall, causing damage to the domestic side of Canada’s economy, which, until then, had been resilient even though the external side had been feeling the strains for some time. As a result, overall economic activity began to contract in the fourth quarter of 2008 and the http://www.ratebot.ca/blog/index.php#35 http://www.ratebot.ca/blog/index.php#17 OTTAWA - The Bank of Canada has set the stage for direct intervention in the financial markets through purchases of government and corporate bonds, announcing that Canada's capacity to produce has taken a big hit during a severe recession. The central bank's long-awaited policy statement Thursday on so-called quantitative and credit easing contained no specific commitment to move into the uncharted waters, but says it may need to if conditions continue to deteriorate. The recession is much more severe and will last longer than it previously thought, the bank's governing council said in its http://www.ratebot.ca/blog/index.php#17 http://www.ratebot.ca/blog/index.php#16 25 basis point cut brings interest rate policy to its effective lower bound at a 0.25% overnight target, and Bank commits to this overnight rate until end of Q2/2010. As Bank seeks to keep inflation expectations anchored, future monetary stimulus will rest on market interventions and direct injections with this framework to be unveiled on http://www.ratebot.ca/blog/index.php#16 http://www.ratebot.ca/blog/index.php#15 Business Reporter Warning the recession will be longer and deeper than expected, the Bank of Canada cut its benchmark interest rate by a quarter of a percentage point to 0.25 per cent and said it will likely remain at that level until the middle of next year. "In an environment of continued high uncertainty, the global recession has intensified and become more synchronous" since January, "with weaker-than-expected activity in all major economies," the central bank said in a news release Tuesday morning. Deteriorating credit conditions have spread quickly through the economy, the bank http://www.ratebot.ca/blog/index.php#15 http://www.ratebot.ca/blog/index.php#13 The Canadian housing boom was declared officially over Thursday. A slide in existing home sales that started in the West late last year spread to Toronto in the first quarter of 2008, taking the heat out of prices nationwide and driving the ratio of new listings to sales to a nine-year high, figures released Thursday showed. "Canada's six-year housing market boom is officially over," said Douglas Porter, deputy chief economist at BMO Capital Markets. "There's no question the numbers were probably distorted by a few feet of snow in the first quarter of the year, but I think there's some http://www.ratebot.ca/blog/index.php#13 http://www.ratebot.ca/blog/index.php#5 SYNCHRONICITY, THE 2009-10 CANADIAN TOUR March 17, 2009 Our recent Quarterly Economic Forecast (March 12) argued that this is the most synchronous global downturn in the post-war period. It could also very well be the most synchronous downturn within Canada since the war. Indeed, all regions of the country have faltered in lockstep since the fourth quarter of 2008. This is the one reunion tour from the recession marching band we all would rather not attend. Plunging global demand for manufacturing exports, falling commodity prices and volumes, and financial market gyrations are affecting http://www.ratebot.ca/blog/index.php#5 http://www.ratebot.ca/blog/index.php#6 Canadian housing starts tumbled in February as the market remained soft, Canada Mortgage and Housing Corp. said Monday. CMHC reported that the seasonally adjusted annual rate of housing starts fell to 134,600 units last month, down from an annualized rate of 153,500 units in January. "Increased listings and reduced sales in the existing home market continue to impact the new home market," said Bob Dugan, chief economist at CMHC's market analysis centre. "The decrease in February housing starts is partly attributable to the volatile multiple starts segment. In any given month and given its http://www.ratebot.ca/blog/index.php#6 http://www.ratebot.ca/blog/index.php#9 Tony WongBusiness Reporter There are signs of hope in the Greater Toronto Area for the key spring existing home market as sales have started to recover from a steep sales downturn. The Toronto Real Estate Board reported 6,171 sales in March today, still down 7 per cent from March of 2008, but cause for some joy by realtors since it represents the smallest year over year decline in the last five months. "While the GTA economy and housing market have weakened sharply, the resale housing market does not show signs of panic," said housing analyst Will Dunning in a report. "If this relative http://www.ratebot.ca/blog/index.php#9 http://www.ratebot.ca/blog/index.php#8 Contractors' selling prices for new homes decreased 0.6 per cent between December and January, Statistics Canada reported Wednesday. The agency said the largest decreases were recorded in cities in Western Canada, and the pace of decrease in January was slightly faster than the 0.1 per cent decline observed the previous month. Prices declined 2.8 per cent in Edmonton, 2.1 per cent in Calgary, 1.1 per cent in Victoria and 0.7 per cent in Vancouver in that period. Builders in those four cities reported unfavourable market conditions. Contractors' selling prices for new homes in New http://www.ratebot.ca/blog/index.php#8 http://www.ratebot.ca/blog/index.php#10 OTTAWA, February 19, 2009 — Housing starts reached 211,056 units in 2008, a decrease from 228,343 in 2007, according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook, Canada Edition* report. Starts are expected to be about 160,250 for 2009 and about 163,350 for 2010. “The new home market is moderating due to a number of key factors,” said Bob Dugan, Chief Economist for CMHC.  “The economic downturn will result in a decrease in demand for home ownership leading to a decline in housing starts and existing home sales in 2009. http://www.ratebot.ca/blog/index.php#10