Mortage Update brought to you by Anna Labadze www.dreamrealestate.ca 604.782.3552

 

Mortage Update brought to you by Anna Labadze www.dreamrealestate.ca 604.782.3552

The Vancouver real estate market remained strong with many people making the decision to buy during the normally slower time.
In addition to the many people who are thinking of buying. We are seeing more of our variable rate clients starting the process to lock in an interest rate.
On the interest rate side we have seen many lenders reduce the interest rates on their five year fixed term mortgages. Most lenders are in the 3.89% to 3.99% range for the five year fixed term mortgages and we have one lender offering 3.74% with a 120 day rate hold.
The rate decreases in the fixed terms came about as the yields in the bond markets dropped.
The closed variable rate mortgages are in the 1.95% to 2.25% range based on a prime rate of 2.25%.
The Bank of Canada continues to assert that they expect to be able to leave their interest rate unchanged until the second half of this year and there does not appear to be anything that will prevent them from keeping this pledge.
While most analysts are predicting the Bank of Canada will raise interest rates before the end of 2010 there is a difference of opinion as to how soon and by how much interest rates will go up in Canada by the end of this year.
In one corner CIBC is predicting the Bank of Canada will hold off on any rate increases until September of 2010 and that the Bank of Canada rate will increase by ¾% in 2010 and by another ¾% in 2011.
RBC has predicted that rates will go up starting in July and will increase by 1% before the end of this year and by a further 2.25% before the end of 2011.
My sense is that the Bank of Canada will increase rates in July and that the range provided by CIBC and RBC is correct for this year. I also believe that the five year fixed term mortgages will increase before the bank of Canada raises their rates.
With this in mind I am currently leaning towards the five year fixed terms as historically people who take the fixed term option at the bottom of an interest rate cycle will come out ahead.
If you have any questions about your mortgage please feel free to give me a call at 604-351-6424.
Nick Burzese
Mortgage Planner
MPRO Mortgage Architects

 

Mortage Update brought to you by Anna Labadze www.dreamrealestate.ca 604.782.3552

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