Changes in the market.

Over the course of the summer the economic picture turned very gloomy. European debt crises (note the plural), a resurgence of recessionary trends in the U. S., and slowing GDP numbers in Canada all lead to the Bank of Canada repeatedly not raising interest rates (as was speculated would have happened already by now). Matter of fact in the beginning of the year, many economists forecasted a rise in rates by half a percent at this point (3rd quarter 2011). The opposite has happened - rates have and will remain low until early 2012.

I was speaking to a road rep from one of my favorite lenders last night about this and his reaction to what the major lenders have done is quite simple:

“If the Bank of Canada won’t raise interest rates, then we’ll cut the discount to variable-rate deals”.

And that’s exactly what has happened, and continues to happen, at an alarming rate. 2 weeks ago, prime-.90 was still available via a local credit union. Prime-.75 was a regular affair. Now? Prime-.35 and climbing is the norm. On the flip side, banks are steadily pushing their fixed rates lower and effectively giving people no choice but to take a fixed-rate mortgage. Although to their credit, the rates available now are obscenely low. 3.19 5-year fixed? I’d take that almost any day. My general rule of thumb is that when the difference between variable and fixed is less-than one percent, I jump on the fixed bandwagon. There are some amazing 3 and 4 year deals available also right now, for those in the market for a shorter term.

Which brings me to an observation in relation to a specific ex-client I have. She called me after five years for her renewal options, which I gave her. Variable, or fixed.…



Life definitely takes on a new twist when your wife or partner announces you’re going to have a baby. I’ll never forget the day that we found out, and the day that he came into our lives. It also made me re-evaluate a lot of financial decisions and choices we have been making as suddenly there’s a new sheriff in town. As a result I’ve increased my financial literacy through reading some amazing blogs including moneysmartsblog and boomer and echo. I would add these to your regular reading repetoire as their articles are very informative and helpful. Moneysmartsblog’s most recent one on a practical way to estimate house costs specifically can help all home owners.

Changes also occurred in the mortgage market, which I will update you on in my next blog! In the meantime if you have any blogs you like to read and wish to share, email me at .(JavaScript must be enabled to view this email address) and I will update this blog.

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