NEW MORTGAGE RATES. August 2013

TERM	POSTED	OUR RATES *
6 Month	4.00%	3.95%
1 Year	3.09%	2.79%
2 Year	3.14%	2.69%
3 Year	3.65%	2.99%
4 Year	4.54%	3.09%
5 Year	5.14%	3.39%
7 Year	6.35%	3.84%
10 Year	6.75%	4.19%
Variable Rate		2.60%
Prime Rate		3.00%
BenchMark Rate		5.14%
Cost Per $1000		$4.93
* Rates may vary provincially and may be subject to change without notice.   Cost per $1000 based on 5yr fixed term rate compounded semi-annually. Call Alexandre Malkhassiants for details: (416) 723-9383

TORONTO REAL ESTATE MARKET AND TORONTO MORTGAGE UPDATE

Toronto real estate market is changing all the time. Particularly now because of the new mortgage and CMHC changes.

Here is a summary. Currently maximum amortization is 35 years. It will be 30 years. This will not have a large impact on qualifying for a mortgage.

Home Equity Loan (line of credit secured by a mortgage) maximum 80% of the purchase price. 

Now Toronto home owner can refinance up to 90%. But after March 18 2011 you can refinance up to 85%.

5% down payment still available for purchases.

The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit.

The first change is likely to have the largest impact. Buyers who purchase Toronto real estate with less than 20 per cent of the value of the home are required to purchase government-backed mortgage insurance through Canada Mortgage and Housing Corporation.

Under the new rules, mortgages amortized over longer than 30 years will no longer qualify for that insurance, making it effectively impossible to get a highly leveraged mortgage of more than 30 years in Canada.

The deadline is around 18th of March.

You have to be approved prior to this date to get better conditions.

So if you want to buy Toronto real estate, - buy now!

Mortgage agent Alex Malkhassiants is offering best mortgage rates and advice. 

Alexandre Malkhassiants, Sales Representative & Mortgage Specialist,

Right At Home Realty Inc.,  Real Estate Brokerage

Office: (416) 391-3232

Cell: (416) 723-9383

E-mail: amalkhass@rogers.com

Toronto real estate

Ontario real estate

Lowest Canada mortgage rates

WHAT YOU SHOULD DO BEFORE START SEARCHING FOR THE HOUSE

    If you are a prospective homebuyer the first thing you need to think about is where you want to live. You have to think about the type of location you need -near schools, outside the city, near a big park.
     Then you should look at your budget - what price you can afford based on debt load. Usually person could afford 3.4 times their salary. so a couple with an income for $100,000 could afford to buy a house worth $340,000. The house, all debts, including the new mortgage, can be no more than 40 per cent of their salary. So out of that $100,000 gross income, no more than $40,000 can be used to cover their debts.
     Then there's the down payment, which the buyer must have in hand before a mortgage will be granted. If you're buying a house you need five per cent for the down payment and 1.5 per cent of the purchase price for the additional costs such as notary fees, taxes, property insurance, home inspection, moving costs.
     There's another consideration for home buyers: you have to pay a premium to the Canadian Mortgage and Housing Corporation (CMHC) in order to get a CMHC-approved mortgage.
     Then you should think what kind of mortgage do you want. Eventually it will become important to you to being able to make additional lump sum payments or weekly or bi-weekly payments. You should consider many things about mortgage - for example, the ability to defer or reduce your mortgage payment in the case of an unexpected event or shortfall. You want real flexibility when it comes to mortgage payments. That's why you need a good mortgage agent to guide you through the whole process.
     For more information go here - http://www.torontogreathomes.com/

Canada Mortgage in 2011

Prime Minister Stephen Harper hinted the government may adjust mortgage rules in 2011 to help Canadians avoid going deeper into debt.

 

“We’ve tightened mortgage rules before,” Harper told CTV during a year-end interview that aired on Christmas Day. “If we have to do that again, we will.”

Harper also committed to eliminating the federal deficit but will not use “slash and burn” cuts, particularly in the critical areas of health and education. mortgagebrokernews.ca

Toronto real estate. Benefits of using a mortgage broker

1. Save time with one-stop shopping.

It can sometimes take weeks to organize appointments with competing mortgage lenders — homebuyers would rather spend their time house-hunting.

Brokers work directly with lenders and can quickly narrow down a list of options that suit you best.

2. Advice on your financial options.

Mortgage brokers can make recommendations and draw from available mortgage products that match your needs and help you decide what is right for you.

3. Brokers negotiate on your behalf.

Most people are uncertain about negotiating mortgages directly with their bank. Brokers negotiate mortgages every day on behalf of buyers and have a wealth market knowledge to secure competitive rates.

4. More choice means more competitive rates. We have access to a network of major lenders in Canada, so your options are extensive.

5. Ensure that you’re getting the best rates and terms. Even if you’ve already been pre-approved for a mortgage by your bank or another financial institution, you’re not obliged to stop shopping!

6. Get access to special deals and add-ons.

We do the math on which offers might be worth your attention.

7. Things move quickly.

Our job isn’t done until your closing date goes smoothly. We’ll help ensure your transaction takes place on time and to your satisfaction.

8. Get expert advice. When it comes to mortgages, rates and the housing market, we are not limited. We will explain the various mortgage terms, conditions and rates so you can decide confidently.

9. No cost to you. There is (in most cases) no charge for our services.

10. Ongoing support and consultation.

Even once your mortgage is signed and completed, we are here if you need any advice on closing details or even future referral needs.

Alex Malkhassiants is an active Mortgage Professional with Centum Inc. in in Toronto. He works with homebuyers in Toronto and surrounding areas to find the best mortgage for them. Have a question? Please call (416) 723-9383 (cell) 0r email - amalkhass@rogers.com

Determining the best mortgage type

When comparing the monthly mortgage payment only with the adjustable versus the fixed rate, the adjustable will always win (because the rate is lower). The variable rate is a higher risk product whereas the fixed rate is a guarantee for a set term. Most of us are aware that with investments, risk is usually the higher-profit option. This is the same with mortgages. The adjustable rate offers a higher risk but has proven to be most cost effective.

The payment is not the only thing to take into consideration when choosing which will work for you. In the fixed term, you know what your payment (and rate) will be for a set period of time. For example, the five-year rate today is at 4.29% (subject to change). Your mortgage payment is based on this rate for five years and will never change. The variable rate is based on the prime rate (which can be found on the Bank of Canada website and is consistent from lender to lender) less (or in some cases plus) a set discounted rate. Today’s five year adjustable is prime (2.50%) less .75%, for a rate of 1.75%, which would result in a lower monthly payment. The risk? This payment may (and will over the five-year term) change based on the prime rate on the first of each month.

Although the rate in the variable options is lower, the qualification rules are strict. When applying for a five-year fixed-rate mortgage, you would have to qualify on the rate on 4.29%. With the variable rate, consumers have to qualify at the Bank of Canada benchmark rate, which is set weekly on Mondays. Currently that rate is 5.99%. So, when qualifying for a mortgage, the fixed vs. variable rate may make or break your approval based strictly on the “qualifying” rate. Lenders need to make sure that when a consumer chooses the adjustable-rate mortgage, that they will still be able to make the payments if and when the rate rises. This is why the qualifying rate is higher.

To make sure that you have reviewed ALL of your mortgage options, speak with a mortgage broker. We are not limited to one specific financial institution’s rules and rates. You need to make sure you have discussed your rate and product options to make an educated decision.

Alexandre Malhassiants is an active mortgage professional with Centum Mortgage Inc.  Have a question? Please e-mail amalkhass@rogers.com or call 416- 723-9383.

Most Canadians are `comfortable' with mortgage debt

Eighty-one per cent of homeowners surveyed by the Canada Mortgage and Housing Corp. say they are comfortable with their current level of mortgage debt.

The online survey of more than 2,500 homeowners also found that 68 per cent ``feel there is a strong chance they will pay off their mortgage sooner than required'' and 27 per cent said they have ``already taken steps to pay down their mortgage through lump-sum payments or through increased regular payments, '' according to the federal agency.

Meanwhile, CMHC said its annual survey found that 89 per cent of first-time homebuyers used the Internet to get information about mortgages and 84 per cent researched mortgage terms and conditions online.

Toronto real estate. Countdown begins to interest rate hikes

The Bank of Canada took its first steps in March toward returning the country to more normal interest rate levels by signalling a more hawkish tone on inflation and acknowledging the economy is performing better than expected on "vigorous" consumer demand.

The messages were conveyed in the Bank of Canada's latest interest-rate statement, which kept its record-low benchmark rate of 0.25% as is and pledged to keep it there until July. But most bank watchers took note of subtle changes in the statement, compared with previous rate announcements, and there was enough there for them to begin the countdown to rate hikes.

"I suspect [governor] Mark Carney and company are starting to feel the urge to tighten -- not a strong urge now, but an urge nevertheless," said Michael Gregory, senior economist at BMO Capital Markets.

Among the key changes was a declaration from the bank that the risks to its inflation outlook are "roughly balanced," and no longer "tilted slightly to the downside" -- language that suggests deflation is no longer a concern and that price increases are creeping up to a level that may prompt a response. (The central bank sets its interest rates to ensure inflation remains at 2%.)

The wording change may appear trivial, "but it is nonetheless significant as it reflects an economic backdrop that continues to improve at a much faster pace than what the bank had envisaged," said Paul-André Pinsonnault, senior fixed-income economist at National Bank Financial.

The rate statement emerged a day after economic data indicated the Canadian economy grew at a robust 5% annualized pace in the final three months of 2009, blowing past market expectations for a 4% gain and the central bank's original 3.3% forecast. Economists say the fourth-quarter performance has set the stage for another robust gain, of perhaps 4% or more, for the first three months of 2010.

Meanwhile, recent data indicate that both the headline and core inflation rates have moved much closer to the 2% level than the central bank had expected. Under the bank's forecast, the 2% level would not be reached until the third-quarter of next year.

In the statement, the central bank acknowledged economic activity has been "slightly higher" than its own projections, with the 5% gain in the fourth quarter powered by "vigorous domestic demand" and a recovery in exports.

Using the adjective "vigorous" caught the eye of some analysts, such as Mr. Gregory. "That implies a strong unleashing of demand pent-up during the recession, with the credit creation process critical to this unleashing.

"In other words," he added, "low interest rates are doing their job in stimulating demand -- perhaps, increasingly, too well."

Mr. Pinsonnault noted the bank also dropped any reference to "considerable" excess supply, an indication, he said, that the slack in the economy is being absorbed at a faster pace than the central bank anticipated.

The consensus remains that the central bank will wait until July to begin raising rates, but the bank used Tuesday's statement to begin building its case. There are two more scheduled rate decisions between now and then, with one April 20 and then June 1.

"What we saw [Tuesday] was one of many steps aiming at moving away from dovish statements to relatively more hawkish ones. This gradual movement comes naturally well before an actual tightening in monetary policy," said Sébastien Lavoie, economist with Laurentian Bank Securities.

His firm believes rate increases will begin in the third quarter, but he said the odds have increased that the first hike will be in July as opposed to September.

How much, and how rapidly, the central bank raises rates beginning in July is up for debate, with economists estimating increases of 100 to 150 basis points in the second half of 2010. Financial Post

If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants, Right at Home Realty,  with all your questions: (416) 723-9383 (cell).

Toronto real estate: Variable mortgage rates can save you money

Fixed mortgage rates may help you feel secure in your budgeting, but the Bank of Montreal says the more volatile variable rate mortgages will save you money in the long run.

A new report from the bank shows that, over the past 30 years, variable-rate mortgages have been more cost-effective about 82 per cent of the time.

That may come as a surprise to some after studies have shown many Canadians prefer a fixed-rate mortgage.

A fixed rate locks the borrower into a set interest rate for a certain period of time.

That gives many borrowers peace of mind knowing how much money to set aside each month for their mortgage payment.

Variable rates change along with interest-rate moves.

BMO said the Bank of Canada's overnight lending rate is at its lowest possible point now, which could mean there are fewer benefits to a variable rate in the foreseeable future.

BMO highlighted two historical periods when fixed rates were considered beneficial -- in the late 1970s and late 1980s -- and both were just before interest rates started rising again.

The bank added that the current interest environment is similar to both of these periods.

"Short-term rates are at extreme lows, and pressure is likely to build for higher rates in the year ahead," said deputy chief economist Doug Porter in the report.

"The question of whether to lock in to a longer-term fixed mortgage rate or stay in a variable rate has become an increasingly complex and important issue."

Canada has been in a long-term declining rate environment since the early 1980s, the bank suggested.

As a result, the spread between five-year fixed mortgages and variable mortgages has been pushed wider in recent years and is now near an all-time high.

If you want to know more about mortgages call Alex Malkhassiants, mortgage agent with Centim Inc, at (416) 723-9383 (cell).