Variable mortgage rates to stay low until next year

Jeff Evans

According to the FINANCIAL POST, on Thursday, the chief economist of CIBC, Avery Shenfeld, has estimated that the Bank of Canada prime rate will continue to remain low into 2011 due to lower productivity and a strong Canadian dollar. This has been in line with my previous thoughts on what will happen with low variable mortgage rates going forward.

What does this mean to you? If you currently have a variable rate mortgage…if this information is correct, then you can expect to continue with very low interest rates for a while to come yet. With fixed mortgage rates increasing .6% on a 5 year fixed last week, the option of locking in has become much less attractive, especially when for many current borrowers, it could take approximately 10 prime rate increases to match the rate that a 5 year fixed rate would currently offer.

If you are buying a home in the Greater Vancouver Area, the new mortgage regulations coming into effect on April 19th mean that it will be difficult for you to find the home you want and qualify for a variable rate mortgage anyway. As of April 19th, the current qualifying rate for a variable mortgage will go from (for me and many of my lenders) 3.7% up to 5.85%. That takes away a lot of mortgage affordability for people in the Vancouver area. If you want to buy the most house you can for your given income, you will need to get a 5 year fixed rate (if you buy with less than 20% downpayment).

However, if you are a conservative buyer who is not trying to max out the possible amount they can borrow…you could still qualify for the home you want with a variable rate mortgage. Being prudent in these days is not necessarily a bad thing.

Contact me today to find out what I can do for you. Simply fill in the form below.

Author: Jeff Evans

I am a mortgage broker, hair salon owner, squash player, student, and husband, aspiring to do good for people.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Articles

mortgage broker Vancouver BC
Good news regarding OSFI rule changes
Jeff Evans
No Comments

This is just a quick note to let viewers know that IF you are one of the people with 20% or more down-payment and are in a position that the new OSFI rule changes affect your pre-qualification, that I can extend the current guidelines into the new year by up to 120 days provided that I have an application and am able to get a pre-approval in place with a lender for you before January 1.Read More

OSFI B20 mortgage guideline changes 2017 – Part 2
Jeff Evans
No Comments

This is a continuation of the article published here about the OSFI B20 morgage guidline changes for 2017.

If you are familiar with mortgage brokers at all (which you probably aren't) you would know that we also have alternative sources of lending for situations where a mortgage borrower will not qualify with a prime institution.  We have what we call "B" lenders, who have higher rates but more flexible lending criteria, and we have private lenders, which are individuals and corporations who can lend money on on anything that suits them.Read More

OSFI B20 mortgage guideline changes 2017 – Part 1
Jeff Evans
1 Comment

B20?  Is that some kind of vitamin?

It certainly sounds like a vitamin, but unfortunately, it is something else altogether.  The Office of the Superintendent of Financial Institutions is the regulator for all federal mortgage lending institutions.  They set the regulations for mortgage companies like banks to follow (or ignore).

The latest updates to the B20 mortgage regulations could bring some potentially very disrupting changes to the real estate market, especially if you are wanting to get a mortgage in Vancouver, or you are a mortgage broker in Vancouver. In summary:Read More