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The battle of the bank rates is starting to heat up with the start of the spring mortgage season—one that is expected to be particularly heated. By getting a head start and lowering rates on five-year fixed mortgages, Canada’s big banks are hoping to attract first-time home buyers, especially in Canada’s hottest real estate markets, where there is a scarcity in supply. However, first-time home buyers looking for great rates and flexibility can do better with a private mortgage broker.

Rates at All-Time Lows

The Bank of Montreal (BMO) and TD Canada Trust have both cut their five-year fixed mortgages (the industry’s most popular phrase) to 2.79%. While the rates from the big banks are certainly lower than what they were this past winter, they come with certain restrictions.

With Canada’s big banks, there’s always a catch. For example, the 2.79% rate from BMO will only let home buyers prepay up to 10% of their mortgage in a lump sum payment each year, compared to the industry norm of 20%. On top of that, consumers that lock in that term cannot refinance their mortgage and have to stay with BMO for the duration of the mortgage. If you sell your home during that five-year term, you have to transfer the mortgage to your next one.

The Canadian Imperial Bank of Commerce is also trying to attract first-time home buyers with seemingly attractive rates; the CIBC even posted a four-year fixed mortgage at 1.99%! But read the fine print: that rate is only in place for the first nine months. After all, it’s at 2.83% for a total blended rate of 2.69% over four years. Of particular note, to get that 1.99% teaser rate, first-time home buyers need to qualify on the higher five-year rate.

There are much better mortgage products out there for first-time home buyers with more flexible options. Unfortunately, you won’t hear about them from Canada’s big banks. That’s because they only pitch their own financial products, whether it is in your best interests or not.

Housing Prices Moderating in Most of Canada

The fact of the matter is that first-time home buyers need to find a mortgage best suited to their financial and lifestyle needs. What they don’t need is to take whatever the big banks tell them they need. Over the life of your mortgage, every little bit helps save you more.

This is important to keep in mind, especially when you consider that, for the first half of March, the average detached home in Toronto was selling for almost $1.1 million; that’s up 21.3% over the same time last year. For the Greater Toronto Area, the average selling price for the same two-week period is up 10.6% year-over-year at $620,106.

It’s the same story for Vancouver, where the benchmark price for a detached home in February increased 7.9% year-over-year to $1.02 million. The price for a detached unit increased 4.6% year-over-year to $481,500.

Housing prices are not as heated in most of Canada, though. In fact, housing prices fell in eight of 11 major housing markets in February. Calgary prices are down for the fourth month in a row for a cumulative decline of 2.3%; in Winnipeg, it was the fourth decline in five months, for a cumulative decline of three percent; and housing prices are down even more east of Toronto.

Canadalend.com: Getting Home Buyers the Best Rates and Products

More and more first-time Canadian home buyers are discovering the many benefits of using a private mortgage broker like Candalend.com . Among first-time buyers using a broker, 50% said they obtained a mortgage with a lender other than the financial institution they deal with the most; this compares to only 27% among first-time buyers dealing directly with their mortgage lender. What this means is that first-time buyers using a broker are 85% more likely to switch financial institutions when getting a mortgage.

With the spring real estate market getting started, now is the perfect time to contact the licensed, independent agents at Canadalend.com. Because Canadalend.com agents are independent, they have access to hundreds of different lenders.

Whether it’s a fixed or variable mortgage, Canadalend.com can help you find the best rates with the kind of flexible terms that meet your financial and day-to-day needs. To see what kind of mortgage you qualify for, contact Canadalend.com today to set up a free consultation or apply online and one of our private mortgage specialists will help you set up an appointment at your earliest convenience.

Sources:

“BMO Smart Fixed Mortgage,” Bank of Montreal web site; http://www.bmo.com/main/personal/mortgages/smartfixedmortgage?ecid=ps-AGILE17088MTG4-SNBMO20&BMO_VSC_ADC=Google%5EMortgage-Acquisition%7CBMO%20Mortgage%20Banking%5EBank%20of%20Montreal%20bank%20mortgage%20rates%20Broad, last accessed March 31, 2015.

“Fixed-Rate Closed Mortgage,” CIBC web site; https://www.cibc.com/ca/mortgages/fixed-rate-closed-mortg.html?WT.mc_id=ExtPAID_campB-E-Mortgage_Types_kwd+CIBC_+mortgage_fixed_adgrpfixed_mortage_rates-E, last accessed March 31. 2015.

“GTA Realtors® Release Mid-Month Resale Housing Figures,” Marketwired web site, March 17, 2015; http://www.marketwired.com/press-release/gta-realtorsr-release-mid-month-resale-housing-figures-2001075.htm.

“Home buyer and seller activity outpaces historical averages in February,” Real Estate Board of Greater Vancouver web site, March 3, 2015; http://www.rebgv.org/news-statistics/home-buyer-and-seller-activity-outpaces-historical-averages-february.

“Teranet – National Bank National Composite House Price Index ™,” House Price Index web site; http://www.housepriceindex.ca/, last accessed March 31, 2015.

“2014 First-Time Homebuyers Survey,” Canada Mortgage and Housing Corporation web site; http://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/sure/fihosu/upload/FTB-InfoBrochure_WEB_EN_Oct15.pdf, last accessed March 31, 2015.

A new study shows that the majority of Canadians prefer fixed mortgages. While many first-time home buyers like the idea of fixed monthly mortgage payments, it’s important to remember that there’s more to finding the right mortgage than just the interest rate. And when it comes to getting the best mortgage, it pays to shop around.

More Canadians Choosing Fixed Mortgages

With the spring home-buying season heating up, more would-be property owners are looking to get pre-approved and find their dream homes. But when it comes to signing on the dotted line, most Canadians are choosing to lock in their monthly mortgage payments.

In fact, 57% of Canadians are selecting fixed mortgages , up sharply from 48% in 2014, and just 39% in 2011. By contrast, over the last number of years, a smaller percentage of Canadians would pick a variable-rate mortgage. Just 30% would select a variable-rate mortgage today.

On top of that, 11% of respondents were undecided between a fixed and variable-rate mortgage. That’s down from 19% in 2014 and a whopping 25% in 2011.

Canadians are favouring fixed-rate mortgages because they don’t think interest rates will fall further. Almost half (44%) of Canadians expect mortgage rates to increase next year, down from 47% in 2014 and 61% in 2011.

Still, 42% of Canadians believe interest rates will stay the same in the next 12 months, while nine percent think rates will fall even further. The fact of the matter is that there is a case to be made for even lower rates.

Will Interest Rates Fall Even Further?

The Canadian economy is highly dependent on oil and gas. In fact, crude oil accounts for roughly 14% of Canadian exports. Plunging oil prices, which have dropped from just over $106.00 per barrel last summer to around $47.00 today, are having a detrimental impact on the Canadian economy.

As a result, the Bank of Canada unexpectedly lowered its key lending rate (which affects variable mortgage rates) in January from 1.0% to 0.75%. Thanks to a weak global economy, oil prices are expected to remain lower for the near future.

The Bank of Canada has hinted that it will keep rates near record lows for a considerable period of time—and it has not ruled out further cuts.

Shopping Around for a Mortgage Can Save You Money

Fixed mortgages are an attractive option for those who want to know what their mortgage payments will be for the next five years.

But there is no one-size-fits-all approach to mortgages. The lowest rate does not necessarily mean the best mortgage. It’s important for first-time home buyers, or those thinking of refinancing or renewing their mortgages, to look beyond interest rates.

While rates are important when it comes to deciding whether or not you want to get a fixed or variable-rate mortgage, it’s also important to look at whether or not you can handle other incidentals, such as household expenses and unexpected costs.

There are a lot of factors to consider. And when it comes to finding the right financial product, it’s best to go with the licensed, independent agents at Canadalend.com . Just because some of Canada’s biggest banks are advertising a low rate doesn’t mean it’s the lowest rate on the market. Nor does it mean it comes with the most flexible options.

Many first-time home buyers do not realize they can negotiate when it comes to getting a mortgage. Using a mortgage broker like Canadalend.com is the optimal way to get the best rates and options.

Because the agents at Canadalend.com are independent, we have access to mortgages from hundreds of different lenders. We can also get you pre-approved for a mortgage. Pre-approval lasts for 120 days and is locked in from the day you start the process.

If you’re trying to decide which kind of mortgage is best for you, contact Canadalend.com today to set up a free consultation. Or apply online and one of our private mortgage specialists will help you set up an appointment at your earliest convenience.

Source:

“Canadians increasingly opting for peace of mind when it comes to their mortgage: CIBC,” CNW web site, March 30, 2015; http://www.newswire.ca/en/story/1509695/canadians-increasingly-opting-for-peace-of-mind-when-it-comes-to-their-mortgage-cibc.

Most of us live in homes that are a work in progress with a mile-long list of remodelling projects. Unfortunately, the money isn’t always there when you need it most. With Canadian housing prices on the rise and mortgage rates at historic lows, now is the perfect time for homeowners to take out either a home equity line of credit (HELOC) or a home equity loan.

Using a HELOC to Unlock Equity in Your Home

If you’ve lived in your home for any period of time, you have built up equity. By refinancing with a HELOC or home equity loan , you can access up to 80% of your home’s value (less the mortgage). Many homeowners access that home equity to free up cash for everything from home renovations to vacations to their children’s tuition fees.

While both HELOCs and home equity loans sound similar and use your property as collateral, they operate on entirely different premises. A home equity loan provides you with a fixed amount of money, payable over a fixed period of time, usually with a fixed interest rate. Once you receive the money, you cannot get more from the loan. Essentially, a home equity loan operates like your primary mortgage does. With a HELOC, you can borrow funds up to the credit limit during a specific timeframe, called the draw period. You withdraw money as needed and only pay interest on the amount you use. On top of that, the money is available for use.

For the most part, the interest charged on a HELOC is calculated at a variable rate plus prime. The variable rate can vary drastically depending on which lending institution you use; some also offer a fixed-rate option.

Refinance and Remodel with a HELOC

While many people remodel their homes to meet the growing needs of the whole family, others like to do so simply to increase the value of their property. Your home may be sorely outdated, but if you don’t have an emergency fund, the lime green bathroom tiles and matching sink will just have to wait.

Or maybe they don’t. A HELOC or home equity loan could be the answer if you want to make home improvements to your property in Toronto but can’t accommodate the upfront costs. And it’s a great way to tap into your home’s equity.

Tackle Home Remodelling Projects

The most expensive room in the house to remodel is the kitchen; it’s also a home’s top selling feature. With a HELOC, you don’t need to hold off remodelling your outdated kitchen or bathroom, as it gives you the freedom to make needed renovations when you want.

Get Your Home Repairs Done Right

It’s very simple: you get what you pay for. Doing a home renovation on your own or hiring the cheapest contractor could end up costing you more in the long run. Refinancing with a HELOC is the best way to ensure your home renovation job is done properly.

Maximize Your Home’s Potential

Your home is a major investment and home improvements can significantly increase its value. In today’s red-hot real estate market, home improvements could help you maximize your investment if you decide to sell.

Renovation Via Canadalend.com

If you’re thinking of doing a home renovation to increase the usability and value of your property,Canadalend.com can help. The independent, licensed refinancing experts at Canadalend.com can help you determine what your best options are. We evaluate your current financial situation and help you find the lender best suited to your financial and lifestyle needs.

For more information on a HELOC or home equity loan, contact Canadalend.com to set up a free consultation, or apply online and one of our private mortgage specialists will assist you in setting up an appointment at your earliest convenience.

Canadian debt levels are at record highs and more and more households are finding it difficult to repay their various debts. Debt consolidation is a great way to repay all your debts at a lower interest rate. Even if you have bad credit, debt consolidation loans are one of the easiest ways to reduce your debt and repair your credit.

Canadian Debt Levels Rise

According to the most recent data, more and more Canadians are getting into debt. Statistics Canada reports that between 1999 and 2012, the median debt held by indebted Canadian families increased by $23,000 to $60,100.

The number of Canadian households with debt (mortgages, car loans, lines of credit, personal loans, and student debt) also increased during the same timeframe from 67% in 1999 to 71%. The “median” is the middle figure that separates the top half of families with the most debt from the lower half.

At the same time, the value of assets held by Canadian families grew at an even greater rate: 80%, or $179,800, to $405,200. The value of assets encompasses financial assets like investments (stocks and bonds), pensions, and non-financial assets like real estate.

Unfortunately, the increase in property value doesn’t really benefit many Canadians, nor does it offset their personal debt. That’s because the increase in the value of real estate is only tangible if you sell your property.

Consolidating Debt

What this most recent data shows is that the majority of Canadians run into money problems at some point. The biggest challenge is knowing how to deal with out-of-control debt. One of the best ways to get a handle on debt is to consolidate it into one convenient payment. That’s because different forms of debt often come with different interest penalties.

For example, a major credit card might have a monthly interest fee as high as 19%. Charges for specialty store credit cards can be as high as 29%. A student loan, on the other hand, will have a much lower interest rate. And in today’s low interest rate environment, fixed mortgages can be found for 2.75%.

Ultimately, by consolidating your debt, you increase your leverage by lowering your interest rate, allowing you to pay off your debt more quickly. Those thinking of consolidating their debt can use assets like their home to secure a lower interest rate. Choosing to consolidate your debt as opposed to declaring bankruptcy will protect your credit rating. Not only that, banks will see you as being a less risky investment.

What If You Have Bad Credit?

Unfortunately, it is more difficult to get a consolidation loan if you have bad credit—but it isn’t impossible. Lenders want to know how risky it is to lend you money. To determine this, they look at your credit scores and bill payment history. A low credit score or history of skipping bills is a red flag for lenders.

Fortunately, the lending landscape has improved over the last number of years. Those with bad credit looking to consolidate their debt are no longer stuck using Canada’s big banks or financial institutions. Today, there are many different lenders willing to work with and finance those with bad credit.

There are a number of steps you can take to consolidate your debts and get your credit back on track. Remember, your credit history does not stay the same. It changes in step with your financial situation.

Canadalend.com, the Leaders in Debt Consolidation

When it comes to having bad credit and consolidating debt, it’s known to get complex. That’s why it’s important to be fully aware of all the different options. It’s also why you need to talk to an independent, licensed agent at Canadalend.com . They can show you how to rebuild your credit and help you find the best consolidation loans.

Where Canada’s big banks only promote their own financial products, Canadalend.com agents are independent and have your best interests in mind. We have access to hundreds of lenders, many of which provide loans to those who have bad credit or have filed for bankruptcy.

To find out how you can rebuild your credit score and consolidate your debt, contact Canadalend.com today or apply online and a Canadalend.com mortgage specialist will set up an appointment at your earliest convenience.

Source: 
“Study: Changes in debt and assets of Canadian families, 1999 to 2012,” Statistics Canada web site, April 29, 2015; www.statcan.gc.ca/daily-quotidien/150429/dq150429b-eng.htm.