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Canadian consumers are losing confidence in the economy. While consumer confidence was near an annual high at the beginning of December, it has since slipped. The weekly consumer sentiment index increased to 59.3 for the week ended December 6, up from 58.9 a week earlier. (Source: Mayeda, A., “Consumer confidence nears year high as Canadians put faith in rising house prices,” Financial Post, December 9, 2013.)

In early December, the number of people who thought real estate prices would increase over the next six months also increased from 40.0 the week earlier to 40.3—the highest level since March 2012. (Source: Ibid.)

But as we headed into the final weeks of the holiday season, consumers became less optimistic. Canadian consumer confidence levels declined for the second straight week on the heels of growing pessimism about the economy and real estate prices.

The weekly consumer confidence measure dipped to 57.8 for the week ended December 20, the lowest level in nearly two months. Canadians lost confidence in all four subjects tracked by the Bloomberg Nanos Canadian Confidence Index: personal finances, the economy, job security, and real estate. (Source: Mayeda, A., “Canada Consumer Sentiment Falls a Second Week on Housing,” Bloomberg, December 23, 2013.)

What a difference two weeks can make. On December 20, the share of respondents who thought Canadian real estate prices would rise over the next six months dropped to 34.8—the lowest level since August and a sharp drop over the 40.3 indicated just a couple weeks earlier. (Source: Ibid.)

Consumer confidence is an important economic indicator. For starters, it reflects our optimism in the state of the economy, which is echoed in the way we save and spend. When Canadians are more optimistic, they spend money; when confidence levels are retreating, Canadians spend less money, indicating unease. The more confident we feel about the stability of our incomes and jobs, the more likely we are to spend.

Despite avoiding the housing crash that decimated the U.S. market and being one of the few countries to steer clear of the Great Recession, Canada has a stubbornly high unemployment rate. In January 2013, the unemployment rate was 7.1%, and by the end of the year, it had dipped only marginally to 6.9%. (Source: Statistics Canada web site, last accessed December 31, 2013.)

Unfortunately, weak consumer confidence and high unemployment are not the best ingredients for an economy that generates roughly 60% of its gross domestic product from consumer spending. (Source: “Household final consumption expenditure, etc. (% of GDP),” The World Bank web site, last accessed December 31, 2013.)

In spite of waning consumer confidence, the fact of the matter is that the Canadian economy is getting stronger, with demand in the Canadian housing market expected to remain robust across most provinces in 2014.

The Canadian Real Estate Association has projected that resales in 2014 will come in at 475,000 homes nationally, up from a previous 2014 forecast of 465,600. On top of that, it expects the national price for a home to rise to $391,100 from $382,200 in 2013. (Source: “Canadian Real Estate Association predicts a strong year in 2014,” December 16, 2013, Toronto Star.)

In an effort to help shore up the economy and prevent a housing market crash and recession (like the one experienced in the U.S.), the Bank of Canada has held the overnight lending rate at an artificially low one percent since late 2010. The low interest rate environment is supposed to make it easier for consumers and businesses to borrow.

In fact, thanks to the Bank of Canada keeping its policy rate at one percent (which impacts variable mortgage rates), more and more potential homebuyers are able to get mortgages. And the Bank of Canada has hinted interest rates will remain low for at least a couple more years.

So in spite of declining consumer confidence, the Canadian housing market remains robust. And with artificially low interest rates expected to stay put for the foreseeable future, 2014 will continue to be an excellent environment for potential homeowners.

First-time homeowners looking to take advantage of low mortgage rates or those looking to access the current equity in their home with a second mortgage should contact Canadalend.com or apply online . A mortgage specialist will help set up an appointment with an independent, licensed Canadalend.com agent at your earliest convenience.

If your New Year’s resolution is to find your dream home at the best mortgage rates possible, contact Canadalend.com.

Canadian consumers are losing confidence in the economy. While consumer confidence was near an annual high at the beginning of December, it has since slipped. The weekly consumer sentiment index increased to 59.3 for the week ended December 6, up from 58.9 a week earlier. (Source: Mayeda, A., “Consumer confidence nears year high as Canadians put faith in rising house prices,” Financial Post, December 9, 2013.)

In early December, the number of people who thought real estate prices would increase over the next six months also increased from 40.0 the week earlier to 40.3—the highest level since March 2012. (Source: Ibid.)

But as we headed into the final weeks of the holiday season, consumers became less optimistic. Canadian consumer confidence levels declined for the second straight week on the heels of growing pessimism about the economy and real estate prices.

The weekly consumer confidence measure dipped to 57.8 for the week ended December 20, the lowest level in nearly two months. Canadians lost confidence in all four subjects tracked by the Bloomberg Nanos Canadian Confidence Index: personal finances, the economy, job security, and real estate. (Source: Mayeda, A., “Canada Consumer Sentiment Falls a Second Week on Housing,” Bloomberg, December 23, 2013.)

What a difference two weeks can make. On December 20, the share of respondents who thought Canadian real estate prices would rise over the next six months dropped to 34.8—the lowest level since August and a sharp drop over the 40.3 indicated just a couple weeks earlier. (Source: Ibid.)

Consumer confidence is an important economic indicator. For starters, it reflects our optimism in the state of the economy, which is echoed in the way we save and spend. When Canadians are more optimistic, they spend money; when confidence levels are retreating, Canadians spend less money, indicating unease. The more confident we feel about the stability of our incomes and jobs, the more likely we are to spend.

Despite avoiding the housing crash that decimated the U.S. market and being one of the few countries to steer clear of the Great Recession, Canada has a stubbornly high unemployment rate. In January 2013, the unemployment rate was 7.1%, and by the end of the year, it had dipped only marginally to 6.9%. (Source: Statistics Canada web site, last accessed December 31, 2013.)

Unfortunately, weak consumer confidence and high unemployment are not the best ingredients for an economy that generates roughly 60% of its gross domestic product from consumer spending. (Source: “Household final consumption expenditure, etc. (% of GDP),” The World Bank web site, last accessed December 31, 2013.)

In spite of waning consumer confidence, the fact of the matter is that the Canadian economy is getting stronger, with demand in the Canadian housing market expected to remain robust across most provinces in 2014.

The Canadian Real Estate Association has projected that resales in 2014 will come in at 475,000 homes nationally, up from a previous 2014 forecast of 465,600. On top of that, it expects the national price for a home to rise to $391,100 from $382,200 in 2013. (Source: “Canadian Real Estate Association predicts a strong year in 2014,” December 16, 2013, Toronto Star.)

In an effort to help shore up the economy and prevent a housing market crash and recession (like the one experienced in the U.S.), the Bank of Canada has held the overnight lending rate at an artificially low one percent since late 2010. The low interest rate environment is supposed to make it easier for consumers and businesses to borrow.

In fact, thanks to the Bank of Canada keeping its policy rate at one percent (which impacts variable mortgage rates), more and more potential homebuyers are able to get mortgages. And the Bank of Canada has hinted interest rates will remain low for at least a couple more years.

So in spite of declining consumer confidence, the Canadian housing market remains robust. And with artificially low interest rates expected to stay put for the foreseeable future, 2014 will continue to be an excellent environment for potential homeowners.

First-time homeowners looking to take advantage of low mortgage rates or those looking to access the current equity in their home with a second mortgage should contact Canadalend.com or apply online . A mortgage specialist will help set up an appointment with an independent, licensed Canadalend.com agent at your earliest convenience.

If your New Year’s resolution is to find your dream home at the best mortgage rates possible, contact Canadalend.com.

Canada’s Finance Minister, Jim Flaherty, has said interest rates, which have been artificially kept near-record lows since September 2010, are going to go up over the long term, regardless of what international central banks do.

Because the Canadian and U.S. economies and monetary policies are closely linked, Canada’s mortgage rates tend to run closely with the U.S. housing market. For example, in January 2008, before the U.S. housing market crashed, the interest rate on a Canadian five-year fixed mortgage was 5.89%; today, five-year fixed rates are being offered near 3.79%.

South of the border, in January 2008, a five-year fixed mortgage was offered at 5.45%; today, they are hovering near 3.02%. The Federal Reserve has said it will keep its federal funds rate (which mortgage rates are based on) near zero until the economy improves. That means the Fed is waiting for an unemployment rate near 6.5%; currently, 7.3% of Americans are unemployed.

That said, economists within the Federal Reserve have said they would like to see interest rates kept low until the U.S. unemployment rate drops to 5.5%. On top of that, interest rates should be kept below normal (two percent) until at least 2020.

Meanwhile, the European Central Bank unexpectedly cut its benchmark rate to a record low 0.25% recently, in an effort to prevent the eurozone from slipping back into a recession, and would do so until at least 2015.

Back here in Canada, many have become accustomed to the near-record low interest rate environment. This has helped propel Canada’s biggest housing market higher: sales in the Greater Toronto Area (GTA) jumped by more than 19% year-over-year in October, while home sales increased from 6,713 last October to 8,000 this year. Prices have also been running in step. The average sale price in the GTA was $539,058, up 7.4% from the same period in 2012.

Prices were also strong on the other end of the country. In Vancouver, sales were up 37.8% year-over-year in October and an incredible 7.2% in September. Unlike the GTA, home prices in the Greater Vancouver Area slipped 0.5% year-over-year to $600,700.

On one hand, the Canadian government said it would intervene in the housing market only if it saw bubble-like indicators, which it says are not present right now. On the other hand, the Canadian economy isn’t doing so well that the Bank of Canada can raise its interest rates.

But it will—the question is, when?

The rise in interest rates could negatively impact those who have become accustomed to a low interest rate environment. The mortgage experts at Canadalend.com think it’s important to warn Canadians to be careful when taking on debt, since the cost of borrowing it will eventually start to rise; cutting into their daily expenses.

Whether you’re a first-time home buyer looking to get on the property ladder or you’re looking for a second mortgage or loan, it’s important to work with a mortgage brokerage that has a history of helping their clients achieve both their short- and long-term financial goals.

The licensed, independent agents at Canadalend.com do everything they can to ensure their clients make the most informed decision possible when it comes to getting a mortgage or loan. Canadalend.com agents help their clients get on a stronger financial footing.

There are a lot of different things to consider when it comes to finding your dream home: price range, ranch, bungalow, brick, mid-century modern, the number of bedrooms and bathrooms, whether you want a big backyard…the options are almost endless.

While shopping for a dream home is supposed to be fun, not many people feel the same when it comes to shopping for a mortgage. But since a home is probably the largest single purchase most Canadians will ever make, the experts at Canadalend.com believe it’s important for first-time home buyers to have a solid understanding of what to look for when it comes to finding the best mortgage.

Knowing what to consider can help home buyers better understand their financing options, which in turn will have a direct impact on their overall monthly costs. Knowing your options could also help you save tens of thousands of dollars in interest over the life of the mortgage, ultimately, helping you plan for a better future.

Down Payments – At Canadalend.com, we know that when it comes to the down payment, more is better. To get a conventional mortgage (one that does not exceed 80% of the purchase price), home buyers in Canada need to come up with a 20% down payment.

There are many benefits to having a larger down payment. Most significantly, it reduces the amount of your monthly principal and interest payment. It also decreases the amount of interest you pay over the life of your mortgage.

That said, life can be full of challenges, making it difficult to save up the full 20%. That said, you can still purchase a home in Canada with as little as a five percent down payment. Doing so, however, means getting a high-ratio mortgage, which entails purchasing default insurance, the cost of which is charged to the buyer as a closing cost or financed through the mortgage.

Mortgage Options – Interest rates are only one consideration when it comes to getting a mortgage. The independent licensed agents at Canadalend.com can show you a wide range of mortgage options and help you select one that best suits your lifestyle needs.

Fixed versus variable interest rate – With a fixed interest rate mortgage, homeowners get stability, as the interest rate and monthly payments stay the same throughout the term of the mortgage. With a variable interest rate mortgage, homeowners are susceptible to changing interest rates; if it goes down, you pay more on the principle, and if it goes up, more goes to interest. A variable interest rate mortgage opens the window to potential savings if interest rates go down.

Open versus closed mortgage – A closed mortgage has a specific term—anywhere from six months to 10 years. Closed mortgages also have limits on when they can be refinanced or renegotiated, and there may be charges if you do either one earlier than expected. An open mortgage is often negotiated for a shorter period and can be paid off at any time; this flexibility usually comes with higher interest rates.

Accelerated Payment Option – The faster you pay off your mortgage, the less you pay in interest. Homeowners can save money by choosing an accelerated payment plan (weekly, bi-weekly) or a shorter amortization period. It all comes down to lifestyle.

A shorter amortization period will mean higher monthly payments; the quicker you pay off your mortgage, the less you pay in interest. A longer amortization period, on the other hand, means paying less each month, freeing up much-needed cash.

While it’s important to get the lowest interest rate possible, there’s a lot more to consider when it comes to selecting a mortgage.

As the country’s leading low-cost private mortgage solution provider , Canadalend.com agents draw from hundreds of banks and lenders to help you secure the financial products best suited to your financial needs. If you are interested in obtaining a home mortgage or even want to know what your options are, visit Canadalend.com or apply online.