Fixed vs. Variable: the debate continues

Since late in 2008, the Canadian Mortgage Lending market has been experiencing a dramatic period of change. From fluctuations in interest rates to the emergence and disappearance of home financing products, the past 24 months have provided potential and existing home owners with a wide range of opportunities and challenges. Now, as the markets begin to settle, a new debate has emerged for the Canadian Home Owner: Fixed vs. Variable. Over the course of the coming weeks, we will discuss some of the potential benefits and challenges associated with both Fixed and Variable rate mortgages. We'll start of with Fixed Rate Mortgages.

5 year fixed rate mortgage have continued their downward trend through the first 2 weeks of December. Many are expecting to see even further decreases in rates over the course of the coming winter months, as buyer activity shrinks in the face of subzero temperatures, and a general post holidays slump in real estate activity. Fixed rate mortgage interest rates remain at or near historical average lows, and provide an excellent opportunity for existing and potential home owners to secure a great interest rate for the next 3 - 5 years. By taking advantage of a historically low mortgage interest rate, home owners can have peace of mind knowing that at least one component of their home ownership cost will be a constant for the near future.

However, while security is always great, variable rate mortgages are once again becoming increasingly attractive. As Canadian mortgage lenders become more confident in the market, and credit becomes more abundant, look for even more attractive Variable Rate Mortgage products to come out. In fact, over the past 12 months we've seen a tremendous shift in Variable Rate products --from Prime + 1.25% earlier this year, to now Prime - 0.25%! With Prime currently sitting at 2.25%, home owners can take advantage of as low as a 2.00% interest rate, and significantly increase their interest savings.

The debate will continue with next week's blog post, but for more information in the meantime call one of the qualified Mortgage Associates at Alberta Mortgage at 780-479-2222 or visit http://www.albertamortgagecentre.com.

5 Year Fixed Rates Falling --Closer to September Levels

As predicted a few weeks ago, 5 year fixed mortgage interest rates have fallen. From a high of 4.39% in mid-October down to 3.99% today, the situation for home buyers is improving. We might not see rates fall much (if any) lower, but look out for a relatively long stretch of continuously low mortgage interest rates. For homeowners looking to take maximize their savings over the course of their mortgage term, a Variable Rate Mortgage may be the solution, as home owners will be able to take advantage of a historically low Prime interest rate for the time being, and then lock before rates go up.

For more information regarding mortgage interest rates and trends, contact one of the qualified mortgage professionals at Alberta Mortgage today @ 780-479-2222 or visit us online @ http://www.albertamortgagecentre.com.

"Prime -" Variable Rate Mortgages Are Back!

This week, "Prime -" came back. Today, a few of our mortgage lenders announced the return of "Prime -" mortgage products in Canada. Existing and potential Canadian Homeowners can now get a 3 or 5 year Variable Rate mortgage at Prime - 0.10%!* Considering just 8 months ago we were looking at variable rates as high as Prime + 1.50%, the new rates are very welcome news.

To find out how much you could possibly save by switching to a new variable rate mortgage through Alberta Mortgage, call one of the qualified mortgage professionals at Alberta Mortgage today, or apply online.

*Subject to qualification criteria

Mortgage Interest Rates Continue Dropping

Five Year Fixed Rate mortgage interest rates continue to fall this week down to 3.89%,* further increasing affordability for existing and prospective Canadian home owners. Similarly, recent downward pressure on the Variable Rate side has led to the resurrection of the "Prime -" mortgage.

As the Canadian economy continues to recover from the economic downturn, look for even more competition in the Variable Rate market, further increasing affordability for Variable Rate Mortgage holders. However, many are forecasting that a recovered market will also mean significantly higher fixed mortgage interest rates. For more information about interest rates, and to get pre-qualified, contact one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or Apply Online @ www.albertamortgagecentre.com
.

* subject to qualification criteria.

On New News, Variable Rates Looking Attractive

Variable Rate Mortgages are looking more and more attractive. With a combination of the recent news that the prime rate will remain unchanged until at least the second quarter or 2010, and no reason to expect a dramatic rise through the year and the fact that Canadian mortgage lending institutions are once again competing for variable rate business, Variable Rate Mortgage holders are seeing significant savings. Considering that the same homeowner can see savings of over 1.5% on their mortgage interest rate between going with a variable rate over fixed rate mortgage today(a savings of $4,385.96 over a 12 month period!), the Variable Rate Mortgage is once again looking like a viable home financing alternative.

For more information about Variable Rate Mortgages, or to see what you could save, call one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or Apply Online at www.albertamortgagecentre.com.

BOC Sees Recession Turnaround in 3rd Quarter

It looks like we have finally reached the promise land. After nearly 2 full years of a slowing economy, it appears that things have turned around. The Central Bank of Canada predicted that Canada would be heading out of the recession in the 3rd Quarter of 2009. The data is not out yet, but it is likely that the Bank will have forecasted correctly, as many of the current market indicators reflect a once again growing economy(visit my blog entry about market indicators here). Even with this news, the Bank remains prudent and has not yet raised its key interest rate from 0.25% --meaning variable rate mortgage holder are safe, for now.

For homeowners with existing Variable Rate Mortgages in place, this may be the time to convert to a Fixed Rate Mortgage –and prolong the one good part of the recession. As the economy recovers, fixed rates will continue their upward trend and the Prime rate is sure to rebound. For instance, in 2009 the 5 year fixed rate has gone from 4.99% to 3.29% to 4.09%* today. As the market recovers, expect to see higher five year fixed rates --as the market compensates for government cash infusions over the past 24 months.

For more information about interest rates, or to discuss the available options with a mortgage broker, call Anuj Gupta, AMP, BComm, Mortgage Associate with Alberta Mortgage @ 780-479-2222 ext 14 or visit http://www.albertamortgagecentre.com.

*subject to qualification criteria

Are we turning the corner? My predictions:

Over the past month, some interesting things have happened; the Canadian Mortgage Bond Market has inched its way up, the Canadian Dollar appears to be leveling off, real estate sales have strengthened across the country, Oil is up (from where it was in February), the financial indexes aren't moving as drastically as they had been earlier this year, and job loss numbers have decreased month over month. What does all this news mean? is Canada out of the woods yet, or is this just the type of statistical anomaly to be expected in the economic climate we live in today?

To be completely honest, I don't know what all this news means. However, what I believe is that many factors that would indicate prolonged stability returning to the Canadian economy are here. Many financial analysts around the Globe are forecasting that the Canadian economy should recover in late 2009. If we are in fact beginning to climb out of the chaos that was the later half of 2008 and first half of 2009, things will be changing --almost all for the better, but not only for the better. In Particular, a recovering economy could mean higher interest rates, and larger accompanying monthly mortgage payments for Canadians looking to purchase a home, and for existing homeowners with Variable Rate mortgages. We have already seen fixed rate mortgage interest rates move up by nearly 0.8% since May as some albeit muted confidence has returned to the market. For those with variable rate mortgages who are wondering when to lock in their mortgage interest rate --this may be a time to look at rates and evaluate their situation. Of course, what we are seeing could simply be that statistical anomaly many expected to see, meaning we maybe haven't reached the end of this 'gray rainbow' just yet. It would certainly seem to be a good time to prudently evaluate your finances.

For more information, or to discuss the pros and cons of locking in a variable rate mortgage at this time, call Anuj Gupta, AMP, BComm, Mortgage Associate with Alberta Mortgage at 780-479-2222 ext 14 or visit www.albertamortgagecentre.com today.

5 Year Fixed Rate Mortgage Interest Rates Fall...Slightly

5 year fixed rate mortgage interest rates have fallen slightly after experiencing upward movement by as much as 0.6% over the previous 45 days.

As of today, 5 year fixed rate mortgages are available with an interest rate as low as 4.29%, subject to qualification criteria. We have also seen some downward movement in the variable rate products offered by many lenders, now available as low as Prime + 0.35% (2.60%), subject to qualification criteria.

For more information, call Anuj Gupta, AMP, BComm of Alberta Mortgage @ 780-479-2222 ext 14 or visit us online at www.albertamortgagecentre.com.

With the Market Recovery Just Around the Corner, Rates May Be on the Move

Today, the Bank of Canada has announced that they will be reigning in some of their lending stimulus programs now that the economy appears to be recovering. Should part of this reigning in involve upward movement of the Bank's key overnight lending rate, which would meaning a higher Prime lending rate --home owners with Variable Rate Mortgages would see increases in their mortgage rates and payments.

Fixed rates still remain well below historical Canadian averages, however, Fixed Rate Mortgage interest rates have seen upward movement by as much as 0.5% since May, 2009. To learn more about interest rates, and see if now is possibly the right time to do something about your mortgage, contact one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222, or visit www.albertamortgagecentre.com.

Indications are that fixed rates may be on the rise...

It appears that fixed mortgage interest rates may be getting ready to move again --but upwards this time. As discussed in a previous blog here, fixed mortgage interest rates are tied to the Canadian Bond market --as compared to variable rate mortgages, which move with the Bank of Canada's key overnight lending rate.

With recent recovery in the bond market and stronger than expected real estate activity, some lenders have already begun raising their five year fixed rates. If you were waiting for the bottom to refinance, it is possible that you missed it. Still, mortgage lending rates are well below historical averages and still offer a tremendous opportunity for existing home owners to reduce their living expense, and to help potential home owners qualify for the purchase of a home.

If you want to learn more about fixed mortgage interest rates, or would like to get pre-qualified or discuss the possibility of refinancing, call one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com.

It looks like things might be getting ready to change

It appears that things may be on the verge of changing in the world of fixed mortgage interest rates. Below is some information about bond rates in Canada and their effect on fixed mortgage interest rates.

• Canadian 5 yr bond yields + .07bps to 2.09 - Four weeks ago it was 1.86. The spread today vs the 5 year rate is now down to 1.67%.
• http://www.financialpost.com/markets/market-data/money-yields-can_us.html?tmp=yields-can_us NEW LINK

The yield, rate of return on your bond, can be read through a yield curve, which is the pattern of yields on bonds. This increase in bond yield is something to watch. If the bond yield continues to go up, the spread will continue to shrink and this could be a trigger for interest rates to rise!

For more information about interest rates, or to apply call one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com.

Secure your interest rate today and enjoy peace of mind knowing you have one of the lowest mortgage interest rates in Canadian history

Canadians can now get a 5 Year Fixed Rate Mortgage with an interest rate of 3.59%! For existing and potential homeowners looking to get a great rate on their mortgage, this may be the solution for you.

To learn more, get pre-approved, or get started --call one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com/ today!

New Mortgage Product: 5 Year Fixed Rate Mortgage at 3.59%*

Canadians can now get a 5 Year Fixed Rate Mortgage with an interest rate of 3.59%! For existing and potential homeowners looking to get a great rate on their mortgage, but who are not interested in making large lump sum payments or moving within the next 5 years this mortgage may be the solution for you.

To learn more, get pre-approved, or get started call one of the qualified mortgage professionals at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com today!.

*Subject to qualification criteria

Bank of Canada Prime Rate Falls Again

The Bank of Canada's overnight lending rate has fallen again, and with it many lenders are expected to --or already have reduced their prime lending rates to 2.25%. Now even lower, this rate is provides further opportunity for Albertan homeowners to reduce their monthly mortgage payment expense.

If you already have a variable rate mortgage and want to learn about how a lower prime interest rate affects your mortgage, or to get pre-qualified, call one of the qualified Mortgage Professionals at Alberta Mortgage today at 780-479-2222 or visit www.albertamortgagecentre.com.

Fixed Mortgage Interest Rate Fall...Again

Just when it appeared that five year fixed mortgage interest rates had reached the bottom, rates have fallen again. As of April 15th, 2009 existing and potential Albertan homeowners can get a five year fixed mortgage with an interest rate as low as 3.69%, subject to qualifications.

If you want to find out how much you could possibly save be refinancing your existing mortgage, or to pre-qualify yourself for a mortgage call Anuj Gupta, AMP, BComm, Mortage Associate at Alberta mortgage at 780-479-2222 ext 14 or visit www.albertamortgagecentre.com.

Fixed Mortgage Interest Rates Continue to Fall

Five year fixed mortgage interest rates have fallen again, creating even greater opportunity for prospective home buyers who were unable to afford home ownership in the past. the combination of existing real estate values and historically low fixed mortgage interest rates means home ownership is now much more affordable than it was over the past 3 years.

To find out if you qualify to purchase a home contact one of the qualified mortgage associates at Alberta Mortgage at 780-479-2222 or visit www.albertamortgagecentre.com.

Protect the Equity in Your Home

With real estate values having declined by as much as 20%, some Albertan home owners are finding themselves carrying mortgages that are equal to and in some cases even larger then their property values. In this type of scenario it is very important for home owners to bring down the principal portion of their mortgage as fast as possible in order to create some equity in their homes in order to build a nest egg or even refinancing opportunities for the future. There are many strategies that home owners can use to quickly and effectively bring down the size of their mortgages. Below, we will outline a few simple strategies that can pay dividends for years to come.

1. Increase the frequency of your payments
When choosing a payment scheme, make accelerated bi-weekly payments in order to get a "free" principal reduction which would be equivalent to one full mortgage payment every year, painlessly.

2. As income rises, raise your mortgage payments.
While disposable income is fun to spend, putting it towards your mortgage will save you a lot of money in interest payments which will be even more fun to spend in the future.

3. Round your payments up, instead of down.
Over time, by making even extra nominal payments of $20 to the principal, the amount of interest that you will be saving yourself from will amaze you.

4. If mortgage rates fall, don't reduce you payment scheme
If so far, you the payment amount has not been an issue of concern, then there is no benefit in reducing the payment amount. However there is a downside to reducing your payment being that interest payments will grow.

By taking advantage of these easy to use options available in most mortgages (as well as some other simple strategies)arranged by the mortgage professionals at Alberta Mortgage, home owners can save themselves hundreds and even thousands of dollars in interest on their mortgages. In addition to these simple strategies, with the help of one of a qualified mortgage professional at Alberta Mortgage you can save tens of thousands of dollars in interest without making any significant changes to your existing spending patterns. To find out more, call Anuj Gupta, AMP, BComm, Mortgage Associate of Alberta Mortgage at 780-479-2222 ext 14, or visit www.albertamortgagecentre.com.

Fixed Mortgage Interest Rates Offering Great Opportunity

Five year fixed mortgage interest rates in Canada have fallen to near record lows in 2009. With fixed mortgage interest rates now having fallen as low as 3.99% (subject to certain terms and conditions), Albertan homeowners can possibly take advantage of this tremendous opportunity to significantly reduce their monthly living expenses by way of reducing their monthly mortgage payments. And not only will this reduction provide immediate benefits in the form of reducing monthly expenditures during turbulent economic times, as the Albertan economy recovers Albertan homeowners will continue to reap the benefits of the lower monthly mortgage payments for the entire remainder of the mortgage term they arranged for during these difficult economic times.

To find out if you qualify and to find out how much you could potentially save, contact Anuj Gupta, AMP, BComm, Mortgage Associate of Alberta Mortgage at 780-479-2222 ext 14 or Apply online at www.albertamortgagecentre.com.

Rent or Buy in Edmonton? a no brainer today

Now that the Alberta real estate market has finally become a true buyers market, and with 5 year fixed residential mortgage rates nearing all time lows there is really no reason to continue renting. Today, mortgage payments are equal to and in some cases even lower than market rent rates for similar properties. Why rent when you could own for the same monthly payment?

Consider this, the average rent in Edmonton in 2008 was $930.00. At the same time, the average purchase price of a two bedroom apartment condo in Edmonton is $195,000. With a 5% down payment, on a purchase price of $195,000, you, as a home owner could be looking at a mortgage payment of $815.49 a month. Why pay your landlord's mortgage and let them reap the benefits of property value appreciation instead of you?

To find out if you could qualify for a mortgage loan, call Anuj Gupta, AMP, BComm of Alberta Mortgage at 780-479-2222 ext 14 or Apply Online at www.albertamortgagecentre.com.