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- Sep 25, 2007
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Hi all,
An article from the April 23rd edition of The Globe and Mail (Globe Investor). Excerpts:
What a sweet time to be arranging a mortgage – we`ve got the lowest rates anyone can remember and they`ll be around for months to come.
So don`t rush into any decisions regarding a new mortgage, a renewal or an existing mortgage you`re thinking of breaking. The great recession mortgage sale isn`t even close to being over.
If anything, rates could fall slightly in the months ahead thanks to signs of a thaw in the financial market freeze-up that has raised the cost of mortgages and lines of credit in the past six to eight months.
Historically low five-year rates prompt a question if you`ve got a variable-rate mortgage: Is now the time to use the escape clause in your loan agreement and lock into a five-year mortgage?
If you`ve got one of those great old variable-rate mortgages with a discount off prime, the answer is no. Borrowing costs would have to rise close to two percentage points to put you on par with a five-year mortgage today at a great discounted rate.
The question of whether to lock in more recent variable-rate mortgages – those sold at prime plus a markup – requires more thought because of the cheapness of five-year rates right now.
"If you`re looking at the bottom of the market and you want five years of security, there`s definitely nothing wrong with a 3.95-per-cent rate," said Gary Siegle, regional manager with the mortgage brokerage firm Invis in Calgary.
http://www.theglobeandmail.com/servlet/sto...Story/Business/
Keith
An article from the April 23rd edition of The Globe and Mail (Globe Investor). Excerpts:
What a sweet time to be arranging a mortgage – we`ve got the lowest rates anyone can remember and they`ll be around for months to come.
So don`t rush into any decisions regarding a new mortgage, a renewal or an existing mortgage you`re thinking of breaking. The great recession mortgage sale isn`t even close to being over.
If anything, rates could fall slightly in the months ahead thanks to signs of a thaw in the financial market freeze-up that has raised the cost of mortgages and lines of credit in the past six to eight months.
Historically low five-year rates prompt a question if you`ve got a variable-rate mortgage: Is now the time to use the escape clause in your loan agreement and lock into a five-year mortgage?
If you`ve got one of those great old variable-rate mortgages with a discount off prime, the answer is no. Borrowing costs would have to rise close to two percentage points to put you on par with a five-year mortgage today at a great discounted rate.
The question of whether to lock in more recent variable-rate mortgages – those sold at prime plus a markup – requires more thought because of the cheapness of five-year rates right now.
"If you`re looking at the bottom of the market and you want five years of security, there`s definitely nothing wrong with a 3.95-per-cent rate," said Gary Siegle, regional manager with the mortgage brokerage firm Invis in Calgary.
http://www.theglobeandmail.com/servlet/sto...Story/Business/
Keith