John Benstead and the rest of the MorCan team discuss low rates on CIBC international.
John Benstead and the rest of the MorCan team discuss low rates on CIBC international.
John Benstead and the rest of the MorCan team discuss low rates on CBC international.
I derived this title from a report we wrote in December of 2008 when we had 1 office and went by the name Mortgage Marcus. With your help we have now grown to 3 offices and will be opening number 4 just before Christmas. In that December 3rd, 2008 report we advised all of our clients to consider the safety of a short term fixed rate to combat the increasing premium being priced on variable rate mortgages. It would seem that history is starting to repeat itself. Continue reading →
Two months can seem like an eternity in the fickle world of finance. Two months can see the optimistic foundations, on which future plans were based, crumble, dissolve in a sea of uncertainty and wash away the hope that lingered previously. On Thursday, the Bank of Canada announced it was to keep its overnight rate untouched once again. Talk had turned to “heightened financial uncertainty”, to contracting domestic growth levels and to US levels of growth which would be “weaker than previously anticipated”. A marked difference from the July 19th meeting, which adopted altogether more optimistic tones and foretold of a time in the near future when the monetary policy “will be withdrawn”, sentiments which were conspicuous by their absence at the latest meeting. Continue reading →
For the best part of 2011, speculation on the future of Canadian interest rates were dominated by predictions of rate hikes to come before the end of 2011. Many of the banks’ own economists were citing increasing household debt, decreasing affordability in parts of the Canadian housing market and a need to eradicate inflationary fears as contributory factors which would fuel the inevitable rise. However, the continued stagnation of the US economy, further lamented by its S&P downgrade and increasingly frequent mutterings of the, dare not say it aloud, “double dip” have represented somewhat of a game changer for all concerned. With the US Federal Reserve now signalling its intent to keep its key interest rate near zero through to the middle of 2013 and inflationary worries subsiding on home shores, the Bank of Canada (BoC) looks increasingly likely to keep interest rates fixed at current levels until at least the second quarter of 2012. Continue reading →
After a month of nail biting, furrowed brows and bated breath in the US, a resolution has finally been met. The Republicans and Democrats have reached an agreement to allow the debt ceiling to be raised, bringing an end to an arduous negotiation process which had all the civility and amicability of a Paul McCartney divorce settlement. So now that we edge away from the precipice and the four horsemen have been rerouted back towards Athens, it is time to assess the winners and losers arising from this war of attrition. President Obama is not happy, John Boehner is not happy and we’re even led to believe that somewhere beneath Michelle Bauchman’s taut, leathery exterior lies a disgruntled frown eager to show itself. So who are the winners in this torrid affair? The answer appears to be the Canadian mortgage holder. Continue reading →
In a time characterized by widespread economic turmoil across the US and Europe, there was a certain comfort to be taken in the mundanity of the Bank of Canada’s (BoC) report today. As almost unanimously predicted, the BoC left overnight rates unchanged at 1%, meaning the prime rate stays pegged at 3% and the variable rate mortgage holders of Canada continue to prosper. However, there were some nods towards a rate increase approaching on the horizon. The quote of the day being the warning that monetary stimulus “will be withdrawn”, a statement whose severity is underscored by the omission of the word “eventually”, which was mentioned at the BoC’s May 31st meeting. Continue reading →
The laws of gravity dictate that what goes up must come down but I’m afraid, when it comes to the laws of economics and interest rates, what goes down must come up. Ultra-low interest rates are only a short-term solution and not sustainable in the long run. This is something which all economists agree on. Unfortunately this is the point where the common consensus ends and opinions diverge. The issue which is most divisive amongst the experts at the moment is exactly when these rate hikes will begin. As recently as a month ago many experts were predicting that rates would remain at their current levels until as late as March of 2012. A tumultuous week in the markets has seen many of these experts revise their predictions, with many now citing September as the month to bring a halt to the rate freeze. Continue reading →
Citizens’ of Vancouver awoke today to the realization that their most prized assets maybe reaching a tipping point and not one invoked by the drunken swaying of Canucks fans. Mark Carney, in a talk yesterday (June 16, 2011), gave some thinly veiled, ominous warnings to the Canadian home-buyer about the potential for the existence of a bubble in the Vancouver market. Although Mr. Carney avoided use of the dreaded b-word he suggested the Vancouver market has become increasingly similar to a “financial asset market” with favourable borrowing conditions lending themselves to a market fed by fear and greed. With recent reports suggesting the Vancouver market lies third behind only Hong Kong and Sydney on the hierarchy of over-inflated property values and the average home in Vancouver now priced at 11.5 times the average household income levels it is hardly surprising Carney opted to speak out. Continue reading →