Mortgage Rates

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Mortgage interest rate is only one of the three factors that determine your mortgage payments. Do you know what the other twos are?

You will find the answer in my free eBook.

Advertised rates are largely artificial. What rate you qualify for will depend on you and what your needs are. ”Depending on you” means primarily your credit (Beacon) score, whether you have steady employment (work) and if you can proof your income. Some type of property and/or location will not qualify for the best discounted rates either. The best rates are reserved for prime borrowers and prime properties.

Beware of advertised cheap mortgages. They may be bait and switch tactics. Like everything you buy, you need to find out if what you are paying for is really what you need. Don’t buy something just because it is cheap. In the case of mortgages, you should be concerned with after-sale services. Will you get service when you have an issue afterwards.

You need to know fixed mortgage rates have nothing to do with the Bank of Canada benchmark rate (the over-night rate) nor the Canadian Bank Prime Rate (rate reserved by the chartered banks for their best customers). The over-night rate is set by the central bank, for economic reasons. That is the rate the chartered banks can borrow from the central bank, if they even need to. They are tools to try to influence the money market. However, money markets react to more financial and economic factors in addition to government policies. Fixed mortgage rates are directly linked to Government Bond yields. If you are interested, you should bookmark the following Web Site:

http://www.bankofcanada.ca/en/rates/bonds.html

Fixed mortgage rates are usually priced between 1.5% to 3% above the corresponding Government of Canada Bond Yield for the corresponding term. For 5-yr fixed mortgage rate, go check out the 5-yr bond yield. That’s how you can follow a trend and see where rates may be.

Here’s another useful Web site:

http://www.financialpost.com/markets/market-data/money-yields-can_us.html?tmp=yields-can_us

Most cheap (no frill) mortgages are what we called “closed-closed” mortgages. That means you are locked in tight with the lender for the rest of the term of the mortgage. You are not allowed to payout or refinance early except when you are selling your home to a third party at arms-length.

Also, ask the cheap lender or the broker how they calculate their IRD. (Click on “Refinancing” on the left for more details.) Remember the lowest rates are not necesarrily the best rates for you.

If you really want to know about rates, get my free eBook and you will be put on my eNewsletter distribution list. I will have current mortgage rate information in my eNewsletter. You can also follow my blogs.

Flm historical- rate-sheets-july-2010

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C. Steinke

"The level of service provided by Leo is exceptional! Everything from the initial contact through to the closing agreement. I especially appreciate the ongoing follow-up that he provides still to this day (four months after the fact). I think he's magical:) I definitely hope to work with him again the future and highly recommend him to anyone requiring an exceptional level of service."

N. Waggoner

"I had never considered using a mortgage broker before - I had always just accepted the rates offered by the charter banks as the best ones available. Leo found me a better rate than the one being offered by my bank, and the loan officer had to match it to try and keep our business! Leo continued to keep me informed of the best rates available, and offered me all kinds of insight on how to get the most for my money.

Although I decided in the end to stay with the bank, I definitely benefited from Leo's advice, and would recommend his services to anybody considering a mortgage."

Victor R. Eng

"I was surprised and prepared to jump through a lot of red tape and hoops, when Leo said that the mortgage was done. With his experience and track record, the Brokerage firms ( Time is money ) accepted his proposal without questions and all done within 24 hours period. As the interest went down before the closing agreement, Leo got a further reduction in the mortgage. The Deal was done, but he was willing to go the extra mile.

I have gone through many mortgages and the difference in his service is ‘night and day’. Leo has gained a Friend and a lifetime client."

Rob Angus

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Leo Lee took on the task. It wasn't easy, but he stuck with it until he found the right lender. I recommend Leo - he's tenacious, creative and he gets the job done."