June 1st, Paul Vieira, Financial Post  

OTTAWA -- For the first time in nearly three years, the Bank of Canada on Tuesday hiked its key interest rate by 25 basis points to 0.50%, as the domestic economy rebounds strongly against the backdrop of an "uneven" global recovery.
However, it signalled in its accompanying statement there is "considerable uncertainty" in the economic outlook given fiscal and financial unrest in Europe. As a result, further rate hikes "have to be weighed carefully" against global and domestic developments.
"This decision still leaves considerable monetary stimulus in place, consistent with achieving the 2% inflation target in light of the significant excess supply in Canada, the strength of domestic spending and the uneven global recovery," the central bank, led by governor Mark Carney, said.
That led some analysts to suggest there is no guarantee the central bank would raise rates again at its next scheduled meeting in mid-July.
"The July meeting is not a slam dunk," said Jonathan Basile, an economist at Credit Suisse in New York. "The downside risk is causing policymakers to lower the hawkish sails."
The statement's ambiguous, cautious tone led to a pullback in short-term bond yields and a US1¢ drop in the Canadian dollar. Douglas Porter, deputy chief economist at BMO Capital Markets, said it was as if the central bank was "almost bending over backward to indicate that this is not necessarily the start of a relentless campaign to crank rates higher."
Still, with the move, the Canadian central bank becomes the first among its Group of Seven peers to raise rates, and one of the few industrialized countries to do so. The last time the Bank of Canada raised its benchmark rate was in July of 2007.
The move signals higher borrowing costs for households and businesses that have loans tied to prime rates charged by chartered banks. (Prime tends to move in unison with the central bank's benchmark rate.)

The decision emerged a day after Statistics Canada reported the domestic economy reported its strongest quarterly performance in over a decade, as GDP expanded by a robust 6.1% in the three-month period ended March 31. The economy benefited from strong consumer spending, a robust goods-producing sector and an aggressive rebuilding of inventories by businesses.
There was a tug of war of sorts in the marketplace in the days leading up to Tuesday's decision about whether the Bank of Canada would pull the trigger and raise rates. A set of stronger-than-expected economic data, from retails sales to inflation, suggested a rate hike was warranted. Countering that, however, was market uncertainty over the spillover of fiscal problems in certain southern European nations, and the health of that continent's banking system.
In the end, the central opted to raise its key rate, and begin the process of withdraw extraordinary stimulus from the economy. But the Bank of Canada's statement explaining the rate hike went to some length to acknowledge the present risks to the global and domestic outlook.
"The global economic recovery is proceeding but is increasingly uneven across countries," the central bank said, noting the strong momentum in emerging economies and the "possibility" of renewed weakness in Europe.
The recovery in "most" developed economies remains "heavily dependent" on low interest rates and government spending, it added.

Read more: http://www.financialpost.com/news-sectors/story.html?id=3096853#ixzz0pcxzDvSr  

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Tougher mortgage rules to cut down default risks

Date: Tue. Feb. 16 2010 10:52 AM ET

Ottawa has tightened the rules for obtaining a government-backed mortgage, as it casts an eye towards expected future interest rate increases and the risks those pose for Canadian homeowners.

Finance Minister Jim Flaherty announced Tuesday morning that prospective homeowners will soon have to meet the requirements for a five-year, fixed rate mortgage -- as opposed to the three-year standard in place right now. The rule will apply even if they choose a mortgage with a lower interest rate and shorter term.

for more .....

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Check out Vancouver Distress properties. Free list with pictures

Here is the latest as to what mortgage rates are doing.

The US job less figures were lower than everyone expected and marked the first reduction in job losses in the US since April 2008. That coupled with the recent success of the US stimulus package "Cash for Clunkers" has sparked some positive moves in the equities markets.

GM has reported that they are very happy with the "Cash for Clunkers" program and are now looking to increase production to restock vehicles.

Bonds sold off a bit on the expectations of rising stock prices.

The spreads for mortgages has been stable over the past few weeks, however, the 5 year spread is only 1.69 today and we could see very small increases in the fixed rates if the stocks continue to gain strength. Variable rate mortgages are very stable at this time.

Today's Best Rates:

1 yr               2.55%
2 yr               2.85%
3 yr               3.45%
3.5 yr            3.75%
4 yr               3.89%
5 yr               4.15%
7 yr               5.15%
10 yr             5.25%

Variable        prime +.3%

Courtesy of;

Paula Siemens -AMP
INVIS - SIEMENS GROUP

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-506-8481 or email me at jeff@jeffreystark.net

You know, when you talk to professionals in any trade or business, you always get more. You get more information, more choices and more service.

And you know what, the best part is that, real estate agents, and mortgage brokers give you all this great service and information for FREE!!!

Halooo! Are you too proud to ask?  You think you know everything?

I have continuously saved money for my Buyer's and got better prices for my Seller's by using the latest marketing techniques and knowledge.

The same goes for mortgage brokers. They don't charge you anything but can provide you with a lot of good information and guide you the the best mortgage products available. All for FREE!

Here is an example. Even I didn't know much about these 50/50 mortgages. But my broker does.

Here is what he has to say about it.

"Up until the last couple of weeks I haven't been a fan of the 50/50 mortgage (details below). However every mortgage type has it's place and time. If it wasn't for the Bank of Canada's re-affirmation that Prime rate will stay where it is until mid 2010 (a whole other topic) and the fact that after a recent bump in rates from historical lows at the beginning of June (3.79 to 4.49% in 2 weeks) and now a bit of a downward trend, for the moment a 50/50 can make sense... IF you have someone that will tell you when to pull the trigger to lock-in the variable portion.

Hybrid mortgages - also known as 50/50 mortgage products - include an equal mix of fixed-rate and variable-rate components within your single mortgage. This means you get the best of both worlds - the security of fixed repayments with the flexibility of a variable rate.

Although there was a time in recent years when mortgage experts considered a variable rate mortgage as the obvious choice to save mortgage consumers money over the long term, with fixed rates remaining near historic lows, fixed makes more sense to me. But with prime said to stay low for the better part of a year, a 50/50 mortgage may be a great alternative for you.

In essence, since it's extremely difficult to accurately predict rates over the long term, a 50/50 mortgage offers interest rate diversification, which can help reduce your level of risk.

If you opt for the Dominion Lending Centres 50/50 Balanced Mortgage, half of your mortgage is locked into a five-year fixed rate and half is at a five-year variable rate. You can lock in your variable-rate portion at any time without paying a penalty. As well, each portion of the 50/50 mortgage operates independently - like two separate mortgages - yet the product is registered as only one collateral charge.

The 50/50 mortgage product is well-suited to a variety of borrowers, including those who:

• Would normally go fully variable but are afraid prime rate is at its bottom
• Aren't comfortable being locked into a fully fixed rate
• Can't decide between a fixed or variable mortgage

Some features of the 50/50 mortgage include:

• 20% annual lump-sum pre-payment privileges
• 20% annual payment increase ability
• Portability (the option to transfer your existing loan amount to a new property without penalty)

As the 50/50 option is a fairly new offering, according to a recent study by the Canadian Association of Accredited Mortgage Professionals (CAAMP), 5% of Canadian mortgage holders have 50/50 mortgages compared to 28% with variable-rate mortgages and 68% with fixed-rate mortgages. But many experts believe the 50/50 mortgage is quickly gaining momentum.

As of today, someone going with a 50/50 mortgage would save about $890 per $100,000 of mortgage per year with little risk.

If you have any questions about the 50/50 mortgage product and whether it's right for you, feel free to give me a call so we can discuss your options. If you know anyone purchasing a home, refinancing or renewing their mortgage, suggest they give me a call for a brief chat to determine if a 50/50 mortgage makes sense for them.

As my variable rate clients know, they get the calls to pull the trigger and the advice to consider every time rates look like they are going to make a major move upward. This advice is key to being successful with any mortgage that is variable. Few brokers and NO banks offer this level of commitment.

Greg

If you want more information or want to talk to a mortgage broker about all the available options, just give me a call at
604-506-8481

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-506-8481 or email me at jeff@jeffreystark.net

This may not be as a sophisticated answer as you may expect, but from talking to my mortgage broker connections, this is how I see it.

There are two different institution dealing with interest rates etc. There is a Bank of Canada who controls the "Bank Rate", the overnight rate, and then there is the Government of Canada who controls the interest rates.

Well, there are also the banks and lending institutions that use these guidelines and set their own mortgage lending rates as they see fit.

The Bank of Canada has set dates for announcing their bank rate and they are designed to keepinflationin check and control the economic trends.

Government of Canada on the other hand has to raise money for it's operations and the most common is to sell government bonds. These are guaranteed investments and in tough times are a pretty solid investment, and favored by more cautious investors. Bonds earn you money trough yields, in other words interest.
Investors move their money around always looking for the best return on their investment.

When the stock market starts moving, investors tend to gravitate to stocks and sell their bonds, or don't buy them anymore. What is the government going to do? They need their money to run their business and in order to get the investors back, they increase the yields.

Since the mortgage rates have close ties to thebond markets, with the spread, the difference between the yield and interest rates of up to 2% the longer term mortgage rates will rise accordingly.

This may be a simplified explanation of where we are going, but everything points to up!

If you are a buyer and thinking of purchasing in the next few months, get yourself appoved and watch the market. Nobody has a crystal ball, but this kind of propection does not cost you anything.

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-506-8481 or email me at jeff@jeffreystark.net or visit my web site at www.jeffreystark.net