Mortgage Brokers in Canada
Surprisingly, one of the recently conducted surveys revealed that only 43% of people actually shopped around for the best mortgage, including mortgages packaged by brokers. Comparing rates of various lenders can help you save tens of thousands of dollars, get flexible terms and also get valuable assistance with hefty down payments.
Types of Mortgages in Canada
A fixed refinancing mortgage mortgage has a fixed rate of interest. The benefit offered by a fixed rate is that it remains constant throughout the life of the loan. These mortgages allow for consistency and are not dependent upon the marketplace. Experts recommend fixed rate mortgages so that borrowers as well as lenders can predict exactly what their payments will be every month.
With an adjustable rate mortgage, the interest rate is tied to the Bank of Canadas interest rates. The major benefit of an adjustable rate mortgage is the low monthly payment during the time that the economy is faring well. However, there is the risk that interest rates could go up substantially if the market is not favorable. Many lenders entice borrowers by offering lower initial interest rates, which can increase a few fractions of a point each year. Within a few years, these rates can be much higher than traditional, fixed rate loans.
One of the more popular mortgages in Canada is called a refi, which is the refinancing of one loan by taking out a new loan, using the same property as collateral. Borrowers are cautioned to make sure the savings outweigh any fees associated with the refinancing. The reason these mortgages have become so popular in Canada is because many borrowers wish to escape their adjustable rate mortgages.
Mortgage Market Prediction
Canadian mortgage rates are directly affected by the actions of the Bank of Canada. By monitoring the interest rate on bonds issued by the mortgage refinancing anyone can get an indication of interest rate directions. The bond market is essentially a reflection of investors interest rate expectation for the future of the Canadian economy.
Investors who do their homework know that bond rates have been declining. The decline in bond rates results in lower interest rates on mortgages in Canada. The Bank of Canada has backed away from increasing rates due to recent unrest in the market. However, there is speculation the Bank of Canada may slightly raise interest rates in the coming months.
Please contact Maryam for more information: Vancouver Mortgage Broker
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