bank prime drops

the bank of canada reduce the bank rate to 4.25% today - a reduction of .25
this will translate to a drop in bank prime from 6.25% to 6.00%which will mean the floating interest rates will be as low as 5.4% versus the fixed 5 year at 5.79-5.99
rest assured the US fed will reduce rates next by .25-.50 and this will precipitate the possibility of a further reduction to our prime on Jan 22........unless.........
the US is building a fund to protect their dollar and their housing market. They are intent on allowing cities states etc to issue tax exempt bonds which will provide funds to enable them to buy back the subprime paper whose rates are being reset at higer interest rates.
this should put a floor under the subprime problem - investors will be happy to invest their funds tax free into the mortgage market provided the borrowers are qualified and the rate provides payments which will not trigger a default....time will tell ...but i think the US will try to put a run on the shorts and cause a stampede thus higher bank and stock prices..time will tell
greygoose out...by the way....red wine is tasty

turmoil.....continues

as outlined last month - the canadian finance minister outlined tax cuts to keep everyone happy. The canadian dubloon continues to stay above par in respect to the us greenback - oil is nearing 100 per barrell- gold is over 800 and yet the markets are dropping like stones as the financial institutions and others admit to their transgressions with respect to the mortgage market and subprime market.
This will continue for a few more months - but rest assured people will grow tired of this news and focus on something else shortly.
for now - if you want to refinance call us - its time to get rid of credit card debt / consolidate to lower payments and batten down the hatches.

greygoose
out

fed moves - flaherty budget update.....

tomorrow the fed reserve in the US will likely reduce the interest rates by 1/4 of 1 percent
this has caused the canadian dollar to spike in anticpation near the 1.05 level.
and finance minister James Flaherty will spew more information tomorrow after the market close - will he destroy the market further like the trust unit debacle of last halloween..or will he reduce personal and corporate taxes.
my bet is he will propose lower taxes of some sort - since they are raking in a surplus of 1 billion per month or more.
wait and see
greygoose out....

topsy turvy which way to go ....?

In the past few months we have seen the US subprime debacle spill over to our own mortgage market. Many of the lenders who dabbled in subprime in Canada have pulled in their horns, cutting back on loan to values - increasing interest rates or ceasing lending altogether.
In the meantime the Canadian dollar (doubloom) has exceeded par against the US dollar.
The problem is this will hurt our manufacturing companies in Canada as they find it difficult to compete when our exports are expensive in the eyes of our trading partners - especially the US.
Recently the jobs numbers showed a major increase in new jobs which has once again raised the spectre of 'Inflation'...duh.... no kidding
just check your pocket book after you pay auto expenses - hydro - food costs etc -
Rumour has it the bank of canada may increase rates to slow the loonie and the economy hopefully - this anticipation is welcomed by the lending institutions as they are raising interest rates in advance of any move - from 5.79% to 5.99% as of tomorrow.
Keep watching - see if they raise again when the bank of Canada moves......

the world is unfolding as it should

It would appear interest rates have stabilized for the moment - the bank of canada would love to increase rates and slow our economy -but that would cause the loonie to rise and destroy our manufacturing sector...catch 22
i suspect the bank will hold rates steady and let the US drop rates - hoping we can then keep the loonie under control
time will tell

reality check

well - i guess i was ahead of my time. I predicted a credit crunch -but did not think it would materialize this quickly.
The past week has been a real stomach churner. But realize the world is not coming to an end.
it would appear now a slow down is upon us - a recession is possible.
Rates will likely stabilize and possibly drop
keep your head - pay down the debt as quickly as you can

greygoose out

time flies - its the end of july

time flies - and interest rates have held steady for a few weeks - will they go higher ????
Probably -but likely not more than 1/2 of a percent.
the canadian dollar will likely do the majority of the work for the bank of canada and slow the economy - but a disturbing item is the current retail sales which showed a dramatic increase.... to me that means our exports are expensive due to the dollar and the imports are cheap - so people are buying - but are they paying cash or using credit ??? My gut says credit and that will eventually cause a credit crunch - payoff debt - consolidate - reduce your monthly costs - batten down the hatches and await the coming storm - it may not be this year - but likely sometime next year we will see problems arise
greygoose out

back from san antonio

We just returned from the Kiwanis International Tournament in San Antonio Texas
What a great spot - if you get a chance to go and visit the Riverwalk - Go..its a great spot.
Hot - Humid
Now back to reality
Interest rates have moved up - but how far will they go ?
Prime increased by 1/4 of 1 per cent to 6.25 - and the bond market has priced in another increase in September - but i dont see interest rates skyrocketing.
Now is the time to consider either locking in - if you are nervous
or take Prime less .90 on a variable rate which would equal 5.35
in any event rates are not high by historical standards -
greygoose out

lenders going crazy

why do lenders not seem to care whether they approve files or not ???? - rates are moving up and they are currently cherry picking the market, turning down anything that doesnt suit their fancy - its time to slow the process down - make sure all conditions are accepted prior to agreeing to purchase properties. The world is spinning much too fast.

summer ?...winter ? hard to tell

Well today the wind was cool and it felt like fall in the middle of June. The past week i lost one of my aunts on my mothers side at age 75 - far too young. Joanne has gotten her cast off and now has a walking cast - so hopefully we can return to some form of normality.
Rates appear to be topping out for now - July will be interesting as the bank of canada appears set on raising the prime rate -to ensure the economy cools down - perhaps a case of overkill - time will tell.
prediction for the next year - US dollar will drop the canadian dollar will stabilize around 95 - cold will top 800 - cash will be king.
liquidity crunch will cause rates to rise - especially for consolidation fo debts.
greygoose out.

rates go up up up up......

Well the mortgage rates have moved up 4 times this month and now stand around 5.8% for 5 year money up from 5.10 - a move of approximately 3/4 of a percent.
What will happen next ? - I suspect the lenders will try to move the rates up to 6% as I have long held lenders do not like lending money under 6%.
The canadian dollar considers to hover around 93-94 cents and rumours persist the bank of canada will raise rates by 1/4 at the end of July - I still question the reasoning since the dollar is slowing our exports and should be cooling the economy - the increasing mortgage rates should serve to slow the housing market and therefore all the subsequent spin off factors.
Time will tell - for now make sure you lock in rates for 120 days especially if you have a mortgage coming due in the next 4 months or are considering a purchase.
PAYOFF your debt - keep liquidity a priority - I believe cash will be king in the next year - dont be one of those people' -big hat no cattle......
greygoose out

sens lose

Well tomorrow will be a national day of mourning in Ottawa and in Canada - as the Sens lost to The Anaheim Ducks in 5 games - final score 6-2 ducks.
isn' t it a full moon soon ?...oh well - bond rates have been rising again - chances are the lenders will increase the mortgage rates again closer to 6% - the magic number.
How long will this last ? - who knows - its still time to lock in and go along for the ride - while reducing your risk.
greygoose out - please pass the roast duck...is that a metallic taste ?????

rates move up - end of month - limit up...?

Once again lenders are increasing mortgage interest rates by as much as 30 bp to the 5.69% lever for 5 years. this was prompted by the hawkish talk of the bank of canada outlining they are likely to increase interest rates prior to the end of the year. The banks are jumping the gun to increase their spreads ...why ?....because they can !
time will tell if the bank of canada goes through with the increase - they are caught between a rock and a hard place - they have finally agreed there is inflation in the system, something we have all known - especially anyone who has a car, uses electricity, eats fresh vegetables, heats their home or pays property taxes. DUH>>>>> the bank is behind the 8 ball on this one.
The only tool they have is to control the bank rate - an increase will likely send the canadian dollar closer to parity with the US counterpart - which in turn will hurt our exporters - this could cause additional loss of jobs - and you cannot get those back in an instance - a credit crunch is coming - i am personally hoarding my cash - and reducing debt - i suggest you do the same......
gregyoose out - (where are the ice cubes and olives ?...my god have you seen the price of olives lately ????)

rates on the rise in mortgage land...but....

As predicted interest rates have moved up to 5.49% for the 5 year term - as government bond yields have risen - but will the bank of canada increase rates - I still dont think so...here is what the Globe and Mail has to say

David Dodge's conundrum
TAVIA GRANT
Friday, May 25, 2007
David Dodge has a dilemma on his hands.
On one hand, inflationary pressure has been hotter than the central bank had anticipated, suggesting interest rates should rise. On the other, the Canadian dollar's swift ascent is pummelling Canadian factories, and any rate increase could add fuel to that fire.
Mr. Dodge and other central bank officials will make their decision Tuesday at 9 a.m. EDT on their key overnight lending rate. The rate, at 4.25 per cent, hasn't budged in a year and is expected to remain unchanged next week.
“While the risks of rate hikes have definitely risen, we judge that Canadian dollar appreciation...and the prospects for continued slow U.S. growth will likely keep Dodge & Co. on the sidelines, at least through the summer,” said Michael Gregory, senior economist at the Bank of Montreal, in a report titled “What Will Dodge Do?”.
After that, traders are wagering rates will rise.
Inflation and economic data over the past few weeks have all come in stronger than expected. Core inflation is running at a four-year high and Mr. Dodge acknowledged Monday that inflation is “a little bit stronger” that the bank's projections.
“There are limits to how far the Bank will allow core inflation to stray, regardless of the state of the U.S. economy or the loonie's trajectory,” Mr. Gregory said.
Price pressure prompted economists at the C.D. Howe Institute yesterday to urge the Bank of Canada to raise interest rates — a rare occasion that the think tank differs from the actions the bank will likely take.
“Both headline and core inflation are running ahead of the bank's target, growth in the monetary aggregates suggests that inflation will continue to run above target, and the policy rate is low in real terms,” the C.D. Howe Institute's monetary council said in an agreed statement.
BMO, meantime, believes Mr. Dodge “is still prepared to bet on housing-led U.S. economic weakness ... and decelerating domestic house prices to rein in inflation pressures, with the loonie's rise to 30-year highs providing a previously unanticipated ... but welcome disinflationary bias.'
The bank did, however, change its forecast for a rate hike, saying it will likely take place late this year instead of early next year.
The Canadian dollar traded at 92.28 cents (U.S.) Friday and has climbed almost 8 per cent this year.
© The Globe and Mail

But dont forget another possibly scenario in the USA
The housing market showed stronger than expected new home sales in April - and the economy is moving at a pace exceeding 2% - I think this is based upon a war economy - if the war stops (which I am sure the US really doesnt want to see happen) the economy would be shown to slow dramatically - and the huge deficits being racked up should be bad for the US dollar and good for Gold - longer term

greygoose out

crazy hazy..lazy ???? - days of ......

well as predicted interest rates are on the rise - 5 year money is moving from 5.24% to 5.44%. yet the market is still hot in real estate and there appears to be a never ending supply of people looking to consolidate large credit card debts into their mortgages - it would appear consumer spending has not been savings and cash - but easy credit. We will shortly see the credit tighten as lenders realize that all the people they gave large limits to....surprisingly some dont pay back the money...life happens. Pay off your debt - consolidate - get ready to protect yourself against the downturn which will eventually come - its a matter of time..is Mr. Dodge - getting out of Dodge because he doesnt want to be around for the downturn ?...we will see

greygoose out

ahh the weekend....

the victoria day weekend is upon us - the bank of canada meets again at the end of May...what will happen ?... well the canadian dollar is at a 30 year high - which will likely keep the bank of canada on the sidelines even though core inflation is at a high of 2.5% - the high dollar could trigger as slowdown in our economy later in the year - and the US economy is still weak - also there is the eventual spectre of the Chinese stock market tanking after a 150% increase - this would cause a world wide drop in the stock market - like we saw in the early spring. Consumer confidence would be rocked and they would likely go into hiding - which would trigger a slow down - thus forcing the bank of canada to lower rates - in order to keep the economy moving.
time will tell - but for now I suspect the bank of canada will keep prime constant - but the banks will increase mortgage rates as the spreads over the govt bonds has narrowed dramatically. Next week expect rates to rise 20-25bp..
greygoose out...where is the vodka and olives ?

late breaking bulletin

as we move to the victoria day weekend in canada - i am wondering if the lenders will pull their traditional spring and summer long weekend trick - they usually bump interest rates over a long weekend to avoid the rush of consumers trying to lock in lower rates. It will be interesting to see if the rates rise over the weekend - with spreads narrowing - i am sure the longer term rates will move up...just not sure exactly when
lock in now if you have a mortgage coming due or plan to purchase in the next 120 days

greygoose out

roller coaster keeps moving

the bond rates are moving up - 5 year govt bonds at 5.29 +8 basis points / 10 year bond rates at 4.287 up 4.5 basis points and 1 year tbills at 4.36 up 4 basis points.
there is still very little spread -in the rates and with the canadian dollar over 91 cents - the question becomes will prime drop and long term rates move up ?
inflation is picking up in spite of what the government says.
the only caveat - is the stock market may take a hit which would take the steam out of investor and borrower confidence.....time will tell.
Off to the hospital with Joanne - to see if all is well with her ankle.
greygoose out

bond rates move up ...dollar moves up..dilema ???

The bond rates have been creepin upwards - currently government of Canada bond rates are 4.213 for 5 years and 4.24% for 6 months - we have a virtually flat curve - with a little upward bias in the 1 year term. With mortgage rates around 5.14-5.25 this is a very tight margin when compared to the bonds. Normally you would think rates will move up.
but the canadian dollar is at 91 cents - and moving towards parity...therefore the bank of canada is not likely to increase rates - I suspect we will see short term rates drop and long term rates increase - thus moving the market back to a normal bias...time will tell...lets wait and see
greygoose out.
p.s. thanks to everyone who called about joannes ankle - she is resting on the couch -and if i dont have a heart attack...we will do just fine.

sunny day ...oh sunny sunny sunny days.....

this weekend has been fabulous - except for Friday night when my wife Joanne - tripped on the way to get the mail and broke her ankle. the next 4-6 weeks will be a challenge. And then on Saturday i was on 'experts on call' on CFRA radio. Rates are good the weather is good - now is the time to refinance or buy a new home..

watching the players championship - we will see if Phil Mickelson can hold it together.....

greygoose out

goodbye dear Jim...

I haven't posted for awhile - as i have been mourning the sickness and recent passing on Thursday of Jim O'Connell. Jim worked at CTV in Ottawa and most recently was the anchor for ROBTV (now Business News Network) for a show Marketcall with Jim O'Connell.
We enjoyed a few dinners together when i was in Toronto with another dear friend who was a very good friend of Jim's. We laughed, Joked and traded thoughts - he was a true gentleman.
Our last dinner in October of 2006 - He announced he was getting married to the love of his life - Lisa - whom I had met the year before. Life seemed great - then on Feb 14 (valentines day of all days.....) he received the diagnosis of colon cancer. He immediatley went for surgery - but alas it had spread too quickly. We lost Jim on Thursday.. I have been torn with thoughts - why do cranky, miserable people seemingly live forever, while the true gentle people are taken too soon ? Jim - you made an impression on me and I looked forward to many more dinners and the possibility of getting you to golf and also talk to my Kiwanis Club next year...alas it will not happen - REST WELL MY FRIEND - you will be remembered.

greygoose out.

rainy days and sundays always get me down

welcome to eastern canada in the spring - dark dreary rainy...with the hope of sunshine and flowers to follow. Off topic I was amazed to see researchers mentioning - they now believe low levels of vitamin d (sunshine) may be a main cause of the high levels of cancer in the northern hemisphere. I have recently had a dear friend diagnosed with cancer and you always wonder how everything will end up....it sort of puts a perspective on life...nobody gets out alive.
But in living we must realize - time is precious and we must enjoy our lives as best we can.
I am a conservative mortgage person by nature - and a risk taker in the stock market.
having played the market for over 35 years - i have made and lost fortunes - all because i believe it to be a game - my wife often says why dont you cash out...i reply - because its not my money - i am playing with other people's losses and at times they are playing with mine - i get a charge out of seeing the portfolio increase in value - i set goals each year and then try to reach them -always keeping in mind if the value drops below a certain level -i will take some off the table.- I realize i am a very small fish in a large oceans and the professional traders can wipe you out in an instant.- The same holds true for mortgages - lenders can provide ridiculously low rates at times to steal a deal and this is the state of market at this point in time. Some major institutions are playing 'silly bugger' by telling clients to get the file approved and then contact them. They then dont have to do the work and merely undercut the interest rate to steal the approval..this too will pass - but it is frustrating and we usually see this before the market slows......so if you are on a variable rate product keep your eyes open it may be approaching time to consider locking in......donot take the same risks with a mortgage as i would with the stock market - remember it is usually secured against your source of shelter.
Food for thought make sure you analyze and determine - how much risk are you prepared to consider on your decisions......interest rates go up and down - but if you can live with the mortgage payment - then set it and concentrate on paying it off as soon as possible. The interest rate you earn is the equivalent of a tax free investment - so if you are paying 5% it is likely the same as earning 6.5% interest and then paying tax to the government - in today's day and age - its not always easy to earn that return risk free......
greygoose out.

bank of canada - holds rates constant

as suspected the bank held rates steady - but suspicion remains they will move up in the future - time will tell -but as suspected it was much ado about nothing..at least for now.
Lets keep our eyes on the government bonds and see if the yields ease up - or if the dollare backs off a bit....time will tell what happens - the world will unfold as it should.
I still believe gold will move up with oil and other commodities and the US markets will drop - the question is how the canadian economy will react....time will tell

Mortgage update - april 23rd

Welcome to Monday
the sun is up - its 22 degrees celsius (72 fahrenheit) and all is well with the world.
The new bank act took effect and now a conventional mortgage is 80% instead of 75%
therefore you only have to put down 20% as equity in a home to avoid the dreaded cmhc or genworth mortgage insurance.
This should help people looking to consolidate debts and will no doubt help some people to get int to the mortgage market.
tomorrow we will see if I am correct on the Bank of Canada - I do not believe they will increase rates - they will likely increase their inflation outlook and become more hawkish to see if that can influence the market place and slow it down a little....

bank of canada - rate move ?

I believe we will see some response from the bank of canada this week - as they meet - i think on the 24th. Will they move prime up ? - tough to say - there are a lot of signs which would allow them to move up - but the canadian dollar is approaching 90 cents and I am sure they dont want to see if skyrocket.
Mortgage rates have moved up as spreads have declined - i am betting they will leave rates as is..but provide a hawkish outlook for the future..
what will happen in the future - i have this impending feeling of ultimate doom -the stock market will eventually tank after everyone climbs on board and a liquidity crunch will ensue...lets hope i am wrong
greygoose out

back in ottawa - at last

having returned - i have briefly looked at the mortgage scenario. Rates have moved up or are in the process of moving from 5.09 to 5.29% and the perception is the bank of canada will increase the bank rate and therefore the prime.....but i am not so sure - the canadian dollar has moved up and this will cause the bank to question whether they want to move up the bank rate which would in turn increase the canadian dollar even further.

I dont think they will increase the rate.....on april 24th - but its a guessing game - lets see what happens.

returning from the masters

as i return from the masters - i have received notification the bond market has sold off and rates for government bonds have jumped approx 8-10bp. This likely means there is a high possibility the bank of canada will raise its rate when it meets april 24th.
it will depend on their view of inflation risk
we saw the job creation numbers come out stronger than expected and this has caused some people to believe rates will move up.
time will tell.

canadian economy still moving

i belive the economy will be shown to be growing at a reasonable rate overall. the Quebec election will allow the canadian dollar to strengthen promoting the possibility of stable or lower rates - while inflation if it continues will prompt higher rates - therefore the 2 forces should result in relatively stable rates. - time will tell....keep your eyes on the government bond market.
Securitization and market backed securities have helped to keep interest rates low - due to the provision of a large pool of mortgage funds - assuming no major surprises in the economy this should continue.

turbulence to continue

the provincial government of ontario - came out with their budget last week - no major surprises.
this week the election will be held in quebec - all signs point to a minority government which will possibly cause some upheaval in the canadian dollar.
time will tell - interest rates will hold steady - but the bond rates may move up a bit.
No major panic - just a wait and see position

so little from so much

well the new budget has come out - not much to report for the average canadian investor. the capital gains tax wasnt mentioned - very little in the way of tax reductions - the majority of the funding went to the provinces especially quebec - in order to appease them in the event of an election - very political budget.
Then comes the inflation report -as outlined previously we have more inflation than meets the eye - but last month the major increase was housing and fuel - this was due to a blip in the bond market - possibly to slow the mortgages during rrsp season..?.....and the gas shortage due to a strike and refinery fire -combined with colder weather...now the panic begins with speculation of the bank of canada possibly raising rates.
One report does not make a trend - i believe we will see inflatin settle down a bit and the boc will likely keep rates constant -
greygoose out

budget - fed - inflation - subprime......

The next week should be extremely interesting - we have seen the recent volatility on wall stree and the world markets - triggered by overseas -china / subprime mortgages in the US.
This week the fed will finish 2 days of meetings and the stock market will react depending upon what the Fed Chair says. We will also see a Canadian federal budget and the possibility of a spring election. This combined with the potential of inflation in the US and yet the need to reduce rates in order to keep the economy from recesssion - The markets are in a real
conundrum...time will tell what happens - but I am betting the US will ensure they are vigilant for inflation and will try to keep rates constant -
Canada does not have the same housing market but i still think we have more inflation than meets the eye - the economy will show itself to be slowing and we will see lower rates over the next year......time will tell - keep your eyes and ears to the ground - payoff your debts and keep some cash for emergencies
greygoose out....

Thursday morning -

Its thursday morning - rates have softened and the 5 year mortgage rate is now 4.99-5.04%
the bonds are holding steady with the 5 year canada bond at 3.895%
10 year bonds are at 3.992
there is very little spread in rates - the yield curve is virtually flat.
time will tell - what will happen but a major increase does not appear at this point.
keep your eyes on the blog
greygoose out

friday afternoon .....rant

its almost 4pm - the world is unfolding as it should...if only I had a greygoose on ice with 4 olives...oh well perhaps later. Interest rates are softening as suspected - the current 5 year mortgage rate ranges from 5.05% to 5.09% - with the odd renegade lender offering 4.95-4.99% if the covenant is super strong - The bond market stablilized today and we saw a bounce which should serve to hold the rates steady next week. Will the rates drop below 5% for the fixed 5 year term ?....only the shadow knows.
have a great weekend - get plenty of rest - dont worry about interest rates - the world will still be here on Monday

greygoose - out

roller coaster ride

The stock markets are up and down - but the interest rates are softening as expected. Canadian mortgage lenders are dropping the interest rates on 5 year money back to 5.09% from previous highs of 5.24% as expected. Will the rates continue to fall ? Time will tell - there is still room for further cuts - it will be interesting to see if a lender tries to bring the 5 year rate below %5 which would be a psychological boost to the market place...the spring market will tell - stay tuned
greygoose ....out

deep freeze coming back

well the cold weather hasnt' disappeared yet - it looks like another cold snap on the way for this week - that along with a chill in the market brings to mind the saying - we live in interesting times. stay calm - do not panic - watch the interest rates for signs of a drop - if you have a mortgage coming due in the next 120 days (4 months) - call us at 613-563-5083 or 613-563-5080 - we can protect a rate and if the rates drop you will get the lower rates - its a win win proposition....stay warm and calm....now back to my greygoose....

march 4th - awaiting the new week

last week we saw the 5 year government bonds drop below 4% - and RRSP season is over - we also saw the stock market correct which could lead to stronger bond yields - but I dont think so..I still believe rates will drop back to the 5% range for 5 year terms.
but dont forget - the government and lenders have come out with 40 year amortizations, 100% financing at discounted interest rates - we are seeing the market slow and prices are stable but not rising - therefore we could be headed towards a US recession or dramatic slowdown which will spill over to Canada.
If you are on a floating interest rate - keep your eyes on the bank of canada announcements and on the discounted fixed rates - if interest rates do not drop for prime by July 1- I would look at the fixed interest rates and consider locking in ....time will tell..

In Like a Lion - ...Out Like a Lamb ?

Welcome to March 1st - the final day of RRSP season in Canada -bond rates are still drifting down and the 5 year is now 3.917 while the 10 year is 4.006..this should translate into lower interest rates over the next few weeks. The rates will not fall until the RRSP season is over - as we all know the banks make more money on the investment side than on the mortgage side...and while the RRSP season is in full form - they dont want to concentrate on mortgages - so rates are kept higher to slow the flow. Time will tell if we are correct - but with the recent drop in the bond market - the rates should return to the 5.09% for 5 years from the current 5.24% level.....or even lower...the next move will be to spur the spring real estate market -then a slow down in the summer until the fall.....lets see what happens....
greygoose

China hiccups - North America gets the flu....

Well today we saw how the world markets can interact - globalization was in full form and effect. China's stock market dropped approx 10% overnight and the sympathetic tsunami came ashore on the north american markets this morning causing a watershed of 400 points in the DOW and over 300 points in the Canadian markets. Gold was down - the baby might be thrown out in the bath water - time will tell tomorrow and later this week.
but what does that have to do with our mortgage market....well there will be a flight to safety which means bond yields will be pushed higher on greater demand and rates will move up - thus the potential for lower interest rates in the short term may be hampered.. however....
The US economy is definitely slowing on the back of a declining housing market - if the stock market follows - the average american will encounter the reverse wealth effect - in otherwords they will feel poorer than they are feeling today - this would possibly move them into a defensive mode of protecting their money rather than spending - this would force the US to reduce interest rates in order to hopefully spur the economy - this drop in rates internally might work but they may be forced to increase external rates in order to keep their dollar from plummetting - a very tricky situation.
For now - keep an eye on the bond markets in Canada - this morning the 5 year bond dropped below 4% as did the 7 year government bond - this is down from the 4.10% level of approx a week ago - if this persists - rates should drop - especially after the RRSP season is finished on March 1st .......lets see what happens. (greygoose out...)

February 21st - can spring be far away....?

As outlined previously - the bond market is softening at this point and we are seeing interest rate pressures ease. Perhaps the interest rates will return to the 5% level in the next few weeks, after the completion of the RRSP season for Canada. The Federal Budget is scheduled for March 19th - so there may be a lull until the budget has come out... I still think the only major problem can be the housing market in the US slowing to the point of taking their economy down - which would spill over to Canada. Also of note the margin on stocks is at an all time high...which means people are borrowing to play the market - could mean a correction is on the way......beware....

interest rate fluctuations

On January 16th - I warned that rates may be ready to increase to the 5.25-75 range - and lo and behold - it has come to pass - interest rates for 5 year money is now 5.19-5.25%
the question now- what happens next - well let me gaze into the crystal ball again - the US Central Bankers - think there is a soft landing instore - which should lead to a higher stock market and perhaps higher interest rates - there are 2 weeks left until the end of the Canadian RRSP period for 2006 - if rates dont soften in early March - we may be on the march to higher rates - but remember - with current rates of 5% - it is unlikely interest rates could climb more than 1% as this would represent a 20% increase which would likely trigger a recession and force rates down....time will tell...stay tuned

rates move up - new products- and more....

The great white north is engulfed in an arctic high - vehicles creak and moan with the cold - and the bond market bounces around like a ping pong ball. The 5 year govt of canada bonds are currently yielding approx 4.115% - which is up from 4.04% on january 23rd...this has triggered an increase in 5 year mortgage rates to approx 5.30% from 5.09%.. how long will it last ?....that is the million dollar question..
but dont forget - we can lock in rates for 120 days into the future - so it is possible to protect the 5.09% until approx June 1st. For those purchasing or who have mortgages coming up for renewal between now and June 1st - this is the time for protective action.
Also new on the market - 75% lines of credit for rental properties at prime plus .25% (this is a great way to have flexible access to funds on a rental property...however the rate is currently 6.25% floating......)
100% financing at discounted rates
amortizations up to 40 years
stated income mortgages
refinances up to 95% and even second mortgages up to 100% -
where will it all end ?

interest rates move up ...but for how long ?

with the temperature hovering at minus 17 celsius (minus 30 with the winchill) the only thing heating up around here - are the interest rates.
Canada bond yields have increased and driven the 5 year mortgage rate from 5.09 to 5.30% - the question remains for how long ?
Bank of Canada Governor Dodge - maintains the economy will continue to pick up pace.....unless - the US consumer decides to batten down the hatches and the US economy slows - but he figures its a remote possibility...hello ....are you paying attention - housing sales in the US are down - the market is rocky - gold is on the increase and the US dollar is weak -.....I think there is more of likelihood the rates will drop as the US economy slows - but time will tell.. For the conservative borrower its still a great time to lock in low rates - for the aggressive borrower - the floating rate with a bias towards a 6 month front end load is likely the best - call us for details 613-563-5083 / bill

Candian Inflation lower than expected

welcome to frosty tuesday - well canadian inflation figures have come in lower than expected - due to lower auto and clothing costs. I dont know about you but i dont buy a car everyday and after christmas i am not going to spend a fortune on a new wardrobe. So what I am saying is the government keeps saying inflation is low - but if we look in our pockets the money seems to disappear faster. Now is the time to consider the new 100% financing for up to 40 year amortization - if you know someone who is renting with good credit but they just cant save enough money for a downpayment - they should be calling us to see if we can get them into their own home...Kiss your landlord goodbye - become your own landlord - call bill or joanne 613-563-5080 / 613-563-5083
for a FREE CONSULTATION>...back to my greygoose on ice.....

US football sunday....

as i watch the end of the game between new orleans and chicago - it would appear chicago is headed for superbowl 41 in miami on february 4th.
this week coming up - we will see how the oil inventories have faired - as the cold snap across the US and Canada may deplete reserves - we have had a very mild winter to date which has allowed for a drop in oil prices from 65 per barrell to approx 52 - and as such cdn markets have dropped - if oil prices strengthen - there may not be a need to reduce interest rates - time will tell .....stay posted for more updates.

cold as ice....rates moving a bit..

its cold and windy with some minor snow squalls - david dodge the bank of canada governor announced yesterday - he was surprised by the slow down during the final quarter of 2006 (i dont know why - common sense would tell you the US was slowing and we would follow - as oil and gold softened). The bank of canada kept the rates steady and appear to be comfortable with rates as they are - they are projected growth to grow to appr 2.8% later in the year - likely due to strengthening oil and gas along with stronger gold prices - this could cause rates to ease a bit if they think it is growing too fast - I suspect any drop in rates will be seen in late 2007 or early 2008. Time will tell

on the radio sat jan 20th - cfra ottawa 3pm

hi everyone - i will be on the radio CFRA 580 AM on saturday jan 20th as part of the experts on call radio series.
discussing some of the following
-refinancing to consolidate debt and reduce monthly costs
-refinance for renovations - up to 95% financing at discounted rates
-amortizations up to 40 years
-up to 100% financing at fully discounted interest rates-
120 interest rate guarantees
fixed or floating interest rates - what should you choose now ?
mortgage renewals - dont settle for high than discounted rates - 120 day protection prior to maturity.

Canadian interest rates possibly on the move

Welcome to the middle of January - the eastern portion of Canada has endured the first major winter storm approx 15cm (6 inches) and the weather is currently minus 24celsius with the windchill (minus 11 fahrenheit).
The bank of canada has left the current bank rate constant this morning but mortgage rates are possibly on an upward swing - especially on the long end of the bond market rates.
the 10 year canada's have moved from 4.07 to 4.15 in the past week
and the 5 year has moved from 3.98 to 4.06
with current 5 year money at 5.09 and 10 year at 5.60 there is very little spread and the possibility exists for a move to 5.25 and 5.75% - but time will tell.
Inflation has scared some people - the government maintains it is low - but check your pockets it costs more for everything.....inflation is moving
stay tuned for further details
bill

mortgages in canada 2007

well the new year is upon us - the prevailing thoughts are for lower rates during the second quarter with rates dropping approximately .25-.50 per cent in the medium to long term...now is the time to sit with a variable rate mortgage with the option to lock in at any time to a discounted interest rate.