Mike Vezina
291 Olmstead Street K1L7J9 Ottawa, ON, Canada

Stuck in the home-office! Filling free time usually taken by travelling to and from meetings via car during the week! Why are fixed interest rates rising and the +/- on a variable/adjustable has moved against us. But, we see headlines from central banks lowering rates? Brief explanation: The Bank of Canada has lowered the prime rate and our bank's have subsequently lowered their prime lending rate to 2.45%. ... Fixed Rate Mortgages are funded from the Bond Market NOT from prime lending rate. Investors are demanding more returns on mortgage bonds to offset the increased risk in the mortgage market. Investors are more concerned that more borrowers will be laid off and lenders will be facing high levels of default. Volatility, the bond market is moving up and down so quickly, lenders don’t know where rates are going. Liquidity concerns, investors were not buying Mortgage Bonds, so we have seen CMHC/government step up and purchase almost $200m in Mortgage bonds recently to dump liquidity into the mortgage market giving lenders more money to lend out. Look for more than $200M help in this market to come. PS. For people that chose variable/adjustable rate mortgages back in 2018 cudos to you because you are looking at P-1 or p-.75 contracts right now and the interest on your mortgage is 1.45 or 1.70 right now. I have always believed in the advantages of a variable rate mortgage over fixing your rate over a 5 year term.

Northlend Financial

Call 613.864.0332 or PM me to learn more about investing in mortgages