Mortgages By Kirk

Variable rates are currently at all-time lows, and because of this more and more people are considering them as an option to finance their homes. In this video, I discuss the 5 things that you need to know about Variable rate mortgages. #1 - Variable rates are not a number they are a formula Variable rates are not an actual number but a formula applied to prime in the form of a premium or discount. For example, Prime - one means you need to subtract one from the prime rat...e to calculate the mortgage rate. As of April 29 2021, the current prime rate is 2.45% therefore, 2.45% - 1 = 1.45% #2 - Variable rates may change throughout the term of your mortgage The Bank of Canada meets Eight times a year to determine if they will make any changes to the overnight rate. The overnight rate typically directly affects the prime rate. If the bank decides to increase the prime rate by 0.25% from 2.49% to 2.70% the new prime rate will apply to the formula used to calculate your mortgage rate. #3 - Penalties are modest The penalties you are required to pay if you decide to exit your mortgage before the end of the term are three month's worth of interest. This is typically the cheapest penalty to leave a mortgage before the end of the term. #4 - You can switch to a fixed-rate at any time Throughout the term, if you decide that a variable rate mortgage does not suit your needs you can convert your mortgage into a fixed rate at any point with no fees or penalties. The fixed rate you would receive would be your lender's current rate on the day that you made the request to change your mortgage type. #5 - Historically variable-rate mortgages save money If you analyze variable rate mortgages over the last two decades in a majority of the cases variable rates were cheaper than fixed rates. Using this logic choosing a variable rate over a fixed rate seems like an easy decision however the truth is that no one really knows what the future of interest rates will be and if the historical trend will continue. If you have any questions regarding variable-rate mortgages or any mortgage-related questions please give me a shout. My door is always open and I love to talk about mortgages.

What would the value of your house be if your monthly rent payment was converted into a monthly mortgage payment? The prices listed below are based on purchasing with 20% as a down payment. Saving a down payment is one of the most challenging requirements when purchasing a home. It is important to plan for your down payment months even years before shopping. If you need help with down payment advice please reach out!

What would the value of your house be if your monthly rent payment was converted into a monthly mortgage payment? The prices listed below are based on purchasing with 20% as a down payment. Saving a down payment is one of the most challenging requirements when purchasing a home. It is important to plan for your down payment months even years before shopping. If you need help with down payment advice please reach out!

As expected the Bank of Canada announced this morning that it will be maintaining its overnight interest rate at 0.25%. This means that there will be no changes to the prime rate of 2.45% The bank altered the projected date for a rate increase from the first quarter in 2023 to the last quarter of 2022. They have scaled back the quantitative easing program from $4B to $3B per week based on a positive economic outlook as well as a stronger than expected Q1.... The bank has now publicly stated they are monitoring the real estate market as adjust policies when needed. What Does This Mean for Mortgages? Fixed-rate mortgages are currently still much lower than pre-pandemic levels however have increased 0.70% since February. Variable-rate mortgages and credit lines will not have payment changes as the prime rate remains at 2.45% Choosing between a fixed and a variable rate should be determined by your level of comfort with the risk of a rate increase combined with an understanding of penalties. Currently, there is minimal incentive to convert a variable into a fixed mortgage. IF YOUR VARIABLE RATE DISCOUNT IS 0.60 OR LESS NOW MAY BE THE TIME TO CONSIDER A REFINANCE TO A LOWER RATE! If you would like to discuss your specific situation and how today's rate announcement influences your mortgage please feel free to reach out! My door is always open!

As of right now, an increase to the benchmark rate on uninsured mortgages is only a proposal from OFSI. This is expected to be approved and take effect on June 1st. It is an attempt to cool the red-hot housing market. If you have any questions about this or anything else mortgage please do not hesitate to reach out.

With Mortgage rates on the rise does it make sense to refinance your current 5-year fixed mortgage in search of a lower rate? In this video, I discuss what IRD penalties are and help you decide if you should consider breaking your current mortgage to obtain a lower rate. 0:00:18 - What is the point of breaking your mortgage to refinance?... 0:00:29 - What factors you need to consider when breaking your mortgage 0:00:56 - What are IRD penalties? 0:01:10 - How are IRD penalties calculated? 0:01:29 - What happens to IRD penalties when rate changes? 0:01:51 - What you need to do to figure out if you can save by breaking your mortgage today. See more

With all the focus on the increase in fixed-rate mortgages, this past week In this video I discuss what will happen to your variable rate mortgage when the prime rate increases. On Jan 20th the Bank of Canada released the latest report in which they reiterated that they will most likely leave the prime rate unchanged through 2023. You can view my break down of that report here: https://www.mbyk.ca/post/boc-january-2021-rate-announcement Check back with me on March 10th for the latest report.

TRREB has released sales data for January 2021 with sales up 50% year over year. The average house price also rising 15.5% to $967,885. The board is also projecting that the average house in the GTA will hit $1,025,000 in 2021. In this video I review some mortgage information based on that data.

I in this video I discuss three methods you can use to determine the maximum mortgage amount you can get approved for from a lender. It is always best to speak with a mortgage professional to get the most accurate figure. To read my latest blog please click here https://www.mbyk.ca//three-hacks-to-determine-max-mortgage

When looking to purchase a property it is important to understand the requirements to secure a mortgage. There are many factors that go into qualifying for a mortgage however the most common question people ask me is: "How much money am I required to put down when purchasing?" The answer to this question is based on a sliding scale depending on the value of the property that is being purchased.... If you are purchasing a property for under $500,000 you can put as little as 5% down. If the property is selling for over $500,000 but under $1,000,000 the least amount you are required for a down payment is 5% on the first $500,000 and 10% for every dollar above $500,000. For example: Property for sale for $600,000 requires a minimum down payment of: 5% on the first $500,000 or $25,000 & 10% on the amount above $500,000 or $10,000 For a total of 5.83% or $35,000 For any property that you are purchasing over $1,000,000 the least amount you are required to use for a down payment is 20%. It is important to understand that if you are buying using less than 20% as a down payment you are required to get mortgage default insurance. The insurance premium will be added to the mortgage amount. To learn more about mortgage default insurance click here: https://www.mbyk.ca//you-re-telling-me-my-larger-down-paym If you have any questions about a down payment or any other part of the mortgage process please feel free to reach out! You can book a call directly into my calendar here: https://www.mbyk.ca/book-a-call I love to talk about mortgages!

How do these bank meetings affect me? The Bank of Canada meets eight times a year to set the Benchmark interest rate or overnight rate. This rate is used to determine interest rates Canadian's get on mortgages, credit lines, savings accounts and other products. If the bank wants to stimulate the economy they cut the rate. This encourages borrowing and investing. When they want to slow down the economy they increase the rate.... What happened today? In the weeks leading to today's announcement, some analysts were predicting that the bank may make a micro-cut to its overnight rate. To read more visit my blog: https://www.mbyk.ca/post/boc-january-2021-rate-announcement If you have any questions about today's Bank of Canada's announcement or anything else mortgages, remember that my door is always open and I love to talk mortgages! Book a call directly into my calendar here https://www.mbyk.ca/book-a-call

Mortgage rates double, what happens to my payment? Triggered last spring by the pandemic, economic uncertainty caused interest rates to dip to all-time lows. Many Canadian homeowners now have fixed-rate mortgages locked in, but what happens when rates start to rise or even double? When people think that mortgage rates have doubled they immediately think that payments have increased by 100%. This is not the case.... Check out my latest Blog here! https://www.mbyk.ca//what-happens-when-interest-rates-doub

Renting vs Owning - Things to think about before making a decision.

If you're thinking of homeownership, please take a few seconds to take the following quiz provided by Genworth Canada.