OTTAWA _ A pair of unexpectedly soft economic reports are creating fresh doubts about the timing of the Bank of Canada’s next interest rate hike.

For months, experts have been predicting Bank of Canada governor Stephen Poloz to raise his benchmark rate at next month’s meeting. But broadening economic unknowns _ mostly linked to trade concerns around U.S. President Donald Trump’s protectionist agenda _ have begun to lead some analysts to wonder if Poloz will stand pat on July 11.

And on Friday two reports from Statistics Canada added more uncertainty to the interest rate outlook.

One release by the agency found Canada’s annual inflation rose at a pace of 2.2 per cent in May for the second straight month. The number, however, was cooler than market expectations of 2.6 per cent.

In the second report, Statistics Canada found that retail sales contracted in April by 1.2 per cent for the reading’s first month-to-month decline since December.

“These reports kind of highlight an economy that has slowed pretty significantly from the last year or two,” Robert Kavcic, senior economist for BMO Capital Markets, said in an interview.

“Given a lot of the uncertainty out there, and a little bit of a softer tone to this data, I think expectations for a July rate hike have probably come down a little bit.”

Royce Mendes of CIBC Capital Markets wrote in a report that Friday’s “bad data” make it even more difficult for the Bank of Canada to hike rates in July. Mendes noted, however, that things could improve before Poloz’s July 11 meeting because more important numbers on gross domestic product and employment are still on the way.

Nathan Janzen, RBC senior economist, said the combination of Friday’s figures, somewhat slower economic growth and a deteriorating tone in trade discussions with the U.S. “aren’t all that encouraging” and will make the Bank of Canada’s rate decision closer than previously thought.

Ranko Berich, head analyst at Monex Canada and Monex Europe, said the central bank’s July rate decision is “now an unknown factor.”

The hunt for clues into Poloz’s thinking will continue next Wednesday when he gives a speech to the chamber of commerce in Victoria, B.C.

The May annual inflation number in Friday’s report followed the 2.2 per cent reading for April and 2.3 per cent for March.

The main contributors to inflation last month were led by gasoline prices. Compared to a year earlier, they climbed 22.9 per cent in May and helped drive overall energy prices for the month 11.6 per cent higher.

Inflation also received a lift because Canadians paid more last month for restaurants, airline tickets and mortgage interest costs.

Consumers, however, paid less in May for telephone services, natural gas and digital devices and computers.

The report also found the average of the Bank of Canada’s three measures of core inflation, which leave out more-volatile numbers like pump prices, slowed to 1.9 per cent last month.

The core readings, which are closely monitored by the central bank, averaged 2.03 per cent in April, which was the strongest pace in six years.

On retail trade, the April contraction of 1.2 per cent pulled total sales down to $49.5 billion.

The April decrease was mostly due to a 4.3 per cent decline in sales by motor vehicle and parts dealers _ with new car dealerships reporting a 5.1 per cent drop and used car lots seeing a contraction of 4.1 per cent.

Statistics Canada said April’s unusually cool temperatures and bad weather in many parts of the country may have been to blame for the overall decline.

The decrease was concentrated in the largest provinces. Sales fell 2.3 per cent in Ontario, while Quebec saw a 2.7 per cent drop.

Statistics Canada, however, did release an upward revision to its retail sales data for March. The updated reading shows a 0.8 per cent increase, compared to its preliminary 0.6 per cent estimate.

Friday’s reports will help feed the Bank of Canada’s deliberations as its governing council considers its next interest rate decision.

For inflation, the bank can use interest rate hikes as a tool to help prevent it from climbing too high. The Bank of Canada tries to keep inflation from moving outside a range of between one and three per cent.

Recent inflation readings _ including Friday’s _ have been hovering just above the two per cent mid-point of the bank’s target range.

It’s unlikely, however, to have a significant impact on upcoming rate decisions because governor Poloz has predicted inflation to stay above two per cent for all of 2018. He’s predicted inflation to average 2.3 per cent this year before settling back down to 2.1 per cent in 2019 _ in large part due to the temporary effects of higher gas prices and the introduction of minimum wage increases in some provinces.

He’s raised the trend-setting interest rate three times since last July, but he hasn’t touched the rate since January. It’s been at 1.25 per cent ever since.

Michael Distefano
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by Andy Blatchford
June 22nd 2018
The Canadian Press

Did you know you may be eligible for a forgivable down payment loan for your next home purchase! Give us a call 905-357-5366 to see if you qualify

The purpose of the Home ownership Program is to:

Make home ownership a reality for low to moderate income households in Niagara
Ease the demand for rental housing by assisting renter households to buy affordable houses
Offer down payment assistance for homebuyers through a 5% forgivable loan to a maximum of $19,537
Encourage developers to build affordable housing
Eligible Buyers
To be eligible for a down payment loan a buyer must:

Be a Canadian Citizen, Landed Immigrant or have Refugee Claimant Status with no outstanding removal order
Be 18 years of age or older
Not own or have an interest in other residential properties or owe arrears to a government assisted affordable housing provider or Niagara Regional Housing (NRH)
Currently be renting and looking to buy a sole and principle residence in Niagara
Have a gross household income below $80,300 and assets below $30,000
Be eligible to obtain a mortgage
Provide documents to prove eligibility
Agree to register loan on title for 20 years
Eligible Homes
New homes (home inspection encouraged)
Resale homes (home inspection required at buyer’s cost)
Purchase price cannot exceed $390,755
May be detached, semi- detached, townhome, duplex or condo
Must be modest in size and features
Cannot be a home in which the buyer or any member of the buyer’s family has an ownership interest
Homeowner Assistance
Homeowners will receive 5% of the cost of an eligible home (maximum $19,537) at the time of purchase closing
No interest will be charged on the loan

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If you are looking for a new home, be sure you are pre-approved. With a mortgage pre-approval, a licensed mortgage professional can do a more complete verification prior to sending you shopping for a home, and with that done, the dollar figure you are going shopping with is actually what you can spend.

The mortgage professional that you work with to get pre-approved will let you know for certain what you can afford based on lender and insurer criteria, and what your payments on a specific mortgage will be.

Dominion Lending Centres mortgage professionals can lock-in an interest rate for you for anywhere from 60 – 120 days while you shop for your perfect home. By locking in an interest rate, you are guaranteed to get a mortgage for at least that rate or better. If interest rates drop, your locked-in rate will drop as well. However, if the interest rates go up, your locked-in interest rate will not, ensuring you get the best rate throughout the mortgage pre-approval process.

In order to get pre-approved for a mortgage, a mortgage professional requires a short list of information that will allow them to determine your buying power. A mortgage professional will explain to you the benefits of shorter or longer mortgage terms, the latest programs available, which mortgage products they believe will most likely meet your needs the best, plus they will review all of the other costs involved with purchasing a home.

Getting pre-approved for a mortgage is something every potential home buyer should do before going shopping for a new home. A pre-approval will give you the confidence of knowing that financing is available, and it can put you in a very positive negotiation position against other home buyers who aren’t pre-approved.

Michael Distefano
Mortgage Agent and Manager of operations
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Niagara largest Mortgage Broker
106- 5017 Victoria Ave Niagara Falls L2E4C9
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A report by Canada Mortgage and Housing Corp. says a recent drop in Ontario home prices isn’t expected to persist.

It says moderate economic growth in the Greater Toronto Area and Ontario generally will provide support for provincial real estate prices in 2018 and 2019.

CMHC expects inflation-adjusted home prices in the province will remain relatively stable and close to the levels of last year’s fourth quarter.

It anticipates prospective buyers will face fewer bidding wars and feel less urgency to act, allowing them time for more informed decision making.

On the flip side, CMHC says home owners may see their properties on the market longer than usual.

Michael Distefano
Mortgage Agent and Manager of operations
DLC BTB Mortgage Solutions FSCO 12039
Niagara largest Mortgage Broker
106- 5017 Victoria Ave Niagara Falls L2E4C9
T 905 357 5366 F 905 357 6654 C 905 246 5363
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The Canadian Press

Late last week, the Canadian Real Estate Association and real estate information portal Local Logic have announced a new partnership which will see the latter provide property-specific neighborhood data for over 300,000 advertised listings.

Local Logic will buttress Canada’s largest real-estate website, REALTOR.ca, with crucial information such as proximity to transportation hubs and vital services, along with CREA’s precise data on neighborhood discovery and noise levels, nearby facilities like shops and schools, and many others.

“We are very excited to be collaborating with one of the top brands in real estate,” Local Logic CEO Vincent-Charles Hodder stated. “This partnership is further evidence that the real estate industry in Canada acknowledges the importance of neighborhood and lifestyle data for home buyers.”

“Through a pilot on REALTOR.ca, we saw a significant increase in the number of consumers who connected with REALTORS® from listings with this hyper-localized neighbourhood information so it’s clearly influential in the home buying journey,” CREA Interim Vice-President of Marketing and IT Patrick Pichette said.

Read more: Canadian financial management platform, fintech venture join forces

Michael Distefano
Mortgage Agent and Manager of operations
Dominion Lending Centres  BTB Mortgage Solutions
Niagara largest Mortgage Broker
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T 905 357 5366 F 905 357 6654 C 905 246 5363 FSCO 12039

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Cadillac Fairview and the Investment Management Corporation of Ontario will build a 46-storey office tower in Toronto that will become the new home of the Ontario Teachers’ Pension Plan.

The commercial real estate company hopes to secure additional tenants before the $800-million building opens in the fall of 2022.

The building will be situated on the northeast corner of Front Street and Simcoe Street in downtown Toronto.

It will include 1.2 million square feet of office space, 12,290 square feet of retail and 339 parking stalls.

It is part of flurry of recent investments from Cadillac Fairview, including $1.5 billion in office projects and $25 million for the redevelopment of a former Sears location at CF Champlain mall in Moncton.

Since 2000, Cadillac Fairview has been wholly owned by the pension plan, which currently has a head office in North York.

Michael Distefano
Mortgage Agent and Manager of operations
DLC BTB Mortgage Solutions FSCO 12039
Niagara largest Mortgage Broker
106- 5017 Victoria Ave Niagara Falls L2E4C9
T 905 357 5366 F 905 357 6654 C 905 246 5363
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Story Credit: The Canadian Press

Before you buy a home there are a couple things you need to figure out first. One of the very first decisions you need to make is whether you want to work with a mortgage broker who is independent from the bank, or if you prefer, work with a financial representative from a specific bank. Next, you want to find a realtor that best understands your needs and wants.

From there, you and your realtor go through the laundry list of pros and cons as they relate to; type of neighborhood, type of building whether detached or attached, one, two, or three bedrooms, strata operated, resale potential, upgrades needed, local amenities, previous owners, the list goes on. Once you get an idea of the homes that tick the most boxes possible, writing an offer to purchase comes quick.

But what about your mortgage?

Unlike the list of requirements when it comes to someone’s potential home, a lot of people are only concerned about what the interest rate is when looking at their potential mortgage. If your price range was $500,000 for a 2 bedroom and you found one for $480,000, would you write an offer to buy without looking at those other requirements such as neighborhood, resale potential, upgrades needed, inspections, and previous owners?

There is a lot more that goes into a mortgage and understanding what differentiate one mortgage from another is very important for future borrowers to understand. The following are the 5 key elements borrowers need to be aware of before they sign and commit themselves to a lender and their mortgage product:

Privileges
Virtually every mortgage with every lender has some sort of privilege attached to it. A lot of the time it relates to pre-payment privileges. This can be extremely important because it allows you to increase your monthly payments, make lump sum payments, and change the frequency of your payments- all helping to pay down the principle portion of your mortgage and shave years off of unwanted interest. Why this is important to look at is because some lenders may only offer 10% pre-payment capabilities, while other’s 15%, and some 20%. With a $1,800 monthly payment that’s the difference between $180 against principle or $360. With an outstanding balance of $300,000 that’s the difference between a $30,000 lump sum payment against your principle or $60,000- a massive chunk that will take years and thousands of dollars more off your mortgage. Some lenders even offer the ability to skip a payment and double up on a payment.

Penalties
Nobody wants to pay a penalty for breaking their mortgage early (something 2/3 of people do in a 5-year fixed after the 2 year mark). That is why it is crucial for you to understand what your penalty will be IF you had to pay one. Some lenders use an IRD (Interest Rate Differential) penalty that takes into consideration term, outstanding balance, current rates, previous rates, and blends it all together into a formula. Other’s use three month’s interest and as you can probably guess, the IRD penalty is the more expensive one 99% of the time. IRD is usually applied to fixed term mortgages, variable rates more with three-month’s interest penalty. Big banks will almost always have a higher IRD penalty than monoline lenders because their formula accounts for posted rates, something usually much lower and offsetting with a monoline. A $12,000 IRD penalty with a big bank can be only $4,000 with a monoline for the same sized mortgage.

Interest Rate
The lower the rate, the lower than payment (assuming same amortization). What it really comes down to is picking the right term and choosing between fixed or variable, something a mortgage broker can be very helpful in explaining as it relates to your specific situation.

Portable Mortgage
This relates to a borrower’s ability to move their mortgage from one property, to another, even across provincial boarders. Some lenders like those big banks across Canada allow for this while it is harder when it comes to credit unions. If your job requires relocating and constant moving or travelling, this can be a very important factor.

Assumable Mortgage
Similar to portability, an assumable mortgage allows the person buying your home to take it over. This can result in avoiding pre-payment penalties or avoiding increased costs if downsizing. Not a feature commonly used but extremely beneficial when it is available, and you need it.

Connect with a Dominion Lending Centres BTB mortgage professional today to see which of these 5 topics most affects you and what lender offers the best solutions ! Visit our website www.betterthanbankmortgage.com or contact us here   http://betterthanbankmortgage.com/about/contact/ . 

Take our 30 sec quiz    https://qualify.renewamortgage.ca/

STEP 1 – QUIZ

We’ll get to know you with our interactive tool to determine what type of loan and amount you qualify for. The initial process only takes 60 seconds!

Lightning Fast Service

Lightning Fast Service

STEP 2 – SOLUTION

Once we’ve determined how much you qualify for, we’ll discuss what program best fits your situation.

Our service is complimentary and is available to help you secure the best possible rates and payment options.

Quick Closing Process

STEP 3 – CLOSING

When you’re satisfied with the proposed plan, we’ll finalize your loan and help you get access to your much needed home or equity.

You may have heard that rates are changing, and that is true. They don’t call it war for nothing and you need an expert by your side!

Think of mortgage brokers as your loyal soldiers. What we are seeing is exactly what we anticipated when prime rate goes up and discounts go down. Confused? Don’t be, variable rates are based on prime and both Bank of Canada Prime and Bank Prime are different.

What the new discount means is what it means – they anticipate prime to go up higher.

With current regulations, borrowers qualify for more mortgages on a variable rates! This is a shift from the previous policy where more Canadians were having to take fixed rates to qualify for the most.

These new discounts on new mortgages getting taken out there discount is lower off of the bank’s prime rate- this does not apply to an existing mortgage.

Did you notice earlier I said the bank’s prime rate, you would think they are all the same… right?

This is not the case. In November of 2016 one Canadian lender broke the trend of their counterparts and raised their internal prime to immediately impact their existing customers by adding to their amortization. This discount below was for new clients, they increased the discount so it looked bigger.

Example
Lender who broke the trend prime     Other lenders prime
3.65 %                                                             3.45%
Discount 1.05                                               Discounts ranging from 1.00-.95%

It’s important to note – each lender has unique criteria to be met to get these offers: some only for purchases, some only with switches, some only certain amortizations, and some only certain property types. The list goes on!

Remember your broker shops all these lenders without bias, while protecting your credit score to assist you in finding the best one. It’s important that we evaluate the following criteria with these lenders- here is an example of three lenders:

Lender one
• Bank has a higher Prime than anyone else
• No change to payment
• Increases amortization which can put into effect a trigger clause- cash call in on mortgage or forced pre-payment and other costs such as appraisal at your expense
• Not portable
• Does have a 12 month penalty payback if getting a larger mortgage at new rates! Best one!
• Have to go to branch to lock in and then be subject to their IRD (usually 3-5% of balance pending where you are in your term).
• Based on history this lender is generally the first to raise their rates and last to decrease

Lender two
• Prime rate consistent with all lenders
• Change to payment so amortization doesn’t increase
• NO trigger clause
• Have to go to branch to lock in and face large IRD between 3-5%
• Not portable but will refund you within 6 months if the mortgage is larger and will get rate available at that time

Lender three
• Prime consistent with all lenders
• Change to payment so amortization doesn’t increase
• NO trigger clause
• lender will pay back penalty within 3 months of getting a larger mortgage with them
• your mortgage expert can assist you with lock in
• If you lock in they have the lowest penalties in the country to break your mortgage in the future, generally 1-1.5% of the balance

With seven-in-10 mortgages breaking before the term is over, this should be weighted very carefully.

Let me demonstrate the following:

A mortgage that gets locked in with first or second lender above at $500,000, by the third year the cost to break a mortgage will be between $15,000 and $25,000. With the third lender the cost would be between $5,000 and $7,500.

What to do with this info?

These new wars apply to new mortgages. If you have a mortgage with a discount less than .50, a renewal upcoming, looking at accessing your equity for home renovations or to consolidate debt and you have a variable rate, it may be time to run the numbers to see if taking a new variable rate mortgage is beneficial for you. One of the significant benefits of having a VRM is to get out at any time with only three months interest penalty (unless a restrictive product was taken for a better rate or had a sale only clause).

As you can see we have only scratched the surface in terms of the differences. There are many other differences and mainly you have to consider as a consumer, do you want to be calling a bank branch and play Russian roulette with the education level and sales goals of the person who guides you through deciding what to do with your biggest asset? Or would you rather have a mortgage professional who is in the front lines proactively guiding you and assessing the economic factors to give you personalized advice based on their experience and knowledge of the mortgage industry.

Depends on what you value most!

Do you have questions on how we can help you? Call Michael Distefano Mortgage Agent and Manager of operations DLC BTB Mortgage Solutions FSCO 12039

T 905 357 5366 F 905 357 6654 C 905 246 5363

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Niagara largest Mortgage Broker 106- 5017 Victoria Ave Niagara Falls L2E4C9

It’s hard to look past what’s right in front of you. That can be said for a lot of things in life, including a mortgage.

So it should come as no surprise that roughly six-in-10 homeowners with the standard five-year fixed rate mortgage break their terms within three years. And as brokers, we’ve heard all of the reasons. Some are good and some are less fortunate. There are those who want to leverage recent large increased in property value for investment terms, or they want to get some equity out of their home to do some renovations. In other cases, it can be life events like divorce, new relationship, the kids going off to college, or just paying down some built up credit card or consumer debt. Some people are lucky enough to be in a position to pay off the mortgage early.

In fact, if you’re reading this and have had a mortgage long enough, one of the things listed above has probably come into your life. But they all come at a cost. So as you sit down to either renew or get a new mortgage, take some time to think about the future. Not five months ahead, but five, seven or even 10 years ahead.

If you’re really not sure what the future that far away is going to look like, you need to consider some options before you sign on the dotted line. It could save you money.

If you’re a fixed-rate person, it’s important to understand how your lender is going to calculate the penalty when you break the mortgage.

Big banks calculate penalties based on the discount they gave you off of their posted rates at the time you first got your mortgage. They take their new posted rate for the amount of time you have left in your mortgage (3-years, 4-years etc.), apply the same Discount they first gave you and then calculate how much interest they would lose as the difference between the two for the rest of the term calculated on your current balance. That is your penalty and it can be quite hefty.

But other lenders like credit unions will use the interest rate differential or three month interest penalty.

What can you do? You could sign on for a fixed-year rate for a shorter term, like three years. That just obviously shortens the length of the mortgage. Or you can also consider a variable rate since the penalties to break the term are much lower.

While it may be tempting to just stick with the big bank, you’ll want to talk to a mortgage broker first. Mortgage brokers have access to all kinds of lenders from credit unions to monolines (a monoline is considered a company specializing in a single type of financial service, like a mortgage) which can arrange better terms if you do need to cut your mortgage early.

We are Canada’s largest and fastest-growing mortgage brokerage! Our Mortgage Professionals are Experts in their field and many are ranked among the best nationally. We work for you, not the lenders, so your best interests will always be our number one priority We have more than 100 mortgage programs, making it easy to choose the best fit for your unique situation.  We can process your mortgage in as few as 7 days. We are the preferred mortgage lender for several of Canada’s top companies. Dominion Lending Centres’ Mortgage Professionals are available anytime, anywhere, evenings and weekends – and we’ll even come to you!

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DLC BTB Mortgage Solutions FSCO 12039
Niagara largest Mortgage Broker
106- 5017 Victoria Ave Niagara Falls L2E4C9
T 905 357 5366 F 905 357 6654 C 905 246 5363

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