Mortgages Calculator
In Canada, we are seeing a very interesting trend in the mortgage market. On Friday, January 13, we witnessed record lows in interest rates as lenders are fiercely competing to get an edge. It started with the Bank of Montreal reducing their rates by half of a percentage point, and then Royal Bank, Toronto Dominion, Scotia Bank and Canadian Imperial bank of Commerce all followed suit.
With these record low rates, it becomes increasingly attractive to young people to become first time home buyers. Many analysts speculate that this may cause trouble in the housing market however. As the 2008 recession is still fresh in our collective memories, these experts implore people to proceed with caution. One of the problems that was at the root of the collapse in 2008 was the ridiculously low rates at which American banks were lending mortgages. These subprime mortgages proved to be unsustainable and the housing market collapsed as many families suddenly realized they could no longer afford their homes when the rates were no longer as attractive as they were when the first bought the home.
However, Canada has a good track record of keeping their banks in check and implementing measures to prevent such disasters. From my limited research into these new rates, it seems they are merely promotional and that there are many special conditions and stipulations included when getting a special low rate. One week after these rates were announce, some banks even increased some of their other banking fees, such as checking account charges and transaction fee increases. These changes are not necessarily related, or for the purposes of securing the profits, but they are interesting nonetheless.
Another interesting thing I have noticed is that it is very difficult to find these rates on some of the “Big 5” banks’ websites. As they are considered promotional, you would assume they would try to promote them as much as possible. For instance, I could not find a single mention of the low rate I had heard about on the news on the RBC website. I am not sure if it is simply that the site has not yet been updated or if it is an oversight, but I found it quite peculiar.
One site I did find that has been immensely helpful for me in the past is this mortgage calculator I discovered a few months ago. It is a great tool to compare rates among all the banks. It even calculates what your monthly payments would be with each of the posted rates. This tool is offered by an Ontario lender, which itself has great rates and can compete with the Big 5.
This tool also serves as a reminder that you must really do some research if you are in the process of financing a home purchase. Outside of the Big 5, there are great alternatives such as local credit unions or even private lenders. It is important to really consider all your options and choose what is best for you, your family, and your future as a home owner.
With these record low rates, it becomes increasingly attractive to young people to become first time home buyers. Many analysts speculate that this may cause trouble in the housing market however. As the 2008 recession is still fresh in our collective memories, these experts implore people to proceed with caution. One of the problems that was at the root of the collapse in 2008 was the ridiculously low rates at which American banks were lending mortgages. These subprime mortgages proved to be unsustainable and the housing market collapsed as many families suddenly realized they could no longer afford their homes when the rates were no longer as attractive as they were when the first bought the home.
However, Canada has a good track record of keeping their banks in check and implementing measures to prevent such disasters. From my limited research into these new rates, it seems they are merely promotional and that there are many special conditions and stipulations included when getting a special low rate. One week after these rates were announce, some banks even increased some of their other banking fees, such as checking account charges and transaction fee increases. These changes are not necessarily related, or for the purposes of securing the profits, but they are interesting nonetheless.
Another interesting thing I have noticed is that it is very difficult to find these rates on some of the “Big 5” banks’ websites. As they are considered promotional, you would assume they would try to promote them as much as possible. For instance, I could not find a single mention of the low rate I had heard about on the news on the RBC website. I am not sure if it is simply that the site has not yet been updated or if it is an oversight, but I found it quite peculiar.
One site I did find that has been immensely helpful for me in the past is this mortgage calculator I discovered a few months ago. It is a great tool to compare rates among all the banks. It even calculates what your monthly payments would be with each of the posted rates. This tool is offered by an Ontario lender, which itself has great rates and can compete with the Big 5.
This tool also serves as a reminder that you must really do some research if you are in the process of financing a home purchase. Outside of the Big 5, there are great alternatives such as local credit unions or even private lenders. It is important to really consider all your options and choose what is best for you, your family, and your future as a home owner.