Gina Burgio, Mortgage Agent

It seems like yesterday when the Canadian Dollar was at par with the US Dollar. It took less than 2 years for the exchange rate to equalize again. But what does this mean for the Canadian economy?

Generally, the lower the value of the Canadian dollar, the more Canada was trading. When the dollar was at par in July 2008 it reflected a weakening economy in Canada. But is that still the case?  More than ever Canada's economy is strong in comparison to markets with which we are trading.

In terms of trade a strong dollar weakens Canada's selling points, but could a strong economy within Canada compensate for a loss in trade? We already have a booming real estate market and interest rates haven't been lower in years. Perhaps the way Canada will benefit is through an increase in foreign investment for future gains.

I suppose only time will tell.

What are your thoughts?

In response to the recent Financial Post article (link below), do you feel like the tighter mortgage rules will show a great deal more cheating?

I'm torn because I know that a 20% downpayment from an investor is difficult, though not "impossible" as this article states, to find for some investors. But I have to wonder if it is not exactly what we need to protect the market from people who really shouldn't be investing in some cases. Speaking from personal experience, it takes a good deal of credit and/or liquid assets to manage a property properly and not be hanging on by your fingertips.  After all, if the mortgage payment is reliant on rental income there has to be some kind of padding for carryover for at least a few months in a tenant-less or "worst case" scenario.  

What are your thoughts?

 Original Article:

Tighter mortgage rules may lead to more cheating 

By Andy Holloway, Financial Post

Mortgage fraud may not be the most serious crime in the grand scheme of things, but it's not something the government should be helping. But that's exactly what real estate professionals say is a likely result of the new mortgage rules being put into place on April 19.

 "There's going to be a dramatic increase in mortgage fraud again," says Don Campbell, president of the Real Estate Investing Network, a Calgary-based association of investors who collectively own more than $3 billion in property. "You watch this thing start to take off."

 The reason? It's virtually impossible for investors to buy a third rental property without putting 20% down because the new Canada Mortgage and Housing Corp. rules use a 50% add-back policy instead of an 80% offset for rental income. Essentially, that means investors get less mileage from the rent that is typically used to pay off the mortgage.

Read More:
http://www.montrealgazette.com/business/fp/Tighter+mortgage+rules+lead+more+cheating/2743481/story.html

 

 

We all expected to see this but I'm surprised to see it happening so soon. Undoubtedly rates will now only continue to rise.

GB

 

Banks bump up mortgage rates

Other banks expected to follow suit

www.cbc.ca

Mortgage rates have begun to rise from their record lows, with news Monday that several Canadian banks are increasing several fixed mortgage rates by up to 6/10ths of a percentage point.

The biggest jump is attached to the popular five-year fixed closed rate, which moves from 5.25 per cent to 5.85 per cent at Royal Bank, TD Canada Trust, and Laurentian Bank. That's the posted rate, which is routinely discounted by the big banks.

RBC's new discounted rate for the five-year term also rises 6/10ths of a percentage point to 4.59 per cent. TD's rises the same amount to 4.55 per cent. The discounted rate at Laurentian moves up to 4.54 per cent.

How much difference will that make? A $200,000 mortgage amortized over 25 years costs $1,051 a month at a rate of 3.99 per cent. At 4.59 per cent, that jumps $66 a month to $1,117.

The banks also raised their three-year and four-year fixed closed rates. The posted three-year rate at Royal Bank and Laurentian climbs one-fifth of a percentage point to 4.35 per cent, while the posted rate at TD jumps 4/10ths of a point to 4.70 per cent.

The posted four-year rate at all three banks jumps 4/10ths of a percentage point to 5.34 per cent.

Other banks are expected to follow suit. The new rates, effective Tuesday, represent the first hike in Canadian mortgage rates since last October. The posted five-year rate is now back to where it was for much of last summer.

New mortgage rules that go into effect next month require borrowers to qualify at the five-year rate, rather than the old three-year standard, even if they are applying for a variable rate mortgage.

Variable rates expected to rise soon

Variable mortgage rates, which rise in tandem with the Bank of Canada's key overnight lending rate, are not affected by Monday's announcement. But they are likely to be heading up soon too.

Bank of Canada governor Mark Carney warned last week that inflation was higher than expected. That had some market watchers forecasting that the central bank could move to raise its key lending rate as early as June. The possibility of an earlier rate hike sent bond yields up, and that appears to have prompted Monday's mortgage increase. Fixed mortgage rates tend to move higher when long-term bond yields rise.

The key rate has been at a rock-bottom 0.25 per cent since April 2009 to help the economy recover.

A report out Monday from CIBC World Markets said rising rates shouldn't be enough to derail the stock market rally - pointing out that the market is historically strong six months before and after rate increases.

A survey released last week by RBC found almost two-thirds of respondents expected the cost of servicing a mortgage to rise this year.

Read more: http://www.cbc.ca/money/story/2010/03/29/mortgage-rates-up.html#ixzz0jlqjf9St

 

By ALEX J. POLLOCK

Suppose we agree that we would like our society to have widespread home ownership and a property-owning citizenry. Does it take government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac with implied taxpayer guarantees, tax advantages for the interest paid on home mortgages, and government pressure for "creative" mortgage lending to achieve this?

The Canadian experience shows that it doesn't.

Canada makes a useful comparison for the U.S. Both countries are rich, advanced, stable, have sophisticated financial systems and pioneer histories, and stretch from Atlantic to Pacific. But Canada has no housing GSEs. Mortgage interest is not tax deductible. It does not have 30-year fixed rate, freely prepayable mortgage loans. Mortgage lending is more conservative and much more creditor-friendly.

Canadian mortgage lenders have full recourse to the mortgage borrower's other assets and income, in addition to having the house as collateral. This means there is little incentive for borrowers to "walk away" from their mortgage. The absence of a tax deduction for mortgage interest probably increases the incentive to pay down debt. Most Canadian mortgage payments are made through automatic debit of the borrower's checking account-a technical but important point. Canadian fixed-rate mortgages typically have prepayment penalties to protect the lender and the interest rate on the loan is fixed for only up to five years.

This relative creditor conservatism has meant that Canada and Canadian banks have so far come through the international financial crisis in much better shape than their U.S. counterparts. Canada didn't avoid the recession, but mortgage delinquencies have so far remained much lower than in the U.S., with the percentage of loans delinquent 90 days or more at approximately one-tenth of the U.S. level.

What about the home ownership rate-the percentage of all households owning their own home? Isn't there a home ownership price to pay for this Canadian credit conservatism? No.

Here's the home ownership rate in Canada: 68%. In the U.S. it's 67%. The U.S. rate peaked at the top of the housing bubble at 69%. In other words, two very different housing finance systems, one much riskier than the other, produced virtually the same home ownership rate.

This must cause us to call into question longstanding U.S. beliefs about the relationship of government-subsidized housing finance to home ownership.

The former savings-and-loan industry justified its special tax and regulatory privileges, including its right to pay more interest on deposits than commercial banks were then allowed to, by appealing to its role in home ownership. Then came the savings and loan collapse of the 1980s.

Fannie Mae and Freddie Mac took over the home ownership mantra. In the vast risk expansion of their arrogant days, with very high rates of profitability made possible by government-granted privileges, they justified these privileges by appealing to home ownership. It was often said by their supporters that the GSE-dominated U.S. housing finance system generated the highest home ownership rates in the world, which was false, and that this system was the "envy of the world," which was also false. Fannie Mae's annual reports regularly featured a house with an American flag flying.

Now it is clear to everyone that Fannie and Freddie, having done so much to help inflate the bubble and having been dragged into insolvency by its deflation, are wards of the government. The taxpayer bailout of these GSEs is likely to cost much more than the bailout of the saving and loans did a generation ago. The U.S. Treasury has unilaterally signed the taxpayers up for unlimited support of these bankrupt purveyors of government-advantaged mortgage finance.

So the widespread previous beliefs about the desirability of having GSEs were wildly mistaken. It ought to be clear by now that an entity can be a private company with market discipline, or it can be a government body with governmental discipline, but it can't be both.

In this context, it is important to recognize that Canada does have a government body to promote housing finance: the Canada Mortgage and Housing Corporation, which is the dominant credit insurer of mortgages in the country. Whether or not you like the idea of such a government financing operation, at least its status is perfectly clear and honest. The Canadian government owns 100% of its stock. Its guaranty from the government is explicit. It provides housing subsidies which are on budget and must be appropriated.

Let's remember that the original sin of making Fannie a GSE in 1968 was to get it off the federal budget so the deficit looked smaller. Canada in this respect looks superior to the U.S. in candor as well as credit performance.

Mr. Pollock is a resident fellow at the American Enterprise Institute in Washington, D.C. He was president and CEO of the Federal Home Loan Bank of Chicago from 1991 to 2004

 

Frank and Susan Williams bought a house near Hamilton, Ont., this month, they followed a time-honoured tradition of using leveraged financing.

With mortgage insurance they only had to put down 5% of the $270,000 purchase price. They went with a closed variable rate at 2.25% and amortized the loan over 35 years. The deal was initiated with a mortgage broker, with Bank of Nova Scotia providing the financing.

"It's a three-bedroom bungalow. That was attractive to us. We have a dog and we like to do things in the backyard. We did not have the type of money we thought we'd have to put into a house. We said let's just bite the bullet and get this over with," Ms. Williams says.

And getting it over with was probably a good idea. First, they were in a rent-to-own arrangement and had to exercise their option to buy before August 2010. And second, based on pending federal rules for government-backed insured mortgages that come into effect on April 19, the Williams (not their real name) would probably not have qualified for the variable-rate mortgage. In fact, as recent arrivals from the United States and its housing crisis, their credit history might not have passed any stress test.

"We really came from the United States with nothing. Everything we had disappeared with the housing crisis. In areas that had bad loans all the houses just hit bottom. We were expecting US$250,000 out of our house but we got nothing," Ms. Williams says. They walked away from the whole mess.

But while the Williams might have had good reasons for leveraging to get their dream home -- they are firsttime buyers in Canada -- the new federal rules governing mortgages have been widely misunderstood. In fact, the biggest fear among the young and house-less is fear itself.

"There are a lot of rules that changed. But they weren't communicated very well," says Robert McLister, the editor of Vancouver-based Canadian Mortgage Trends (www.CanadianMortgageTrends.com).

Margo Wynhofen, of Grimsby, Ont.-based Verico One Mortgage Corp. ( www.mymortgageadvisor.ca) and vice-president of the Independent Mortgage Brokers Association of Ontario, says she has had to spend considerable time explaining federal Finance Minister Jim Flaherty's statement of Feb. 16.

"I had a lot of people misunderstand the announcement. So I had a lot of clients call me for clarification. There was an overwhelming sigh of relief," Ms. Wynhofen says.

Under current mortgage-lending rules, buyers with a down payment of less than 20% of the purchase price must purchase mortgage insurance, with the most common source being Canadian Housing and Mortgage Corp. The new rules affect only customers that are required to purchase the insurance.

Under the new rules, all buyers requiring mortgage insurance will have to meet the "ability to pay" for a higher, more expensive five-year fixed-rate mortgage even if they choose a mortgage with a lower interest rate and a shorter term.

"It's not just first-time homebuyers who are affected. It's anyone who wants a variable mortgage rate now who doesn't have one already, they now have to qualify at a higher interest rate. Some of them won't qualify. And that's fine so they'll just take a fixed rate. It's not the end of the world," Ms. Wynhofen says.

Bernice Dunsby, director of home equity financing at the Royal Bank, says the new rules might even help save first-time buyers from themselves.

"We believe the new measures will have a small impact on mortgage growth, if any. First-time buyers should not be any more concerned about these changes. In fact, I believe the changes will actually help first-time homebuyers to ensure that not only can they afford their home today but in the future, especially if interest rates rise," says Ms. Dunsby.

In some cases, the rules might be outdated before they are fully implemented. A growing number of homebuyers are forgoing the conventional mortgage and using alternative financial products. Take the case of London, Ont., accountant and recent homebuyer Phil Parkinson. Three years ago, he bought his first home with a fully secured line of credit offered through Manulife Financial Corp.

The Manulife One product provides up to 80% of the appraised value of your home. It can be used to pay off the balance of your existing mortgage, personal lines of credit and any other outstanding debts you might have.

"These operate on a variable rate. It's just like one big bank account. You can have your money deposited into the account, you can pay your bills. [As you deposit] you can knock your account down and lower your interest calculation. Theoretically, you don't have to pay anything expect the interest," Mr. Parkinson says.

Other highlights of the rules don't directly affect firsttime buyers. For example, the maximum amount Canadians can withdraw in refinancing their mortgages has dropped to 90% from 95% of the value of their homes. rule has created a mini-stampede.

"There is a bit of urgency now to get [a refinancing] done before April 19. People are chronically refinancing. I have clients that refinance every two to three years to take the equity out of their home to pay off credit-card debt. The home has become an ATM machine," Ms. Wynhofen says.

A January 2007 Statistics Canada study of personal debt concluded that "increasing mortgage debt for refinancing purposes or taking out home-equity loans implies that homeowners in both [Canada and the United States] are using their homes as a source of cash to finance their spending rather than as an investment."

And in an effort to contain the risks of real-estate speculation, as of April 19 the minimum down payment for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation rises from 5% to 20%.

As for ex-patriot Americans Frank and Susan Williams, they're pretty relieved about their fresh start with a new house.

"It's very different to get a mortgage here. It's a lot less hassle than in the United States," Ms. Williams says.

And because the Williams are not particularly worried about the new mortgage rules, they are already thinking about their next purchase.

"We might be able to buy a little place that's larger when we can leverage this up a bit -- maybe get something cheaper than this with more room,' Ms. Williams says.

© Copyright (c) National Post

TORONTO -- The Canadian dollar rose to its highest level since July 2008 on Tuesday after the U.S. Federal Reserve held benchmark interest rates near zero, as expected, and renewed its promise to keep them exceptionally low for an extended period.

Building on momentum from firmer oil and equities prices and stronger-than-expected domestic economic data, the Canadian dollar rose as high as $1.0135 to the U.S. dollar, or 98.67 U.S. cents, after the U.S. central bank's decision.

Tuesday's rise marked the resumption of the currency's upward march after pausing on Monday as investors took a break after an 11-day stretch of gains.

The Canadian dollar ended at $1.0140 to the U.S. dollar, or 98.62 U.S. cents, up from Monday's close at $1.0197 to the U.S. dollar, or 98.07 U.S. cents.

The outcome of the U.S. interest rate decision was widely expected, though the U.S. central bank also pointed to increased momentum in the economy's recovery.

"I'd say we've had a minimal reaction to the Fed release. There was very little changes from the FOMC," said Camilla Sutton, currency strategist at Scotia Capital.

"It was a risk-on day where the U.S. dollar was generally weaker across the board and most risk assets are doing well. If we see that continue I think that just pushes the Canadian dollar one step closer to parity."

The day's domestic data also provided more proof the Canadian economy is moving to a surer footing as figures showed January manufacturing sales higher than expected and labor productivity rising for the first time in more than a year.

"Certainly it's pointing to solid growth being sustained," said Paul Ferley, assistant chief economist at Royal Bank of Canada. "At the moment, we're still of the view that we'll see some moderation from the 5% (gross domestic product) gain in the fourth quarter."

He said the data was consistent with his forecast that first-quarter growth would be just under 4%, although it could be higher if statistics continue to come in very firm.

Earlier, Finance Minister Jim Flaherty appeared more relaxed with the Canadian dollar's sharp appreciation as he said the currency's recent rally in part reflects the country's healthy fiscal position, and does not suggest extraordinary volatility.

BONDS FIRM AFTER FED ANNOUNCEMENT

Canadian bond prices were mildly firmer Tuesday after the Fed repeated it plans to keep interest rates low for an extended period.

"I don't think it caught any one by surprise. But there were some expectations that there could be a word change," said Sheldon Dong, fixed income analyst at TD Waterhouse Private Investment.

"It's much more of a relief rally than anything else, coupled with thin trading conditions."

The two-year government bond was up 4 Canadian cents at $99.92 to yield 1.541%, while the 10-year bond gained 40 Canadian cents to $102.41 to yield 3.442%.

Canadian bonds were mixed against their U.S. counterparts. The difference between 10-year yields widened 0.8 of a basis point to 21.1 basis points.

© Thomson Reuters 2009

© Copyright (c) National Post

 

Great story today on Gail Vaz-Oxlade. I love her show and I think she is doing wonders to educate Canadians on debt and knowing their financial situation.

GB

Don't just fall into a debt hole

Roma Luciw

From Monday's Globe and Mail Published on Monday, Mar. 15, 2010 12:00AM EDT Last updated on Monday, Mar. 15, 2010 12:26PM EDT

If you want to make Gail Vaz-Oxlade's blood boil, just mention debt.

"People have no idea how much money they are earning or how much money they are spending. They are clueless. I am stunned at their willingness to just fall into a debt hole," the brash and blunt Canadian personal-finance maven said in an interview.

The host of the financial makeover television show Til Debt Do Us Part and author of the Canadian bestseller Debt-Free Forever believes easy access to cheap credit, along with a reluctance to take control of their financial situations, are most people's downfall in the IOU department.

"Whenever I tell people to add up their debt, they practically faint in front of me. People do not know how deep their shit is and if it scares you to death, you need to start paying attention to it."

With interest rates likely to rise in the coming months and credit set to get more expensive, things will only get tougher for debt-laden Canadians, Ms. Vaz-Oxlade said. "All those people who got into homes and are barely making ends meet with a mortgage rate that is a gift will be severely squeezed when they need to renew their mortgages."

Rates on lines of credit will also jump, she said, forcing people to make tough choices such as cutting out the expensive weekly restaurant meals in favour of eating at home. Those who are willing to change their behaviour, however, can get out of debt by following these steps:

1 Take stock of your debt situation. Make a list of all the places to which you owe money, except for your mortgage, unless you've consolidated consumer debt in your mortgage. If so, add the amount you consolidated to your list.

2 Prioritize your debt. List what you owe by interest rate, with the most expensive (the highest rate) at the top. This is the order in which you'll pay off the debt.

3 Calculate the minimum payment on each debt. That's what you have to pay to keep current and not hurt your credit history. Write the minimum payment beside each debt and add them up. That's the least you can put toward your debt every month.

4 Figure out how much to repay to get out of the hole. If you owe $2,500 on your credit card at 18 per cent, it's going to cost you $37.50 a month in interest. But if you want to get that credit card paid off in six months, you're going to have to slap about $417 a month against the principal to make it go away. That's a total of $454.50 a month. Once you've paid off the credit card, you can use that $454.50 for your next most expensive debt. That's called snowballing.

5 Decide where you're going to get the money. If you want to be debt free, you have to find the money to pay off the debt. It may mean going over your budget with a paring knife. It may mean finding a way to make more money. Do whatever it takes.

6 Make your debt repayments automatic. Set up an automatic payment for each debt, taking the guess work out of it, and making a firm commitment to the process. On your most expensive debt, auto pay the amount you came up with to have the debt gone by your Debt Freedom Day.

7 Chart your progress. Create a chart that shows how much you owe. Each time your auto pay goes through, colour in one of your boxes, or move your marker up the thermometer so you can see the progress you're making.

I heard an interesting fact today about the financial state of first time homebuyers: According to reports, 75% of 18-34 year old first time homebuyers would be in trouble if their paycheck was delayed one week.

That's huge. Mortgages are expected to rise up to 3 percent over the next two years. Will we be faced with an influx of foreclosures when mortgage rates rebound?

I certainly hope not and there are changes currently being introduced to avoid such an issue. One such change is documented in a recent news article:

"Mortgage loans will be income-tested against the five-year posted interest rate, as opposed to the three-year rate currently used. According to TD Financial, the current five-year closed variable rate is 2.25 per cent, but people must have enough income to pay the three-year fixed rate of 4.3 per cent, to prove they will be able to handle future rate increases. Under the new rules, you will need to make enough income to pay the five-year rate of roughly 5.5 per cent. With the TD example, you will need annual household income of $68,838 rather than $59,626 to get a mortgage on a $337,000 home." (Toronto Real Estate News)

Another change is the reduction of refinancing from 95% of house value to 90%.  This is where I feel the aforementioned group of financially unstable new homebuyers will have trouble. That extra 5% of equity when even a single paycheck is a setback could prove to be the straw that breaks many a camel's back, so-to-speak.

 

 

I can forsee this spring in Canada being huge for mortgages and real estate. With an already booming real estate market and incredible mortgage rates business looks like it will be great. I can imagine a big push on sales before the HST comes into play. And with spring already being the prime season for the industry I'm prepping myself for some late nights and long weekends working. And very excited to do so, if I may say so!

I'm interested to know your take on the situation? Do you think it will be a lot of hype?

Canada Dollar Trades Near Five-Month High on Growth Outlook

Canada's dollar traded near its strongest level in almost five months as investors bet the nation's economy will be among the strongest during the recovery...  

With trade data out tomorrow ahead of Friday's employment data, a lot of players may be in ‘wait and see' mode given much of this dollar-Canada move has been on more bullish Bank of Canada rate expectations," Sacha Tihanyi, a currency strategist at Bank of Nova Scotia in Toronto, wrote in an e-mail. "A very good employment print will push these expectations and help drive dollar-Canada even lower."

Bloomberg
   Read More

Many consumers fail to understand meaning of terms

By GARRY MARR, Financial PostMarch 10, 2010    

When it comes to your mortgage contract, watch your language.

Most consumers only look at their mortgage contract -- one of the most important documents they will ever sign -- just before they are about to close on a house, says Toronto real-estate lawyer Steve Brett.

"It's very rare they come to me [first].

In residential transactions, they usually strike the deal first," he says. "The mortgage commitment comes shortly prior to closing. I'll talk to people over the phone and they'll say, 'These are the terms of the deal -- is that the way it should be?' " For about $200, Mr. Brett says a consumer could run a pre-approved mortgage by him before buying a house. "But in 35 years, I've never had that happen.

I sometimes might get asked [to look at a mortgage contract] on refinancing." Even the most basic mortgage contract terms, such as what constitutes the "prime rate" on a variable-rate mortgage, can create confusion.

"There can be different meanings to things like the prime rate or the base rate," Mr. Brett says. "They could have prime rate of 2%, but the base rate for residential mortgages might be prime plus one [percentage point], so their prime rate becomes 3%. Clients could get into difficulty thinking they are getting a heavily advertised prime rate but they are not." He had a customer come in recently with an offer of financing from a mortgage broker that said he was getting the "prime rate" from a specific company. "I pointed out that [their version] of prime rate might not be the same as the banks'.

Read more: [http://www.montrealgazette.com/business/Choose+mortgage+words+carefully/2664150/story.html]

This year's budget is not expected to be overly exciting and that seems to be a good thing for the current economic state. With all the major changes to the market, including changes to the Mortgage rules, being released ahead of time; or as this article states, "Finance Minister Jim Flaherty and his officials have spent weeks diligently stealing their own thunder"; the resulting budget should surprise few of us.

The expected result is that Canada will fare far better than all other G7 nations, forecasting the lowest GDP deficit.

Link below for more details:

http://www.reuters.com/article/idUSN2611003320100301?type=usDollarRpt

 

The Bank of Canada cut its lending rate today by half point to 0.50%, the lowest level ever. The decrease was inline with most economists expectations.

Various Canadian Banks followed this announcement by cutting their Prime Rate by 0.50% to 2.50%.

The Bank of Canada also stated that its latest projections for the Canadian economy now look optimistic in the light of the latest economic data.

Gina Burgio, Mortgage Agent
FSCO Lic. No. M08008590
VERICO Designer Mortgages Inc.
FSCO Lic. No. 10194
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada cut its overnight lending rate by 0.50% to 1.00%, the lowest since the central bank was formed in 1934. The decrease was inline with most economists expectations.

The previous lowest rate level set by the Bank of Canada was last seen at 1.12% in 1958.

In the past few days leading up to this morning’s announcement by the Bank of Canada, a few lenders began cutting some of their fixed term mortgage rates. It is expected that the various Canadian Banks will announce cuts to their Prime Rate either this afternoon or tomorrow.

Gina Burgio, Mortgage Agent
FSCO Lic. No. M08008590
VERICO Designer Mortgages Inc.
FSCO Lic. No. 10194
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Many economists expect that the Bank of Canada will cut interest rates to a record low next week on January 20th to stimulate the economy. Its expected that the Bank of Canada will cut its rate by 0.50% to a record low of 1.00%. The Canadian Banks are expected to follow with a cut to their prime rates, which are currently sitting at 3.50%.

European Central Bank to cut its trendsetting interest rate to two per cent on Thursday.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Recent post found regarding RRSP Loans. I have included the link below. Thanks Carolyn Moshtagh for the post! Click Here for the Link.

Don't forget the March 2, 2009 RRSP deadline.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

The Bank of England has cut its overnight lending rate by half point to 1.5%, the lowest since the central bank was founded in 1694.

Many economists believe that the Bank of England will cut rates below 1.0% by the second quarter. The central bank reduced the interest rate by 1.5 percentage points in November and by 1 percentage point in December.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

The Bank of Canada on Tuesday cut its key lending rate by 75 basis points to 1.50%, more than many economists had expected. This is the lowest since 1958.

Lower interest rates, if passed on by the commercial banks, encourage businesses and households to borrow and spend for expansion and consumer goods, thereby stimulating economic activity.

The interest rate cut today by the Bank of Canada was this biggest cut since October 2001.

The record low for Canada's key rate was 1.12 percent in 1958, a time when it was based on treasury yields rather than actions by policy makers.

The bank's next scheduled date for setting interest rates is Jan. 20.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.

Bank of Canada is expected to lower interest rates this Tuesday... many economists are forecasting a half-point chop to their bank rate to 1.75 per cent, the lowest since 1960.

Interbank funding spreads have narrowed by more than half since mid-October. This is making it possible for banks to pass on the central bank rate cut to customers in the form of lower prime rates.

Prime rates are the rates for loans to banks' best corporate borrowers and are the base for lending on everything from mortgages, lines of credit, consumer loans and car loans.

Gina Burgio, Mortgage Agent
VERICO Designer Mortgages Inc.
Toll Free: 1-877-345-6265
Fax: 1-877-345-6256
Email: gina@ginaburgio.com

Each VERICO Broker is an independent owner operator.