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your mid-week mortgage market minute
with Jim Cook, Broker
in the mortgage marketplace ...
As you know, the latest Bank of Canada interest rate announcement (no change) and quarterly Monetary Policy Report (MPR) were released this morning.  The MPR is helpful in getting more insight into what the BoC is looking at and what they are basing forecasts on.

In simple terms, inflation is easing globally and domestically - see second chart below.  In Canada, that is a very gradual process with shelter and food costs still much higher than we want.  Housing inflation (mortgage interest and rents) remains near 7% and food costs are still around 5%.  Consumer spending is also slowing down.

Similar to my comments last week, the BoC is not anticipating any Prime Rate moves in the first 4-6 months of 2024, and if inflation numbers perform per forecast, we could expect to see some easing in the second half of 2024.  The BoC is now anticipating being back to their 2% target range in 2025.

What does that mean for fixed mortgage rates?   I think it reflects how the market was already viewing things.  Fixed rates go up on the elevator and down by the stairs - meaning they generally are slower to come down.   You can see below the gap between the green 5 yr bond rate line and the red 5 yr fixed rate line is still bigger than it was 18 months ago.  Lenders expect bond rates to not reduce in a smooth line - and they are happy to build in a larger profit to offset any mortgage losses as we move through the big rate jump mortgage renewals of the next 24 months.


Anyone wanting to do a deep dive into the BoC Monetary Report can find it here.
rate snapshot ...
Rates are largely stable at the moment - no change since last week.  For properties priced below $1 million, with less than 20% down payment, example rates would be:
  • 1 yr fixed  7.50% or $7.32 per $1k in mortgage
  • 3 yr fixed  5.39% or $6.04 per $1k in mortgage
  • 5 yr fixed  5.24% or $5.95 per $1k in mortgage
For clarity, a $200,000 at 5.24% on a 25 yr amortization would have payments of 200 x 5.95 = $1,190 monthly.

Note also that rates can change daily, certainly differ between lenders and definitely differ based on down payment.
in Jim's practice ...
We use a simple 1-2-3 process with all clients - and it is all by phone with some real-time sharing/collaboration on a google spreadsheet as well as some recorded video follow up.

Step 1 - Discovery Call.  This is typically 30-45 minutes, but can be as short as 10 minutes.  The intent is to share information - to ensure there is something that we can do to help - to refer them elsewhere if that is the best plan for them - to obtain the foundation details we need to set up Step 2 - and finally to ensure the clients have got their initial questions answered.

Step 2 - Hurricane Portal.  Assuming we are moving forward, clients complete an online application form and we provide access to our encrypted portal called Hurricane.  All documents are requested/uploaded in a much more secure manner than email.  All signatures required can be completed digitally, in a marginally more secure manner than services like Docusign.  As important, it gives clients a one-stop location for all details related to their mortgage - and they can do things on their own time/schedules in a way that is most efficient for them.

Step 3 - Approval.   We are back to clients within 24 hours for pre-qualification.  Once we have a negotiated Purchase Agreement - then we confirm the mortgage details, seek approval and get it papered up.


Have a successful week!
Great experience with Jim. He gives his honest advice and opinion on mortgage options and is not pushy at all. Jim even gave us advice that would cost him his fee because it was a better option for us. I would highly, highly recommend him to anyone looking for a mortgage.  (TK, Jan 2024)
chatwithjim.ca

the best place to refer clients to get questions answered quickly!  No Phone Tag.  They book directly into my calendar to schedule a call!
Jim Cook is a nationally-recognized broker with some quarter billion in mortgages funded. 
www.mymortgageplace.ca          519-832-7882            chatwithjim.ca
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