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your mid-week mortgage market minute
with Jim Cook, Broker
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in the mortgage marketplace ...
Last week, we talked about how US strength could start to impact Canadian rates - and potentially delay rate declines further into 2024.  I'm sorry to say, professional bond investors are starting to sing from that same song book.  Recent US reports combined with a 0.4% month over month increase in core inflation has started shake the market's belief of early Prime rate reductions.

Canada's 5 yr bond yield has now climbed 64 bps in the last 6 weeks and margins on 5 yr fixed rates are now razor thin.  While lenders want to keep rates as low as possible to attract business in this slower market, I have been advised by several lenders of 5 yr insured rates increasing from 0.05 to 0.2% yesterday.  

A key future date is Feb 20th, when Canada releases its January CPI report.  A lower inflation number could help calm and hopefully stabilize the bond market.  A higher number could add a little fuel to the current brushfire.  

It's an interesting time to observe lender activity.  Management is caught between trying to attract volume with lower rates and still ensuring that any business they do is profitable enough to be worth doing.  This is impacted by their internal economists beliefs on the likelihood of a recession, when and how deep, and importantly, what that could mean to mortgage and loan default rates as well as property values.   They need to balance volume growth and protection against loan loss.
rate snapshot ...
While rates are mostly stable at the moment - margins are now very tight and we can expect changes daily.  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  5.14% or $5.90 per $1k in mortgage
  • 5 yr fixed  5.09% or $5.87 per $1k in mortgage
For clarity, a $500,000 at 5.09% on a 25 yr amortization would have payments of 500 x 5.87 = $2,935 monthly.

Note also that rates can change daily, certainly differ between lenders and definitely differ based on down payment, mortgage features and hidden costs.
in Jim's practice ...
I have had a few requests from folks wanting to share this email with their own client base.  I'm working on some creatives and establishing a single URL to direct folks to.  I'll advise when it's ready but feel free to share this in it's current format.

This past week has seen a mini-surge in activity - which I'll gladly attribute to rare coastal sunshine and mild temperatures.  People seem to be exhibiting that typical early spring need to look at real estate.

There is no one trending activity - I have someone looking to purchase property with kids in the GTA, someone looking seriously at old London, a handful of purchasers finding success locally and some renewal folks looking at consolidating debt and extending their amortization to cope with the increase in rates.  It's nice to have a little uptick in activity.

I also mentioned previously that we had launched a quiet campaign seeking to increase our number of google reviews.  Our intent was to break through the 100 - 5 star review count, starting the year just under 80.  All we did was explain the value of reviews in promoting our office to our existing client base in a single email and asked for their help.  4 weeks later we have reached 117, with much of the client base still to be contacted.  I love my job ;-)

Have a successful week!  Happy Valentines Day!
The first time I sought a mortgage through Jim was quite a challenge.  I had other properties out of province and a reduced income. Jim worked his magic and made it happen.  Since then I’ve had another mortgage through Jim. Excellent results every time. Contact Jim for his financial and mortgage advice as he’s great to have on your team. (SD, Jan 2024)
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Jim Cook is a nationally-recognized broker with some quarter billion in mortgages funded. 
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