This market is BONKERS.
Thanks to our mortgage partners at Spire mortgage for this incredibly quick update on the newest bank of Canada mortgage rate DECREASE, the second drop we've seen recently.
100%, this is the most crazy mortgage market that we've seen in our lifetime. Changes to the fixed rates, variable rates & bank rules coupled with the up coming changes to the stress test (that will take affect on April 6th, 2020) have created unprecedented volatility.
It is imperative that any buyer clients, pre-approved for mortgages check in with their lending professionals about their mortgage pre approvals prior to writing an offer. Rates, rules and times are a changin' faster than we've ever seen.
Clients that have mortgages committed at 2.80% or higher should absolutely consider breaking these mortgages and recommitting at the new, 5 year fixed rates. We have calculators that can help clients run these numbers in 5-10 minutes.
An Unprecedented Bank of Canada Drop Today, March 13th
The Bank of Canada today lowered its target for the overnight rate by 50 basis points to ¾ percent, effective Monday, March 16, 2020. The Bank Rate is correspondingly 1 percent and the deposit rate is ½ percent. This unscheduled rate decision is a proactive measure taken in light of the negative shocks to Canada’s economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices.
It is clear that the spread of the coronavirus is having serious consequences for Canadian families, and for Canada’s economy. In addition, lower prices for oil, even since the last scheduled rate decision on March 4, will weigh heavily on the economy, particularly in energy intensive regions.
As the situation evolves, Governing Council stands ready to adjust monetary policy further if required to support economic growth and keep inflation on target.
The Bank has also taken steps to ensure that the Canadian financial system has sufficient liquidity. These additional measures have been announced in separate notices on the Bank’s website. The Bank is closely monitoring economic and financial conditions, in coordination with other G7 central banks and fiscal authorities.
On the back of this announcement Canadian banks are slashing their differentials to prime for Variable mortgage rates. We've just heard the announcement that Scotiabank will change their differential from -0.70% to -0.10% today at 10 pm.
At this time, we do not know if the banks will follow the BOC's drop in Prime rate. More developments to come.
Bonds continue to be weak and we submitted 5 year, fixed rate mortgages at 2.34% for our customers today.
If you're seeking expert and local real estate and mortgage advice in Calgary and surrounding areas, give us a call at 587-578=7653 and let us know any questions or scenarios you'd like to explore.
OUR CALGARY REAL ESTATE BUYERS GUIDE IS PACKED FULL OF INFORMATION ON THE MORTGAGE PROCESS, IF YOU'RE A BUYER WHO IS SEEKING GENERAL INFORMATION ON MORTGAGES, SEND US A MESSAGE ON THE FORM BELOW AND REQUEST OUR CALGARY BUYERS GUIDE.
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