Newsletter #2
Dear Clients,
Bank of Canada prime drops .50 basis points
Banks dropping their prime to you by .25 basis points Today
I just want to thank all of you for voting us the most Favourite Mortgage Broker again. It means a lot to us both financially and the bragging rights that we have the best clients.
Just to show you how good we are at our job, everyone with a mortgage that is variable with a discount will now be dropping a further .25 basis points lower than low starting tomorrow. Bank of Canada lowered .50 bp so it looks like the banks are using the .25% in their best interests not yours for now! The economists are predicting prime rate will go lower as the year finishes.
Do not lock into a fixed rate! All of you have the mortgages you should have. The people that are going to be affected by this market are people coming up for renewal in the near future and new buyers. We have however worked out a great strategy for them to weather over this.
So go out and celebrate. For every 200,000.00 mortgage that half a point translates into over 2250.00 left in your pocket over 5 yrs and of course the lower the rate the more you are paying down your principal.
Newsletter
Dear Clients,
I went to an economic seminar yesterday by Benjamin Tal and here is the brief form of it. Attached are his charts showing markets and reactions to date which some of you may find interesting.
To summarize: Prime is going down nicely so all who are on prime should stay on it until the fixed rates go down which they are predicting next year sometime. Because of some real factors such as more expensive food because of the US push to supplement farmers to grow corn for fuel instead of food. (you could save more gas by checking your tire pressure every two weeks) they are expecting inflation to really hit in 2010 and 2011. This will mean interest rates will climb and prime may move up sharply for a couple of years. Lets say prime moved from 4% to 7%? For those on prime minus it is not too bad but we will be watching closely next year for a great time for you to lock in if you still have 3+ years to go on your mortgage.
So enjoy the lower rates in the next 6 months to a year. Don’t spend a lot on things you will not profit by. Markets are going to be good for re-investments in the next 6 – 9 mo.
All the best!
