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Hello everyone and Happy "One Month Before Christmas"!!

 Yes, we all have exactly one month to get ready.  Isn't this great service? Not only do we remind you when to lock in...we remind you when to start your Christmas shopping.   We hope that you have a wonderful holiday season getting together with friends and family.

 We'd like to begin our newsletter by taking some time to thank all of our clients who work in health services.  We realize how hard you have been working during this H1N1 crisis and appreciate your efforts out there on the front lines. Thank you.

 News from the CAAMP Conference

 We recently attended the CAAMP Conference in Toronto where thousands of mortgage professionals and  lenders gathered to exchange information and attend workshops to keep up to date on trends in the  industry and educate ourselves on new tools  and opportunities available for us to assist you in creating  your mortgage solutions.

 It was a very exciting event and lots of fun meeting with the top executives on the 56^th floor of the CIBC building overlooking the lights of Toronto. The following is the latest news from one of those top executives , economist  Benjamin Tal.

 Mr. Tal basically supported what we have been saying in our previous emails. That Prime will stay low well into the end of 2010. Below are some key quotes and observations that he shared with the crowd....

The Credit Crisis

• The TED spread - which is the key indicator of credit market liquidity - is back to a healthy 25 basis points, after hitting 500 last fall.


• " This recession is over...period...but we will pay heavily for what the U.S. Fed is doing." ( this means that interest rates will rise and deficits will drag on Canada's economy so we will have to be prudent and ready for rates to rise)


• There will be another rate of mortgage "resets" in the U.S. but there will be much less of a rate shock as the new rates will be closer to the teaser rates that the owners are paying now.


• Fewer of these loans are securitized  than in the subprime crisis.


• Consumers will slow their spending AND borrowing.


• U.S. monetary policy is dictating Canadian policy.


• The Bank of Canada will have not choice but to raise rates until the U.S. does. Otherwise our dollar would rise and threaten Canada's export economy.


• Ben predicts that Canadian rates will not rise as much as in the U.S.

Real Estate

• In terms of real estate, Mr. Tal mentioned, " We should not be in a seller's market in the 9^th inning of a recession" BUT there is no information indicating that there will be a real estate bubble.


• Expect a 2% to 3% increase in rates, starting no earlier than Q3 of 2010 and rates usually go up faster than they come down.

Canada Stronger than our Neighbours to the South

• duration of unemployment in Canada ( which is as important as unemployment rates) is much lower than in U.S.


• This means that Canadians can more easily find new jobs and continue to pay their mortgages.


• Canadians have three times more cash savings than Americans per capita and this cash is waiting to be redeployed.


• Income and consumer confidence is rising twice as fast in Canada as in the U.S. and it is all about consumer confidence


• Canada will outperform all other G7 countries in GDP growth in 2010.

All in all Mr. Tal's news was relatively positive for Canadians. We will continue to recommend the Variable Prime mortgages and keep a close eye on any shifts in rates. Continue to read your Variable Rate newsletters and pass them on to friends and family and we'll keep you posted on where things are going.

 Prime rate is the same at 2.25%

 Lock in Rates (lock in not recommended at this time for those at + .80% and over can contact the office to review advantages of dropping to Prime at the time)

3 yr  3.55%

4 yr 4.00%

5 yr 4.09%

Suzanne Boyce

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Dear Clients

 Here is the latest update from CIBC World Markets.  Easy to read and very informative.  Boiling it down for those who do not want to read Benjamin Tal is saying the Bank of Canada Rate could be stalled for a long time yet and unfortunately we could be looking at a back to back recession.  They will not be able to slow down the increase in housing prices by increasing interest rates as that would tank the whole economy.   They can not increase prime rate now because it would strengthen the Canadian dollar and they can not decrease below where they are currently at .25% of course to combat the increase in the dollar. 

 So still good news for those on prime.

 NOTE:  There are some of you (that I have not talked to yet) who are or were on above prime products like .80% to 1.1% above prime.  We are actually able to drop you down to 2.25% even if you recently locked in with the same costs.  Please call or e-mail the office if you are .80% to 1.1% over prime so we can work out the #s for you asap. 

 If you are in a fixed term mortgage some rates have gone up making penalties less.  Now that we know prime is very stable for a long time it is the time to get out of the fixed rate products and save thousands!!

 Here is an example: Dropping let' s say from 5.8% to 2.25% for even 3 yrs your savings in interest would be $36,116.00.  Do a friend or relative a favour and send this email to them just in case.  You won't have to think of presents for the rest of your life!

 Have a super fall weekend.  Excellent weekend for hiking the conservation trails - and taking a picnic.  I love it when everyone has those fresh rosy cheeks and smells like fall.  For the adults it is great to have a group of friends at the last minute and have a pot luck dinner after, along with beers from around the world. 

Have a great weekend,

Suzanne and Julie