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My Rates

6 Months 3.10%
1 Year 2.44%
2 Years 2.14%
3 Years 2.34%
4 Years 2.59%
5 Years 2.64%
7 Years 3.24%
10 Years 3.79%
6 Months Open 3.10%
*Rates subject to change and OAC
AGENT LICENSE ID
502013
Chris Simpson Mortgage Consultant

Chris Simpson

Mortgage Consultant


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Address:
109 - 3550 Saanich Road, Victoria, British Columbia

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BLOG / NEWS Updates

"Free" Down Payment, Help or Hindrance?

Last week Premier Christy Clark made an announcement stating the BC government was going to help First Time Home Buyers by matching their down payment, contributing up to $37,500 towards the purchase of their first home. My initial thought was this is great! In light of the recent changes made by the Federal Government any opportunity or program that keeps the real estate market buzzing seems like a good idea. But we are talking about the government so reading the fine print is always important and the more I read the less impressed I became. We all know the recent spike in real estate values is making it more and more difficult for First Time Home Buyers to get into the market. The current benchmark value of a home in Victoria according to the VERB November stats is $753,800 nearly a 24% increase from one year ago. To understand this program a little more lets have a look at the numbers. But rather than looking at the benchmark value lets look at a more reasonable starter home. Purchase Price $550,000 Minimum Down Payment $30,000.00 1st Mortgage (Your Lender) $540,020.00 Base Mortgage Request $520,000.00 2nd Mortgage (BC Gov) $15,000.00 Default Mtg Insurance Premium $20,020.00 Total Amount Owing $555,020.00 Monthly Payments 1st Mortgage - Year 1 to 5 $2,500.00 1st Mortgage - Year 6 to 10 $2,614.00 2nd Mortgage Year 1 to 5 $- 2nd Mortgage - Year 6 to 10 $89.00 *Rates on years 1 to 5 based on 2.8%. Years 6 to 10 based on 3.3%, 2nd mtg has 0.50% rate surplus While I do appreciate the BC Government helping homebuyers get into the market if they have not been able to save enough of a down payment just yet, otherwise they have to sit on the sidelines while they save more and possibly watch the values continue to climb faster than they can save. It is a little scary to see a First Time Buyer that has borrowed 101% of the value of their new home. With all the recent changes made by the Federal Government to reduce so called risky lending this move seems like a step in the opposite direction. One of the comments that caught my attention was how this could save a new homeowner interest costs as they would be able to put a bigger down payment on their new purchase. Of course, I was curious to see if that was true. To save you the headache of reading over dozens of numbers lets just look at the mortgage balance and interest costs over the first 10 years of the mortgage based on the same rates and purchase price as above. But lets assume Borrower #1 has the 5% and doesnt apply for the grant while Borrower #2 with the same cash savings does. Borrower #1 Total Amount Borrowed (no grant) $538,720 Interst Paid Years 1 to 10 $137,619 Balance Remaining After 10 Years $370,458 Borrower #2 Total Amount Borrowed (no grant) $531,760 Interst Paid Years 1 to 10 $133,591 Balance Remaining After 10 Years $369,510 Yes, it looks like you can save some interest over the first 10 years of your mortgage by taking advantage of this grant from the BC Government. But wait, what if Borrower #1 took the same amount money from the proposed payments Borrower #2 has to make for the 2nd mortgage and made a principal payment of $178 per month for years 6 to 10? Well the answer is Borrower #1 would save an additional $907 in interest costs, still not more than Borrower #2. However, the big difference in Borrower #1s favor would be the mortgage balance after making the extra payments, only owing $358,871 after 10 years. While I applaud the thought behind stimulating the market for First Time Home Buyers this program may not be suitable for everyone. All the more reason you need to come talk to your local Mortgage Broker.

Can an annual mortgage review help you stay on track?

The holiday season is once again upon us.People are filling their homes with decorations (Ill get thereeventually) and thoughts are turning to friends and family near and far. Your finances might be the furthest thing from your mind, unless you are wondering why the Hatchimal that your son or daughter wants is so expense. Really? A toy egg that hatches alittle stuffyanimal? At least your child or (brother-in-law) wont be nursing a concussion on Boxing Day like I am sure many did last year after the Hoverboard craze. An annual financial review is not only helpful for budgeting your holiday expenses but it can also help you remain on a solid path to achieving your overall goals. This coming year could be particularly important to do a review with the uncertainty which has stemmed from the US election and all the changes handed down by our Finance MinisterBill Morneau. The Canadian economy has been and will continue to be affected by all the changes.We have already seen certain lenders increase interest rates on various products and in some cases even discontinuecertain products. However it is not all doom and gloom, I am happy to say that we live in a very beautiful part of thiscountry and despite allthe changes, the realestatemarket willsurvive, we just need to adjust our approach. I encourage all homeowners or soon to be homeowners to do an annual review of your financial goals. Working closely with your financial planner and mortgage broker, you can navigate the snow covered paths and put yourself in a better position to achieve your goals. A mortgage can be a powerful tool to help you achieve those goals. As your mortgage professional, I can help you with any questions that you might have.Please feel free to reach out and contact me. Warm wishes to you and your family this holiday season.

MY LENDERS

TD Bank Scotia Bank First National B2B Bank Home Trust
MCAP Merix Industrial Alliance Optimum Canadiana Financial
Equitable Bank ICICI Bank Fisgard Capital  RMG Mortgages Street Capital