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My Rates

6 Months 4.75%
1 Year 2.69%
2 Years 2.69%
3 Years 2.69%
4 Years 2.69%
5 Years 2.69%
7 Years 2.99%
10 Years 3.04%
*Rates subject to change and OAC
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BROKERAGE LICENSE ID
11947
Nick Holloway Mortgage Agent

Nick Holloway

Mortgage Agent


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2725 Queensview Dr Suite 500, Ottawa, Ontario

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Many Canadian homeowners pay too much for their homes because they are not getting the best mortgage financing available in the market.

 

The mortgage process can be intimidating for homeowners, and some financial institutions don't make the process any easier.

 

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I have access to various mortgage products at my fingertips and I work with you to determine the best product that will fit your immediate financial needs and future goals. I will save you money by sourcing the best products at the best rates – not only on your first mortgage but through every subsequent renewal. So whether you're buying a home, renewing your mortgage, refinancing, renovating, investing, or consolidating your debts — I’m the Mortgage Broker who can help you get the right financing, from the right lender, at the right rate.

 

 

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BLOG / NEWS Updates

Mortgage Qualification Rate is reduced from 5.34% to 5.19%, why is this important?

By Nick Holloway Following anannouncementby the Bank of Canada, the Mortgage Qualification Rate (MQR) will be reduced by 0.15% from 5.34% to 5.19%, or 2% above contract mortgage rate (whichever isgreater). This is the first reduction we have seen in the MQR since it was last increased in May 2018. To provide a brief recap, the MQR was introduced as part of the B20 guidelines with the express intention of diminishing the amount home buyers can qualify for in respect of mortgage financing. This was initially rolled out for high ratio mortgages (down payments less than 20%) effective from October 17, 2016, and later revised to include conventional mortgages (down payment more than 20%) effective from January 1, 2018. The net effect of these changes for all federally licenced lenders was widely reported to reduce purchasers buying abilities by approximately 20%, in comparison with previous qualification rates - which would have been based on the mortgage contract rate at the time of securing the borrowers mortgage commitment. How is the Mortgage Qualification Rate calculated? The Bank of Canada release the benchmark posted 5-year rate every Wednesday, which is based on the mode average of the big 6 (chartered) banks posted 5-year fixed mortgage rates. Whilst the mode average is currently split equally at 5.19% and 5.34% respectively, the Bank of Canada took a view on the overall asset changes in aggregate and determined the 5.19% was a more appropriate rate to prevail. Why does it seem the chartered banks are permitted to determine the mortgage qualification rates? This isan interesting question as towhy the regulators decided to use these rates to determine a qualification benchmark at the outset of setting the new mortgage rules. First we should look to understand the reasons why the chartered banks require a 5-year posted rate in the first place, when the reality of what most borrowers receive byway of a closed 5-year fixed mortgage rate is generally far lower than the comparable 5-year posted mortgage rate. We should consider that often the first time a borrower is likely tosee their chartered banks posted rateis when they find they needto break their closed fixed rate term mortgage early for whatever reason.The borrower is then required to pay apre-payment penalty based on an Interest Rate Differential (IRD) calculation, which is generally not calculated from the borrowers actual mortgage rate, butthe elevated posted rate (or using the discount received from the banks posted rate) which typically has the effect of amplifying the penalty the borrower must bear in favour of the chartered bank. What isthe effect of a 0.15% reduction in MQR for mortgage qualification? For borrowers who find themselves at the limit of qualifying, this will increase the amount they can qualify for. In the same way that the 2% increase in mortgage qualification mentioned earlier had the net effect of reducing a borrowers purchasing power by around 20%, here we can apply the same logic in reverse. Areduction in the MQR of 0.15% translates to an increase of a borrowers purchasing power of1.5% -in other words, home buyerscan qualify for around 1.5% more property.However, it poses the questionwhether this goes far enough considering we have recently seen far greater decreases in rates offered on fixed term mortgages, which have not been reflected equally in the chartered banks posted rates. Nevertheless, a small victory is a victory after all.

Bank of Canada holds Policy Interest Rate at 1.75% at April 24th 2019 meeting

By Nick Holloway As had been widely expected, the Bank of Canadas latest monetary policy statement was released today with no change to the overnight lending rate. The overnight rate remains at 1.75% after Canadas central bank last made an increase in October 2018 from 1.5%. The Bank also lowered the neutral overnight rate from 2.5%-3.5% to 2.25%-3.25%. Accompanying the announcement, the Monetary Policy Report was issued which provides some of the key figures the Bank of Canada is tracking. The first being inflation, which remains close to the target of 2%, with a dip in CPI inflation predicted for the 3rd Quarter. The Real GDP figures forecast growth in 2019 of 1.2%, and around 2% in 2020 and 2021. So, whats causing this pause in interest rate increases, and is there any scope based on the current figures for the Bank of Canada to increase stimulus to the economy by making a cut in the overnight rate. One area to monitor is the Overnight Index Swap Futures which is traded on the Montreal Options Exchange. This is a tradable instrument and by way of its pricing, it provides an indication in real time of what the probability is for an increase or hold decision of the overnight rate at the next Bank of Canada meeting. Having watched this market for some time, the indications have remained at zero for some time now, and this seems to be a broadly shared sentiment by many of the other global central banks which we should take the time to observe. Arguably the most important central bank for the interests of the global economy is the US Federal Reserve Bank, primarily due to the nature of the US dollar being the largest reserve currency in the world. The Federal Reserve have indicated that they dont foresee any further increases in 2019, as they are looking for the global economy to be firing on all cylinders to justify removing monetary policy stimulus by way of increasing the Federal Funds Rate from its current level of 2.5%. Why is the Federal Reserve Bank so important in respect of the global economy? We need to take some time to understand the impact of increasing interest rates in the US in respect of debt and currency held by emerging economies. A number of emerging economies rely on debt denominated in US dollars, so the increase of interest rates in the US can have the effect of increasing the cost of carry for this debt, and this can also be further compounded by the currency effect of an increase in the exchange rate, as a higher interest rate tends to have the effect of strengthen the home currency which can in turn make it harder for emerging economies to repay this debt based on a stronger US Dollar. To look at other developed economies, they tend to be more reliant on their own central banks to provide guidance on investment decisions as any debt instruments tend to be denomination in their respective currencies. The Bank of England currently maintain the official bank rate at 0.75% after increasing from 0.5% in March 2018, while the European Central Bank (ECB) key interest rate is currently at 0.00% where it has remained since March 2016. There are many factors which are paring back growth prospects in Europe which are causing these low interest rates, but it is worth noting a significant divergence from the North American economies who have over the past couple of years found a greater opportunity to exert a level of tightening by way of increases to their overnight rate up to now. In conclusion, it is worth keeping all these factors in mind when you are making investment decisions as individuals or collectively. For many households, the biggest investment they will make in their lifetime is real estate and its important that they are able to make an informed decision with all the tools that are available to them at the time.

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