Homebuyers looking to take advantage of low mortgage rates

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It seems like not a day can go buy without some industry observer proclaiming that the sky is falling in the Canadian real estate market. However, if data from the Bank of Montreal is to be believed, maybe the end times aren't as certain as some may think.

While it's no secret that the housing market has cooled in recent months, the BMO's Housing Confidence Report shows that nearly half of Canadian homeowners (48 percent) intend to purchase a property within the next five years. This number is relatively unchanged from fall 2012, meaning Canadians still have a high level of confidence in the housing market. Continue reading

Dissecting the one-year mortgage

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Many Canadian homebuyers know of long-term mortgage offerings, but not many know that they can take advantage of a one-year mortgage.

In a recent piece for Canadian Mortgage Trends, editor Rob McLister highlighted the benefits associated with a one-year mortgage and shed light on to why it is being overlooked in today's Canadian housing market.

McLister credits the emergence in popularity for 5- and 10-year home loan terms to the extremely attractive rates that are currently being offered for them. However, a one-year fixed mortgage lets the borrower renew into a 4-year fixed any term.

"The challenge with most 1-year terms, compared to variable rates, is that you usually have to wait until three to six months before maturity to secure (hold) your renewal rate," McLister writes. "By contrast, most variable-rate mortgages let you lock in at any time. That makes them preferable to 1-years in certain situations." Continue reading

Mortgage terms just as important as mortgage rates

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Much has been made of the historically low mortgage rates currently driving home sales across Canada, but when it comes to finding the perfect home loans, rates are only one part of the equation.

Advertisements for the best mortgage rates are everywhere, but there is less information readily available regarding mortgage terms, according to mortgage expert Robert McLister. Writing in The Globe and Mail, McLister points out that the length of a mortgage will ultimately determine how much interest homebuyers pay.

Choosing between a longer, fixed-rate mortgage and a shorter, variable-rate mortgage is an important decision, and the pros and cons should be weighed carefully, according to McLister. A lengthier mortgage term provides certainty and stability for those whose financial situations might change, while a shorter mortgage could be beneficial to those who are in a position to pay off large chunks of it within the first few years or who are planning to move soon. Continue reading