When purchasing an energy efficient (green) home, in addition to saving on energy costs, you can also save on the mortgage insurance premium. Here are two ways to save on your mortgage with an energy efficient home:
1) 10% CMHC Mortgage Insurance Premium Refund for energy-efficient homes. You can apply for the refund after you take possession of the property directly through the mortgage insurer.
2) Amortization flexibility for energy-efficient homes without premium surcharges. This means you can increase your amortization to 35 years without paying the extra insurance premium surcharge for an extended amortization.
To qualify for these savings, your property must be built to certain standards. The guidelines are as follows:
1) Must be: R-2000 compliant, or
2) Certified under a CMHC eligible energy-efficient building program (i.e. Built GreenTM, Alberta and BC – gold label, NovoclimatMC, ENERGY STAR® and Power Smart™), or
3) Rate 77 or higher on an energy assessment performed by an NRCan licensed energy advisor.
Previously built homes or new construction homes that have the certificates and/or documentation as above can qualify you for the savings. Please call us for further details.
If you are looking to purchase a property, now is an excellent time with interest rates predicted to remain low for the near future, continued price appreciation during the coming years and further savings for going green. Contact us today to take your first step of mortgage financing to purchase you new property.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
Monday, February 22, 2010
Monday, February 1, 2010
How Fixed and Variable Rates Are Determined By The Lenders
Interest rates are a very big topic on the minds of many, especially when it comes to a mortgage. However do you really know how interest rates are determined by the lenders? This newsletter will explain the factors examined when determining interest rates.
How are fixed rates determined?
One misconception about fixed mortgage rates is that they move up and down accordingly to the Bank of Canada’s overnight rate or the lenders prime rate. In reality the prime rate is not used to determine fixed mortgage rates at all. Lenders use the Canadian bond market yields to determine the fixed mortgage rates offered. Meaning, if the bond market yields start to increase the fixed mortgage rates will also increase and conversely decrease when the bond yields decrease. So to know where fixed rate mortgages are, heading you need to know what is happing in the bond market. Bond yields are determined on demand for bonds. The reason why current fixed mortgage rates are low is because bond demand is high and yields are also low. Bond yields are currently low because many investors are buying bonds creating a high demand which lowers the yield. Bond demand is higher when money transfers from the equity markets to the safer bond market which usually happens during more uncertain economic times or recessions. As the equity market demand picks up money starts shifting away from the bond market (lowering the demand), thus the yields start to increase which effectively increases fixed mortgage rates.
How are variable rates determined?
Variable rates are directly reflected by what the Bank of Canada’s overnight rate and lenders prime rate are set at. The Bank of Canada does not set the prime rate but the lenders usually adjust their prime rates when the Bank of Canada changes the overnight rate. This means today with the overnight rate and prime rate not being able to move down any further that variable rate mortgages have nowhere to go but increase in the future.
We hope that you now have a little more knowledge about how mortgage interest rates are determined. If you have any further questions about interest rates please feel free to contact us anytime.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
How are fixed rates determined?
One misconception about fixed mortgage rates is that they move up and down accordingly to the Bank of Canada’s overnight rate or the lenders prime rate. In reality the prime rate is not used to determine fixed mortgage rates at all. Lenders use the Canadian bond market yields to determine the fixed mortgage rates offered. Meaning, if the bond market yields start to increase the fixed mortgage rates will also increase and conversely decrease when the bond yields decrease. So to know where fixed rate mortgages are, heading you need to know what is happing in the bond market. Bond yields are determined on demand for bonds. The reason why current fixed mortgage rates are low is because bond demand is high and yields are also low. Bond yields are currently low because many investors are buying bonds creating a high demand which lowers the yield. Bond demand is higher when money transfers from the equity markets to the safer bond market which usually happens during more uncertain economic times or recessions. As the equity market demand picks up money starts shifting away from the bond market (lowering the demand), thus the yields start to increase which effectively increases fixed mortgage rates.
How are variable rates determined?
Variable rates are directly reflected by what the Bank of Canada’s overnight rate and lenders prime rate are set at. The Bank of Canada does not set the prime rate but the lenders usually adjust their prime rates when the Bank of Canada changes the overnight rate. This means today with the overnight rate and prime rate not being able to move down any further that variable rate mortgages have nowhere to go but increase in the future.
We hope that you now have a little more knowledge about how mortgage interest rates are determined. If you have any further questions about interest rates please feel free to contact us anytime.
We are now on Twitter. Click Here to start following us and be the first to receive daily updates about interest rates and mortgage news.
Any questions at all about mortgage financing please refer to our newly designed website at www.yourmortgagecontact.com or call us today. In addition please let your family and friends know about Your Mortgage Contact. We appreciate all referrals and everyone always receives personalized service. Please contact Betty at 403-532-3927, e-mail bsaskiw_prolink@telus.net, Kevin at 403-589-3021, kevsas@telus.net or at our updated website: www.yourmortgagecontact.com
Sincerely,
Betty Saskiw, AMP
Mortgage Associate
&
Kevin Saskiw, CFA
Mortgage Assistant
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