So much is happening in the economy these days that people aren’t sure what to do when it comes to real estate and financing. According to Garry Marr, Financial Post; Wednesday October 15, 2008, Canadian banks are trying to convince consumers to lock in their mortgage rates because more than 20% of the home loans they have negotiated have become unprofitable, according to industry sources. Two weeks ago a consumer could get a variable rate product at 0.60 percentage points below prime; today it is one percentage point above prime.

Vince Gaetano, a vice-president with Monster Mortgage, a mortgage brokerage firm suggests that anybody with a mortgage negotiated in the past two years would be out of their mind to lock in to, say, a five-year term, he said. They would be going from a rate as low as 3.35% to 5.79%. Prime is now 4.25% at TD, but two weeks ago the bank was offering a variable rate of 60 basis points below prime, meaning the consumer was borrowing at 3.65%. For those now entering the housing market, the rate is 5.25% for a variable rate product, but Ms. Dal Bianco said that might not be high enough. “We are not making much money on those, if anything.” she said.

The good news? Sutton has a new mortgage program offering a rate of 4.75% on a 5 year closed term mortgage! For more information, or for questions about financing your home, please call Lisa.