These are heavy days for Canadian homeowners. If you've been in your home even a few years, you've probably already enjoyed a modest climb in the value of your home. Even if you don't intend to sell, it's good to know that your real estate investment is doing well. But we're also enjoying an environment in which mortgage rates have reached historic lows.
That combination -- strong valuations and low mortgage rates -- has an unprecedented number of Canadians looking for ways to capitalize on the great opportunities available to them.
Whether it's to buy their first home, trade up, or take equity back out of their homes, Canadians are jumping at the opportunity to borrow at today's rock-bottom rates.
While many homebuyers are reconsidering the value of fixed-rate mortgages to lock in those low rates, you should keep in mind that adjustable-rate mortgages - the darling of the dropping rate trend - can still offer real value to homeowners. It's a matter of finding the right combination of mortgage features and options.
As banks have been joined by other lending institutions, we have seen our menu of ontario mortgage options grow accordingly - with some innovative new mortgage types now available to help Canadians take advantage of today's unusual opportunities.
One of the most innovative mortgages we've seen in a very long time is a new adjustable-rate mortgage with some very compelling features. First, it's based on an institutional rate benchmark known as Bankers Acceptance. Most of us are familiar with the rate benchmark known as Canadian Prime - and we are accustomed to assessing mortgage rates based on Prime. The BA, on the other hand, is the rate at which banks will lend money to one another - and it's typically a lower rate (sometimes much lower) than the prime rate offered to a bank's best customers. The new BA-based mortgage - compared to the best prime-based mortgage available - could have saved a mortgage client a bundle over the last several years, primarily because the prime rate tends to be "stickier" in an environment where rates are falling. Often, the more fluid, market-based BA rates deliver the rate change more quickly. The BA rate is no trade secret, by the way; pick up a copy of your favourite financial paper and look for the published money rates to find the Bankers Acceptance Rate.
But the attractive rate structure is not the only perk. The same BA-based mortgage - so welldesigned to help clients wring the last quarter point from their mortgage rate - now also comes with a rate cap which guarantees that your rate will never climb higher than 2.15% above the starting base rate - no matter what happens to rates during your mortgage term. There's no worry about locking in too high because the rate is always adjustable down.
Only the ceiling is fixed. It's a homebuyers' dream:
A mortgage with limited upside and unlimited downside. If you're thinking about buying a home this year, or you haven't had your mortgage reviewed in the last several months, take the opportunity to get an expert assessment of your many options from a mortgage professional. It could be the best investment you'll make this year!
Related Articles
Taking the Guesswork Out of Adjustable Rate Mortgages
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
Next to critiquing the decorating taste of your home's previous owner, playing the "adjustable mortgage game" may rank as one of the most popular (and least pleasant) pastimes of Canadian homebuyers.
Homeowners are Taking Out Mortgages - not to Purchase a Home - But to Boost Their Purchasing Power
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
Real estate has been an outstanding investment in most parts of Canada in the past few years. Home valuations are continuing to rise and have broken through the peak of their 1989 "bubble" in many areas of the country.
Your Mortgage Could be a Goldmine of Potential Savings
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Finance
"A penny saved is a penny earned"... or so the old proverb goes. Of course, the value of a penny has changed somewhat from the time when your mother offered her wisdom on the value of keeping what you earn. Today, you could save thousands of dollars by simply making the right mortgage decision.
Clearing the Downpayment Hurdle is Easier Than Ever
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
Buy a house with no money down! We feel intuitively that it can't possibly be true. But this year, watch for a fresh crop of promotions for mortgages available with little or no downpayment.
How to Use a Mortgage to Manage your Debt and Improve your Credit
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
What if there was such a thing as a magic card that you could carry with you, which had the power to open doors for you all over the world? You show someone your magic card and 'voila', you can have what you wish for. You would want to protect that card very carefully, wouldn't you? Your credit is a little like that.
Mortgage Security not That Costly
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
Forget everything you thought you knew about the benefits of taking a variable-rate mortgage instead of locking in for the long term.
Make a Mortgage Broker Part of your Financial Plan
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
For most Canadians, buying a home is the largest financial decision they will make in their lifetime. Yet, consumers across the country are more likely to painstakingly review dozens of investment possibilities for their portfolios than to scrutinize their mortgage choices.
First-time Homebuyer? your Rrsp May be the Downpayment You're Looking for
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
Thinking about buying your first home? Wish you had saved up a good downpayment? Maybe you have, but didn't know it.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Is flashing always used on the gable edge of a ...
By: billdm | 20-07-2008
Is flashing always used on the gable edge of a roof to seal it or protect it from leaking?
Air conditoner
By: marguerite | 20-07-2008
The central air unit is working but the air conditioner unit outside is not coming on (fan) What could be the problem? We check the circuit breaker and it is fine.
New fountain
By: fountain | 20-07-2008
Im trying to install a a six foot fountain the old style with a (cantera) at the bottom im looking for a box to put in the pump. Not sure to put it inside the cantera or out side
Cooling capacity
By: Paul Castonguay | 20-07-2008
What size unit do I need for a 1350 sq ft manufactured home?
I have a bargain store in holiday fl, my partner ...
By: frankie | 20-07-2008
i have a bargain store in holiday fl, my partner gamble all the money away i am sitting in a empty store i need money to obtain product for my store can u help?
Circuit breaker closes before dishwasher finishes
By: allenman | 20-07-2008
circuit breaker closes before dishwasher finishes
Q&A Powered by:
More from The House Team Of Mortgage Intellingence
Downsizing Your Home, Expanding Your Options
By: The House Team Of Mortgage Intellingence | 01/04/2008 | Moving and Relocating
Once the kids have grown and moved out, it often makes less sense to hold onto a big home. Ongoing maintenance costs and taxes may be difficult to justify when only one or two people are occupying the home.
7 Reasons to Use a Mortgage Broker
By: The House Team Of Mortgage Intellingence | 01/04/2008 | Mortgage
For many people, mortgage payments are their single largest expense. Yet, when financing a home, most Canadians don’t comparison shop to ensure they’re getting the best mortgage rate and terms available. This mistake can cost homeowners tens of thousands of dollars over the course of their mortgage.
5 Steps to Making Your Dream Renovation a Reality
By: The House Team Of Mortgage Intellingence | 01/04/2008 | Home Improvement
The lure of a stunning gourmet kitchen or sparkling spa-style bathroom may have you chomping at the bit to begin a home renovation. But if you heed the advice of experienced renovators, pre-planning and advanced preparation are the secrets to renovation success. Here’s a helpful checklist to get your renovation started on the right track
Is a Recreation Property Right for You?
By: The House Team Of Mortgage Intellingence | 28/03/2008 | Real Estate
Whether it's called a cottage, a chalet or a country house, the lure of a recreation property far from the hustle of the city is too much for many of us to resist.
Trading Up? Tips to Get Into That Next Home Faster
By: The House Team Of Mortgage Intellingence | 28/03/2008 | Real Estate
The resale housing market is expected to remain at near record sales levels in 2008, according to The Canadian Real Estate Association.
Belleville's House Team - One of Canada's Best
By: The House Team Of Mortgage Intellingence | 18/01/2007 | Press Releases
Local mortgage broker Peter House also named to national awards shortlist for Canada’s Broker of the Year
Mortgage "stores" are a Hit With Homebuyers
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
Okay, that may have been an easy one if you read the headline of this column. For most Canadians, their home is their biggest investment - and their most powerful financial tool.
Fixed or Variable-rate Mortgage?
By: The House Team Of Mortgage Intellingence | 11/01/2007 | Mortgage
"Wow!" you say to your spouse as you hit the brakes on the car. "Did you see the mortgage rate those guys are advertising?" Your worries are over, you're thinking. Just lock in a rate like that for the next ten years, and you've got it made.
Finance 
| Posted: 11-01-2007 | Comments: 0 | Views: 258 | Rating: (55) 
(?) 
