Interest Rates<br />What does the future hold?<br />Presented by: Brad Compton<br />
Tonight’s Discussion<br />Fixed vs. Variable<br />What drives rates?<br />Where have we been?<br />Where are we going?<br ...
Fixed VS. Variable<br />
Fixed VS. Variable<br />
What Drives Rates<br />Variable – Bank of Canada<br />Fixed – Canadian Bond market<br />Bond Yield<br />Mortgage Rate<br /...
10 Year Stats<br />3.00%<br />Average Prime Rate: 4.46%<br />Highest Prime: 7.25%<br />Lowest Prime: 2.25%<br />Average Fi...
Where Are We Going?<br />UP<br />WHEN???<br />
Where Are We Going?<br />Variable – Overnight Index Swaps (OIS)<br />
Where Are We Going<br />Canadian 5 yr Bond Yields<br />
New Mortgage Rules<br />Reduced amortization to 30 years<br />Refinances up to 85%<br />CMHC no longer backing HELOCs<br /...
New Mortgage Rules<br />Financial Ruin!<br />
New Mortgage Rules<br />Roughly 30% of mortgages last year had 35 yr amortization. Most were FTHB<br />TD estimates the am...
New Mortgage Rules<br />
New Mortgage Rules<br />Default rate below .5%<br />CMHC Net Income $931M<br />71% of book is on loans with an LTV of less...
Who is Responsible?<br />
Thank You<br />Brad Compton<br />Invis Mortgage Agent<br />Twitter: bcomp123<br />www.YourLowMortgage.ca<br />
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remarkto Feb 7, 2011 - Canadian Interest Rates by Brad Compton

  1. 1. Interest Rates<br />What does the future hold?<br />Presented by: Brad Compton<br />
  2. 2. Tonight’s Discussion<br />Fixed vs. Variable<br />What drives rates?<br />Where have we been?<br />Where are we going?<br />New Mortgage rules<br />
  3. 3. Fixed VS. Variable<br />
  4. 4. Fixed VS. Variable<br />
  5. 5. What Drives Rates<br />Variable – Bank of Canada<br />Fixed – Canadian Bond market<br />Bond Yield<br />Mortgage Rate<br />Expenses<br />Risk<br />Profit<br />
  6. 6. 10 Year Stats<br />3.00%<br />Average Prime Rate: 4.46%<br />Highest Prime: 7.25%<br />Lowest Prime: 2.25%<br />Average Fixed: 6.49%<br />Highest Fixed: 7.75%<br />Lowest Fixed: 5.19%<br />5.24%<br />
  7. 7. Where Are We Going?<br />UP<br />WHEN???<br />
  8. 8. Where Are We Going?<br />Variable – Overnight Index Swaps (OIS)<br />
  9. 9. Where Are We Going<br />Canadian 5 yr Bond Yields<br />
  10. 10. New Mortgage Rules<br />Reduced amortization to 30 years<br />Refinances up to 85%<br />CMHC no longer backing HELOCs<br />March 17th deadline<br />
  11. 11. New Mortgage Rules<br />Financial Ruin!<br />
  12. 12. New Mortgage Rules<br />Roughly 30% of mortgages last year had 35 yr amortization. Most were FTHB<br />TD estimates the amortization decrease will impact 20,000 sales<br />Amortization reduction will drop average affordability by 6-7%<br />Roughly 10% of mortgages currently refi above 85%<br />Current default rate of .42%<br />
  13. 13. New Mortgage Rules<br />
  14. 14. New Mortgage Rules<br />Default rate below .5%<br />CMHC Net Income $931M<br />71% of book is on loans with an LTV of less than 80%<br />9% return on securitization activity<br />
  15. 15. Who is Responsible?<br />
  16. 16.
  17. 17.
  18. 18. Thank You<br />Brad Compton<br />Invis Mortgage Agent<br />Twitter: bcomp123<br />www.YourLowMortgage.ca<br />
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