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remarkto Feb 7, 2011 - Canadian Interest Rates by Brad Compton
 

remarkto Feb 7, 2011 - Canadian Interest Rates by Brad Compton

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    remarkto Feb 7, 2011 - Canadian Interest Rates by Brad Compton remarkto Feb 7, 2011 - Canadian Interest Rates by Brad Compton Presentation Transcript

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