4 Mortgage Predictions for 2016: Abbotsford & Chilliwack Mortgages Holders

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Predictions are fun to read but tough to get right.  For example for the last 6 years I have heard predictions that rates will be going up “next year”.  Some of these predictions were made by men with more letters behind their name then myself.  I just goes to show that even the most educated have troubles getting it right.

With that being said I thought I would give it a try.  Here is a few I would like to prognosticate.
  • 1 – The Big Fix – The banks will not drop their prime rate in accordance with the recent 25bps discount they were given off the key lending rate from the government..
I see the banks keeping the prime rate at 3% but they will lower the discount they give off the prime rate (IE Prime – .70%= 2.30%).  I could see them lowering the discount they offer of prime from 10 – 20bps, which would enable them to pocket some of the savings.
This will do three things. First it will drive more new business into them as the perception will be that they will be doing a favor to the public but effectively they will not be passing the full 25bps discount they received from the government.
Second they will not have to pass on the 25bps discount to their current book of clients with mortgages based on prime which will increase their profit.
Third it will generate more income from pre-payment penalties as it will make s for current clients to break their term to take advantage of the further discount.
  • 2 – The spring rate war is coming again –  Just like the last few years BMO will advertise a low 5 year fixed which other banks will follow.  We will see a newspaper article stating that this is the lowest rate ever offered to the Canadian public for the yet another year in a row.
Even though this in the newspapers will be a good rate offered by BMO, it will not be the best rate in the market. For the best rate call a mortgage broker like myself.
  • 3 – Rules are a Changing – We have been told time and time again we have too much debt.  There is a perception out their in government that these low rates are not going to cause the general public to borrow too much money.  I see the government putting in further restrictions on mortgage products in Canada.
Its rare to hear from my clients that their mortgage is the cause of their financial pain.  It is the credit cards, lines of credits and auto loans they have obtained that they having problems keeping up with.
I think its time for the government to make it harder to obtain these facilities of credit just like they have done to the mortgage market.
  • 4 – Prediction of all Predictions! – By the end of the year you will hear from a so called expert that rates will be going up in 2016.  Eventually they will have to be right…just do not be so quick to believe them!
While all of these might not come true, it was fun to write a piece like this.  I hope you enjoy!

By Referral Mortgage Consultants*

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 1 – 32540 Logan Ave
Mission BCV2V 6G3

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AbbotsfordBCV2S 6S2

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8387 Young Rd

ChilliwackBCV2P 4N8

Dave  604 897 2741 Jordi 604 615 1312
www.AbbotsfordsMortgageBroker.com

 

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*By Referral Mortgage Consultants – doing business as BRMC is: Verico Preferred Financing Inc / Verico Canadian 1st Mortgage Corp which have a co-brokering agreement and there is a common Mortgage relationship and are licensed with the Verico Dreyer Group. Mortgage ownership, that employees of both Mortgage companies may review, advise and help process the Mortgage files. That Verico Preferred Financing Inc & Verico Canadian 1st Mortgage Corp share the some expense and income from mortgages. Kim Langille Featured on thess site is an unlicensed mortgage assistant only, not a Mortgage Consultant. Jordi Browne featured on this site is the Mortgage Broker of record. “The Broker” is Jordi Browne. Jordi Browne also holds a Life Insurance License and represents Verico Canadian 1st Mortgage Corp. Dave Browne featured on this site has a Life Insurance License too but is an independent agent– Jordi and Dave Browne co-broker life insurance files and share expenses, all income retained by Verico Canadian 1st Mortgage Corp. 

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