Bank of Canada Announcement - Jan 22, 2014

Good morning As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. At 10:00 am EST, Wednesday January 22nd, 2014  the Bank of Canada again did what we expected them to do … they continued to maintain their overnight rate.   What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%.  This is fabulous news but don't forget to make the most of the low payments you still have, as the rate will increase in the future.  If you haven't done so already, give me a call and we can chat about helping you get set up with a great GIC, Tax Free Savings Account, or Retirement Savings Plan as your payments continue to remain low.    So did you, or someone you know, blow their budget over the holiday season and have started to get those dreaded credit card bills in and the reality is starting to sink in... let me help you get back on track with a review of your financial situation which might be a savings plan, credit counselling or debt consolidation to pay off high interest loans or credit cards.  If you would like to chat about some budgeting and saving strategies – let me know as I would be happy to assist. Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision today: "Inflation in Canada has moved further below the 2% target, owing largely to significant excess supply in the economy and heightened competition in the retail sector.  Global growth is expected to strengthen over the next two years with the US leading this acceleration, aided by diminishing fiscal drag, accommodative monetary policy and stronger household balance sheets. The improving U.S. outlook is affecting global bond, equity, and currency markets. Growth in other regions is evolving largely as projected.  In Canada, growth improved in the second half of 2013. However, there have been few signs of the anticipated rebalancing towards exports and business investment. Stronger U.S. demand, as well as the recent depreciation of the Canadian dollar, should help to boost exports and, in turn, business confidence and investment". Based on this news, the Bank still does not expect to increase their rate in the foreseeable future with any change most likely to occur late 2014 or even not until 2015!   Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won't see a large significant increase all at once. Fixed rates dropped just slightly since the last announcement to around 3.39% to 3.59% for a five year fixed term. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I'd recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now.  However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is March 5th, 2014 at which time I'll be in touch again. I wonder if I can ask a favour – this is a great time for first time home buyers who are thinking of purchasing in the Spring to start with a pre-approval plan now to get them on track and save unnecessary interest.  Also if you hear a friend or family member talk about going thru a financially tough time – maybe I can help with some budgeting and debt consolidation options for them.  In either of these cases, would you mind passing my contact information on to them – this is very much appreciated. Yours truly, Kupina Mortgage Team

How to Become Mortgage-Free Sooner

Paying your mortgage off the traditional way takes 25 to 40 years and costs about TWICE the purchase price of your home. Here are some effective ways to pay off your mortgage sooner, build equity faster and save thousands in interest.

• Change  your payments. Simply increasing  your payment frequency to bi-weekly or weekly costs nothing and can save  thousands of dollars over the life of your mortgage. If you can afford to pay a little extra, consider accelerated bi-weekly or weekly payments—these are equivalent to making one extra monthly payment per year which results in substantial savings. Or you can make a lump sum payment which can realize savings several times as great over the life of your mortgage.
• All-in-one mortgage. Instead of making extra payments, consider switching to a mortgage that pays off the      principal faster without costing you anything more. All-in-one mortgages  combine a line-of-credit mortgage with a chequing account to reduce interest costs and pay off your mortgage in as little as half the time, without      changing your spending habits. You deposit your pay into the all-in-one account and pay bills as you normally would. While you're not using your money, it's used to reduce your daily loan balance. Over the life of the      loan, this can save hundreds of thousands of dollars in interest!
• Merged account mortgage. If you'd rather not refinance your existing mortgage to switch to an all-in-one      mortgage, consider a merged account mortgage. This system uses your existing mortgage (any type of first mortgage will work), an advanced line-of-credit (ALOC), and specialized software that makes a connection      between your bank account, ALOC and mortgage. Each time you deposit income into your account, the software automatically generates an interest  cancellation on your mortgage. The result is that a 30-year mortgage can be paid off in about 8 to 11 years, with no change to your lifestyle or  refinancing of your existing mortgage.

To help decide which of these options is the best way for you to become mortgage-free sooner, call us today for a free analysis at 905.730.4782. Kupina Mortgage Team

Rate prediction for 2014: Can you survive payment shock?

As the US economy improves, it's becoming less necessary for central banks on both sides of the border to hold down interest rates. Long term fixed mortgage rates have been climbing for many months now. And as the economy continues to improve, it will eventually become necessary for the Bank of Canada rate to rise, which would have a direct impact on variable rate mortgages. Currently, the Bank rate is at 1%, but some economists predict it could start rising by late 2014 and reach as high as 2.25% by the end of 2015. Of course, even if mortgage rates rise by a couple of points, they're still very low historically. But what matters to mortgage holders is payment affordability if they're in a variable mortgage or they need to refinance. Depending on what your rate was when you first took out the mortgage, the new rate you'll be paying could be substantially higher. To see if you're at risk of payment shock, give me a call. I'll do a free analysis of your current mortgage to see how rising rates might impact you. If risks exist, we can discuss the possibility of refinancing now before rates rise further. Rest assured, I'll discuss all your options, offer affordable alternatives and help make sure your financial future is secure. Call me today. Mark Kupina | www.kupinamortgage.com  

The secret to attracting more health, wealth and happiness in 2014 and beyond

Like most people, you probably have lots of days when things go wrong and it's hard to feel grateful about what's happening in your life. But researchers are discovering that people who develop a consistent "attitude of gratitude" enjoy huge benefits. Expressing gratitude means always being aware of the good things that happen to you and never taking them for granted. The very act of being grateful puts you in a more positive mood, with more overall life satisfaction and happiness. In one study, participants who wrote down five things they felt grateful for, once a week for ten weeks, reported feeling less stress, and more optimism and contentment. When participants wrote gratitude letters to the significant people in their lives, they experienced greater joy and more meaningful relationships. An attitude of gratitude even promotes better health. Grateful people report fewer headaches, nausea, acne, anxiety, depression, and they spend more time exercising. The good news is that an attitude of gratitude can be cultivated. Here are some simple steps to help you feel more grateful so you can enjoy the many benefits:

• Express gratitude. Make a point of telling others how thankful you are to have them in your life, and mean it.
• Gratitude reminders. When you notice yourself feeling down about something, try to think of 4-5 related things you're grateful for. For example, if you're stressed at work, think of some things you like about your job.
• Strategic comparisons. Instead of feeling inadequate by comparing yourself to others who are more fortunate than you, compare yourself with those less fortunate and feel grateful.
• Journal. Every day, write down 3-5 things you feel grateful for. Not only does this help you focus on the abundance in your life, it gives you something uplifting to read when you're feeling low.

Make it a group ritual. Over dinner every evening, ask each family member to tell one thing that happened that day that they feel grateful for. Kupina Mortgage Team | www.kupinamortgage.com

Updated Interest Rates

SNAP-SHOT of my BEST RATES Principal Residence   QUICK CLOSES in 30 days or less & SPECIAL OFFERS (some conditions apply)   Fixed Term Specials 2.74% = 3 Year Fixed Term 3.39% = 5 Year Fixed Term (90 day rate hold) ***3.34% = Mortgage Over $300,000 -  5 Year Fixed Term Variable Term Specials 2.50% = Variable Closed is prime MINUS 0.50% (matures March 2017) 2.50% = Variable Closed is prime MINUS 0.50% (60 day rate hold) ***2.45% = Mortgage Over $300,000 -  Variable Closed is prime MINUS 0.55%   Other Mortgage Term Specials 100% FINANCING = 4.85% to 5.35% 5 Year Fixed Term with 5% cash back on closing   STANDARD MORTGAGES AND RATES   Variable Mortgages & Lines of Credit 2.70% = 3 Year Variable Closed is prime MINUS 0.30% 2.55% = 5 Year Variable Closed is prime MINUS 0.45% 3.50% = Line of Credit at Prime Plus 0.50% 3.80% = Variable 5 Year Open is prime plus 0.80%     * Prime rate is currently 3.00%   Fixed Term Mortgages (Four Month Rate Holds)   1 Year Fixed Term = 2.89% to 2.99% 2 Year Fixed Term = 2.79% to 2.99% 3 Year Fixed Term = 3.09% to 3.19% 4 Year Fixed Term = 3.34% to 3.39% 5 Year Fixed Term = 3.45% to 3.59%   Fixed Term Mortgages (SIX Month Rate Holds) 1 Year Fixed Term = 3.09% 2 Year Fixed Term = 3.14% 3 Year Fixed Term = 3.24% 4 Year Fixed Term = 3.49% 5 Year Fixed Term = 3.74%

Fixed Vs. Variable Mortgage: A Quick Comparison

Let's take a look deeper look at the age old question my clients ask...."So, Variable or Fixed?".  First, let's make some assumptions: 1) You can handle fluctuation in your mortgage payments and you will NOT loose sleep wondering if your rate will sky rocket because your parents keep telling you how they paid double digit interest rates in the 80's. 2) You qualify for a variable rate with acceptable debt-to-service ratios at the qualifying rate of 5.35%  3) Let's assume the Bank of Canada will start to raise the overnight rate by 0.25% in July and September of 2015, January and March of 2016, in July and September of 2017, and two more in July and September of 2018.

Here's a summary of how a $300,000 mortgage at a five-year fixed rate at 3.35% compares to a five-year variable rate at 2.45% (prime minus 0.55%):

A great strategy for variable-rate mortgage borrowers to set their monthly payment at the 5 year fixed rate payment amount. In this case, that would mean their initial monthly variable-rate payment of $1,336 would actually be $1,474. This would equal an extra payment of $138 per month going directly towards their mortgage principal. This allows you to get 'used to paying a higher rate' while enjoying the principal pay down. As the variable rate increases throughout the term, you simply adjust the $138 extra payment down so that your total monthly payment remains constant. Here is a summary of the effects when using this strategy on our comparison.

You will notice this strategy does not save you much in interest paid, however your balance after 5 years has lowered substantially...best of all you won't even notice the extra payment. Our assumption of the rate increases by the Bank of Canada may be considered aggressive - what if rates do not rise as fast as we assumed?. But, some may rightfully say that this small saving is not worth the risk inherent in the variable rate choice. Here's a great tool that I'd like to share. One of our lenders has prepare this Fixed vs Variable Comparison Calculator. Feel free to download and let the numbers speak for themselves. At the end of the day, you need to know what your risk tolerance is. We can only make an educated guess at what will happen to mortgage rates over the next 5 years.  We want you to be comfortable with your mortgage choice however in our comparison, today's variable rate would be the better option over the next five years … assuming that you can sleep at night. Mark Kupina  |  www.KupinaMortgage.com

Variable Rate Update

Good morning As you know, your variable rate mortgage, line of credit and/or student loans are all based on the Prime Rate and here is your personal update from me on the recent Bank of Canada announcement on changes to their Overnight Rate which in most cases impacts your Prime Rate. At 10:00 am EST, Wednesday December 4th, 2013, the Bank of Canada again did what we expected them to do … they continued to maintain their overnight rate.   What this means to you is that once again the prime rate on your mortgage, line of credit or student loan will not change and remains at 3.00%.  This is fabulous news but don't forget to make the most of the low payments you still have, as the rate will increase in the future.  If you haven't done so already, give me a call and we can chat about helping you get set up with a great GIC, Tax Free Savings Account, or Retirement Savings Plan as your payments continue to remain low.    The holiday season is upon us which often means our personal spending on gifts and celebrations will potentially blow our budgets as we spend more than we maybe should… let me help you get back on track with a review of your financial situation which might be a savings plan, purchasing an income property or debt consolidation to pay off high interest loans or credit cards.  If you would like to chat about some budgeting and saving strategies – let me know as I would be happy to assist. Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision: "The global economy is expanding at a modest rate, as the Bank expected. Although growth in several emerging markets has continued to ease, growth in the United States during the third quarter of 2013 was stronger than forecast. Even if some of this pickup was due to temporary factors, the data are consistent with the Bank's view of gathering momentum in the U.S. economy.  In Canada, the housing sector has been stronger than expected but is consistent with updated demographic data and a pulling forward of home purchases in light of favourable financing conditions. The Bank continues to expect a soft landing in the housing market. Non-commodity exports continue to disappoint and the price of oil produced in Canada has eased further. Business investment spending is up from previous low levels, but is still recovering more slowly than anticipated. On balance, the Bank sees no reason to adjust its expectation of a gradual return to full production capacity around the end of 2015".  Based on this news and continued slower level of economic activity in Canada, the Bank does not expect to increase their rate in the foreseeable future with any change most likely to occur late 2014 or even not until 2015!   Remember, that any increase to the prime rate since 1992 has only been by 0.25% at any ONE time, so you won't see a large significant increase all at once. Fixed rates did go up but then have gone down a bit since at around 3.49 to 3.69% for a five year fixed term. Based on this recent announcement, and the anticipation that the prime rate will still remain low for a while now, unless you feel otherwise, I'd recommend that you remain with your current variable rate product as the interest is lower than a fixed term rate right now.  However, if having a fixed payment is important to you, call me so I can calculate what your new payment would look like and also if it is suitable for you. The next announcement on any change to the prime rate is January 22^nd, 2014 at which time I'll be in touch again. I wonder if I can ask a favour – this is a great time for first time home buyers who are thinking of purchasing in the New Year to start with a pre-approval plan now to get them on track and save unnecessary interest.  Also if you hear a friend or family member talk about going thru a financially tough time – maybe I can help with some budgeting and debt consolidation options for them.  In either of these cases, would you mind passing my contact information on to them – this is very much appreciated. Yours truly, Mark Kupina  |  www.kupinamortgage.com