Financial advice for mortgage rates

Woodrow pointed out this excellent article over at on how to get a good deal with these new high interest rates. Here are a couple of gems:

The easiest thing to do is to put down a larger down payment, which will help you pay less interest over the life of your mortgage — or make payments weekly or bi-weekly.

Well that’s easy! Just put down more money! But what if the credit card companies won’t let me take out another cash advance? Do you have any other advice on how to save money on a mortgage, perhaps in a jumbled form?

Bank of Montreal’s Carolyn Heaney says within in the next couple of years we’ll see more increases in the prime lending rate, so people may want to consider a fixed rate mortgage. “Let’s say we take an average 30 year and reduce it to 25, how much interest can we potentially save off on a $200,000 mortgage? The answer to that is roughly around $53,000.”

Heaney explains another thing people can do is cut their amortization by five years, from 30 to 25. She says potential homeowners can save over $50,000 on a $200,000 mortgage.

..Perhaps we’re all just too busy flipping condos to edit the news?

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Jeff Says:

June 7th, 2010 at 7:32 pm

Does $5,000 on an overpriced listing really matter? I don’t think these price changes are all that material.

You'd be right if the ratio of price changes remained somewhat consistent over time. Turns out they don't.


geez…i wish i had been tripled-leveraged into an investment that tracked GVRD inventory starting 3 months ago…



Colours are yellowy-brown, cork floor, melamine countertop, exterior balcony walkways keep light from getting in the unit….We saw the 2 bedroom unit: $1902/month. I think that is a pretty good estimate of the market. A bit higher than what you’d get outside OV but a bit less than you’d expect for the OV because no views at all, kinda dark

1 Kingsway had 1 bedrooms for 1200 and 2 beds for 1600. Six blocks farther from the water but quite a bit nicer from the sounds of it.


From Larry's blog:

BCREA Housing Forecast (PDF)

Residential units sales through the Multiple Listing Service® (MLS®) in BC are forecast to ease back 3 per cent to 82,350 units in 2010, before climbing 4 per cent to 85,900 units in 2011. Waning pent-up demand, upward pressure on mortgage interest rates and tighter lending qualifications for low equity home buyers will moderate consumer demand this year, particularly on the South Coast.

Improving economic conditions, however, are expected to counterbalance some of the erosion in affordability caused by higher mortgage interest rates and tighter lending.

BCREA's idea of "fundamental analysis" is to look at employment and GDP to gauge future price movements and sales volumes. Good luck with that.


@VHB: 2008 saw prices drop faster than any North American city. That June '10 is stronger than June '08 means that prices drop but maybe only as fast as San Diego or Phoenix. Those are some mighty large drips.


@realpaul: Insolvency is when you can no longer pay your bills, ie can't service debt. You may have a liquidity problem with such a high debt ratio, but not necessarily a solvency problem. You can remedy illiquidity with borrowing to carry you through until you have liquidated some assets, but not insolvency.


Daily averages for June:

year sales list

2008 119 315

2009 195 232

2010 151 293

Source is unofficial numbers posted by paulb, so this is a rough indicator of how things are going.

We need to start stacking up these sub-100 sales days if there is going to be any big movements. Otherwise it will be drip drip drip.

Run Buddy Run

@Anonymous: Most of time month end expired listing bounce back in the first week of month,In respect to those costumes the Agent's chart sees no rush of listing.However,The sales list ratio is higher than all the previous week in the chart.higher sell list ratio always point to higer prices, based on the last month's performance prices seems to be holding up and are in full form to go upward. if sell list ratio stay above 45% it will keep the prices up.This is a second week of the month so whatever listings are coming to market are actually falling short of expectations thus far listings are on verge to collapse quickly.


@Jeff: A price change DOWN of even $5000.00 will cause most potential buyers to wait for ANOTHER ONE. They will either think the seller is fishing, and automatically assume that the new lower price is also way over market, or they will assume the seller is antsy due to LACK OF INTEREST. Either way it is a very bearish sign.

Run Buddy Run

@House buyer:There is a key to raise the price tag in your comment.Where wiseman does not even sneak through their calculators of fundamental values,All the small developers are buying old over old house on single lot or potential to generate duplex.It's easy for them to make over $200,000 on single lot and $400,000. on duplex.How a crash can take place? While there are four families being hooked up in duplex,Those families are watching live events in high definition.I think the story does not even end here because buying old house and making new is small developers permanent job.While they are geting rich step by step, they will countinue to take over any oppertunity, even if they have to tore down 5 to 10 year old house they will do it,There is a guranteed profit after all and the key of… Read more »


@domus: "However I would like to see the inventory growing a bit faster than the past 2 weeks: do you guys have a sense of why there was such a slowdown in inventory growth?" Take a look at agentwills weekly-stats. The first chart (one year snapshot) is pretty much enough to tell part of the story as to why the inventory is slowing down. At the beginning of the year, you can see about 6,000 units for sale, and then it skyrockets over the next few months up to 14,000ish. I believe most realtors suggest that a property be removed after 6 months on inventory, so look at the end of the green line and you will notice that it is climbing. Then look at the Weekly Removed Units chart, and you will notice that the trend is up. My… Read more »


From a victoria real estate blog:

"Here are last month's numbers for Port Alberni/Tofino:

SFH: 17 sales/311 actives

Condo/Townhouse: 4 sales/79 actives"

I hope it will get this bad here. 5% sale-to-list, can you image


oh yeaah nutslaps! low and high end product on lunch break before next leg up! saddle up hellocopter BEN!

go red below if desperete for land making machine!

paulb fan

Another anecdotal from a party tonight: a lady was cribbing about her neighbor who has panicked and put his condo on sale for 60K less than hers. "This is totally unacceptable, it is worth much more" – was her exact remarks. She was upset at his stupidity. I just kinda agreed with her so that she keeps me posted of other stupidities of her neighbors and friends.


@Superfly: Really? I noticed that about listings….


I've noticed that Monday sales numbers are often low. It takes a few days for the weekend sales to be posted.


The high number of price changes show that sellers are admitting their places are no longer worth what they were (if they priced to market at the time).

It is now a race between sellers to see who can adjust their prices to market conditions.

The sellers who do not reduce for 6 months and are greedy will pay a massive price.


Does $5,000 on an overpriced listing really matter? I don't think these price changes are all that material.

Canadian Saver

@Best place on meth:

"Kraft Dinner pairs well with Sunny Delight"

Very funny. So true!

Peter Pan

Actually, the funniest part isn't covered in the article, but was featured in the radio report… The same teller said that year over year in May prices were up 20% and prices SHOULD CONTINUE WITH THAT TREND… No word of a lie… Stuff like that is dangerous when you're listening to the radio in your car and driving.


@ PaulB. thanks v. much for your daily numbers – checking them is now regular part of my routine.

Could you explain why total inventory number is not keeping pace with net listings over sales? For instance, last Friday @ 5:24 you posted total inventory as 18,500. Today @ 4:31 you posted: List = 263; Sales = 82 (i.e. net increase = 181) yet total inventory = 18,595 (i.e increase of only 95 over Friday’s #). Is the difference accounted for by continued expiries of the listings? Thanks


@realpaul: Why is idea of death panels nuts? They've been doing it in the UK for years through the bizarrely named decision panel called NICE. When I lived in London one of my colleagues with MS was denied the leading treatment because it was deemed to be not cost-effective, so he went to the US. This story is about Alberta, where doctors are forced to abandon prolonging the life of certain patients. But is there any question that a province like Ontario — with a some $25 billion deficit and 47% of spending on health care — will have to pursue the same sort of policies down the road? We talk about the housing crash with a fair bit of glee around here, and while there's nothing wrong with that, I think the effects on the economy and services in… Read more »




New Listings 284

Price Changes 246

Sold Listings 96

But no trifecta today. Killer ratios!


Can't Sell? Raise Price By $300K!

Contrarian Sellers Playing Hard To Get




By that definition, Fort McMurray is the most “world class” city in Canada.

Face it, the term is completely subjective.

Good point.