Interest Rate Insurance Is Here.

Home owners with variable-rate mortgages can now protect themselves against rate rises, with the first interest rate insurance policy. The product covers people with a variable rate or tracker mortgage against interest rate rises, and starts paying out automatically once policyholders' mortgage rate rises above a set level. The insurer suggests 7.5 million people are on a variable rate mortgage, or are set to come to the end of their fixed rate deal from the risk of rising interest rates. Protecting a £100,000 mortgage against a rate rise above 1 per cent will cost £1,032 for a two-year policy, equivalent to £43 a month. If the base rate and the borrower's standard variable rate then go up by more than the insured amount, MarketGuard will cover the difference. The product is taken out on a two-year term, and it is fully portable if people switch home or lender. There are also no redemption penalties or exit fees.

Canada Cuts Interest Rates - Prime @4.75%

The Bank of Canada cut its interest rate by half a point to 3% whilst noting that further cuts might be necessary. The slowdown in the United States, which is Canada's largest trading partner, has begun to affect the Canadian economy. The cut reduces the bank's overnight rate — what big banks charge each other for overnight loans — to three per cent. The overnight rate hasn't been that low since December 2005. It was second time in as many months that new bank governor Mark Carney has moved aggressively on interest rates, bringing down the key overnight rate to three per cent, one-and-a-half points below where it was at the start of December. But in an unusual reaction, Canada’s chartered banks delayed for most of the day matching the central bank’s reduction, suggesting growing unease with the state of financial markets. The Toronto-Dominion Bank was first to act, after 6 p.m. AT, announcing a 50 basis rate cut to its prime lending rate to 4.75 per cent, followed by the other four big Canadian banks.

Laurentian Bank offers 5% cash rebate, lowers rates

Laurentian Bank has changed its mortgage rates offers 5% cash rebate. 5 year rate changed from 7.15% to 7.00%. New mortgage rates will be effective as of April 12, 2008. Laurentian Bank now also offers consumers cash rebates of up to 5% on their mortgage. The new product is fixed-rate mortgage with a cash rebate of up to 5% of the amount borrowed. Combined cash and rate rebates are also available.

Other rates have also dropped at Laurentian Bank. 1 year open lowered from 9.30% to 9.10% and 3 year from 7.20% to 7.00%. Contact your mortgage broker for more information.

Renegotiate Mortgage Rates

Renegotiating interest rates on a mortgage is one of several options available to property owners who want to keep their houses but have problems paying. It sounds simple, yet a lot of borrowers in trouble with mortgage payments never consider the possibility when it comes to renegotiating home loan rates. Most people consider refinancing their home mortgage to take advantage of lower interest rates and reduce their monthly mortgage payment. Refinancing a mortgage means paying off your old mortgage and signing a contract for a new loan. Whether to refinance your mortgage is a difficult question to answer. It might be possible to renegotiate your mortgage at a lower interest rate with your current lender, usually for a set fee. Renegotiating a mortgage is technically not refinancing, but it is an amendment to your existing mortgage. Although the interest rate may not be as low as the current refinancing rate, renegotiating can save you money because you pay no closing costs.

HSBC to match fixed-rate mortgages

HSBC has announced that it is making its new Rate Matcher mortgage available to all UK homeowners. But the new offer could see some customers paying as much as £5,000 in arrangement fees. At a time when rival lenders have been dropping their most competitive products amid funding concerns and a rapidly cooling housing market, HSBC's new deal initially sent shock waves through the mortgage market. There are an estimated 1.4 million mortgage holders who took out two-year deals during 2006 when rates were very low. Many have enjoyed mortgage deals with rates as low as 4.5 per cent, but now face a shock when they come to take out new loans, with the average two-year rate currently running at 6.29 per cent. HSBC, which is Britain's ninth-largest mortgage lender with 3.6% of the market, admitted that the upfront fees accompanying its matched deals would vary considerably, depending on the rate to be matched and the amount borrowed. For example, an existing rate of 4.54% on a £250,000 loan will only be matched if the borrower pays an upfront fee of £4,099. HSBC's new Rate Matcher offer opens on Monday and will run for five weeks. The bank said it had put in place three times its normal mortgage-servicing capacity.

Australian mortgage rates Up!

Continuing a damaging trend that has punched holes in homeowners' pockets, the National Australia Bank lifted its variable rates by a further 0.09 per cent on Tuesday. Westpac has announced it is increasing interest rates on home loans because of turmoil on global financial markets.The move comes just a few weeks after the bank lifted its standard variable rate by 0.3 per cent earlier this month, when the Reserve Bank of Australia (RBA) raised the official cash rate by 25 basis points to 7.25 per cent. That focus on advertised interest rates has led many home buyers to switch their mortgage to a fixed rate. Figures from banking analyst Cannex show almost 30 per cent of all owner-occupied home loans were fixed in January, compared with 17 per cent in December 2005.

Indian Banks cuts home loan interest rate by 0.25%

Public sector lender Allahabad Bank has decided to reduce interest rate on housing loans by 25 basis points for both floating and fixed term loans up to Rs 20 lakh aday after UCO Bank announced cut in home loan rate. Public sector banks seem to have paid heed to finance minister's P Chidambabram's exhortations earlier this month to reduce home loan rates. The 0.25% cut is effective April 1 on all fresh sanctions. The minimum interest for 5-year period will be 9.5 per cent per annum and maximum 10.5 per cent for 15-25 years in PLR-linked loans. The minimum interest on housing loan for five-year period will be 9.5 per cent per annum and maximum would be 10.50 per cent a year for a period of 15 to 25 years in PLR-linked loans. The bank is also approaching its Board for further reduction in Prime Lending Rate to make all PLR-linked loans more comfortable for its borrowers. This news wasn't enough to revive the share price on a day when bank stocks were slaughtered at the markets. Shares of Allahabad Bank closed 5.28 per cent down to Rs.76.25 on the Bombay Stock Exchange today.

US Federal Reserve Cuts Rates By 0.75%

The U.S. Federal Reserve Board cut interest rates by three-quarters of a percentage point Tuesday and left the door open to more cuts in the near future in efforts to ward off a recession or worse, But it was less than the full percentage point investors had come to expect. With today's move, the central bank has now lowered interest rates by a full three percentage points since September, bringing it to the lowest point since late 2004. It marked the second back-to-back cuts of three-fourths of a percentage point. The Fed's policy-making Federal Open Market Committee voted 8-2 to cut its short-term interest rate target to 2.25% from 3%, bringing cumulative declines in less than two months to two percentage points, the most rapid pace of easing in years. The Fed also on Tuesday lowered the discount rate it charges banks and brokers that borrow directly from the Fed by 0.75 percentage point to 2.5%, leaving the spread over fed funds at a quarter point. In the statement accompanying the decision, the Fed said that the outlook for economic activity has weakened further, consumer spending has slowed and labour markets have softened. Financial markets remain under considerable stress, and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.

U.S. mortgage rates rise. Again!

Rates on 30-year mortgages increased this week for the fourth time in the past five weeks. Freddie Mac, the mortgage company, reported Thursday that U.S. 30-year mortgage rates averaged 6.13 percent compared with 6.03 percent a week earlier, while 15-year mortgages rose to an average of 5.60 percent from 5.47 percent. One-year adjustable rate mortgages (ARM) also jumped to 5.14 percent in the week from 4.94 percent a week earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.58% for the week, up from last week's 5.34% average. The ARM averaged 5.90% a year ago. The mortgage rates do not include add-on fees known as points. For 30-year and 15-year mortgages, the nationwide average fee was 0.5 point, while five-year mortgages carried a 0.6 point average fee and one-year mortgages had a 0.7 point average.

real estate foreclosures, which shot up to a record high in the final quarter of last year, are expected to keep rising even with industry and government efforts under way to help people at risk of losing their homes.

UK Mortgage rates rising

Mortgage rates are on the rise, despite the Bank of England’s Monetary Policy Committee (MPC) putting the base rate on hold. Yesterday, Abbey, the UK’s second-largest mortgage lender, announced its second rate rise in eight days. The industry leader, Halifax, and Chelsea Building Society have also increased rates on some of their mortgages. Homeowners that will soon come to the end of their fixed-rate mortgages may be the worst affected. While some people may be able to switch mortgage products, those who are unable to do so may struggle in the current economic climate. Meanwhile the slide in house prices continues with figures from the Halifax showing that values dropped 0.3% in February, the fourth fall in six months. When taking out a mortgage for a new home, people should consider investing in a good self-storage system to protect their belongings.

Bank of Canada slices lending rate to 3.5 per cent

The Bank of Canada has cut its key overnight rate by half a percentage point to 3.5 per cent from four per cent. The last announcement on the rate came on Jan. 22 when the central bank cut the rate by a quarter-point, or 25 basis points. Around the world, the Bank of Canada sounded a gloomy warning on the U.S. economy by slashing its key rate by a half point, its biggest cut since 2001, and signaling more to come. The Bank of Canada reduced its overnight lending rate to 3.50 percent, bringing Canada's cumulative rate cuts since December to one percentage point and narrowing the gap with the U.S. Federal Reserve rate of 3 percent.

What does it mean for people with mortgage payment? Most banks are expected to drop their prime lending rates to 5.25%. The difference in the drop of half a point over let's say in a $100,000 mortgage, is about approximately $40 a month in interest saved — over the long term, several thousand dollars.

Bank of Canada cutting interest rate on Tuesday?

The Bank of Canada is one of five central banks that will be making a decision on interest rates this week. Most economists expect the target for the key overnight rate to be set at 3.75 per cent, down from 4 per cent. Some economists are predicting that the bank will cut rates by as much as 50 bps, which would be the strongest move by the Bank of Canada since 2001.

Bank of Canada cuts interest rates

The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 4 1/4 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 4 1/2 per cent. The Bank is likely to trim rates again in January, although the tone of today’s press release does not hint at a significant easing campaign. The Bank is still officially concerned about upside risks to inflation (given a very low jobless rate), but the credit squeeze and a possible U.S. recession are the dominant concerns now.

The Bank of Canada lowered interest rates yesterday, and took some pressure off the nervous borrowers and hard-pressed exporters and manufacturers feeling the sting of the soaring Canadian dollar. But the central bank also issued a dark forecast, raising concerns about weakening demand in the U.S. economy and continuing turmoil in global financial markets.

Canada's big banks followed suit, lowering their prime lending rate to 6 per cent, and adjusting some of their mortgage and GIC rates. Economists say this could be the first in a series of rate cuts meant to protect Canada's economy.

The Canadian dollar, which reached an all-time high in early November, lost more than one US cent after yesterday's announcement. The currency, known as the loonie, was trading at 98.5 US cents at mid-morning, down from its peak of $1.10.

Mortgage Rate Drops to 6.1%

Mortgage rates fell sharply this week with rates on 30-year mortgages dropping to the lowest level in more than two years. U.S. fixed-rate mortgages fell again according to Freddie Mac's survey released yesterday. 30-year mortgage rates dropped to an average of 6.10 percent this week, their lowest level since the week ended Oct. 13, 2005, when they averaged 6.03 percent. Analysts attributed the decline to increased worries that a severe slump in housing and a continuing credit crunch could drag the economy into a recession. The recent turbulence in stock markets has prompted many investors to rush to the safety of U.S. Treasury securities, driving down the yields on bonds. Fifteen-year mortgage rates declined to their lowest level in more than a year, falling to 5.73 percent from 5.83 percent last week. It was the lowest rate since the week ended Jan. 26, 2006, when the 15-year averaged 5.70 percent. For five-year adjustable-rate mortgages, rates edged down slightly to 5.86 percent, compared with 5.88 percent last week. Rates on one-year adjustable-rate mortgages edged up slightly to 5.43 percent, compared with 5.42 percent last week. The housing market has been suffering through a severe slump following five years of record sales. The weakness is expected to persist well into next year.

Interest rate cut coming to Canada

Canadian interest rates could be coming down sooner than previously expected, experts said yesterday following Bank of Canada governor David Dodge's suggestion that a change to monetary policy could come next month. Dodge hinted the Bank of Canada may cut interest rates while he was in South Africa for a meeting of the Bank for International Settlements, saying global financial turbulence will be prolonged and poses a risk that central bankers must take into account. He added that the Canadian dollar has moved outside any normal ranges that it had been in, and these are really going to contribute to additional pressures. The Canadian economy, in particular manufacturing, forestry and tourism has been pinched severely in recent months by the dollar's sharp rise. A .25% cut may not be enough to bring the value of Loonie down but it will certainly be a boost for already strong housing market. The bank may have to cut rates even further to see some results in the currency markets. Borrowers will have to wait until at least next month before they start seeing some interest rate relief, but savers are already being nicked by rate cuts, as at least one major Canadian bank on Friday reduced the rates it pays on all of its guaranteed investment savings certificates by as much as one-quarter of a percentage point.

The bank makes its next scheduled announcement on interest rates Dec. 4.

Mortgage rates holding steady

Mortgage rates held onto last week's substantial gains and 30-year fixed-rate loan remained at 6.73 percent for the week ending July 19. One-year adjustable rate mortgages averaged 5.72 percent this week, up from 5.71 percent last week. Last year, 1-year ARMs averaged 5.8 percent. June's housing starts unexpectedly rose to 1.47 million units, construction of one-unit houses still saw a decline of 0.2 percent: At 1.15 million units. The 15-year fixed-rate mortgage averaged 6.38% for the week ending Thursday, down just slightly from last week's 6.39%. The mortgage averaged 6.41% a year ago. To obtain the rates, the fixed-rate mortgages required payment of an average 0.4 point, while the ARMs required payment of an average 0.5 point.

Pre-arrange your mortgage

Fewer people are getting their mortgage pre-approved when buying a home for the first time according to a survey done by Canadian lenders. Survey shows that percentage of first-time home buyers who pre-arranged a mortgage has declined from 73 percent in 2001 to 62 percent today. This trend shows that almost half of first-time home buyers are not doing any planning for their mortgage. Home mortgage should be part of your overall financial plan or you could end up paying thousands of dollars extra to your lender. A pre-arranged mortgage gives you time to negotiate the terms and conditions of the mortgage other than the interest rate, And not to mention the protection against fluctuating interest rate for up to 120 days. Getting a mortgage pre-arranged doest not cost you anything. Talk to your mortgage broker to pre-qualify and shop for a home with confidence.

Indian mortgages get expensive

ICICI Bank Ltd., raised the benchmark interest rate on all floating-rate loans, including mortgages, by 1 percentage point to 12.75 percent, thanks to the Indian central bank's monetary policy. This move came on top of a similar increase in February, and a half-percentage-point one in December. Central bank is punishing homeowners with higher interest rates and the government is rewarding them with big tax exemptions. There seems to be no clear policy on this issue. With the Indian growing at 9% /yr the interest rate relief may not come to India for some time.

UK Mortgage rates could hit 8% this year

The unexpectedly large rise in inflation means the Bank of England is sure to push through more increase in interest rates in coming months - so variable mortgage rates could top 8%. For anyone that hadn't realised, inflation (the Consumer Price Index) rose to 3.1% this month. Bank of England is under pressure to bring inflation down quickly. As a result, the bank looks increasingly likely to raise interest rates in May. What's more, this may not be the last rise we see, with some economists predicting that the base rate could hit 6% (or higher) come the end of the year. Three Bank of England rate rises have been pushed through since August 2006 taking the base rate from 4.5 per cent to 5.25 per cent and adding around £750 to the annual cost of an average £100,000 variable rate mortgage. The last time mortgage rates nearing these levels was 15 years ago. Talk to your mortgage broker in UK about the options available to you so that you can save some money in the future. Or move to Canada where mortgage rates are still low and not expected to rise soon. Ha ha ha.

Canadians making bad mortgage choices?

RBC (Royal Bank) released it annual homebuyers survey few days ago. According to the survey many Canadians seem confused about the mortgage choices available to them, especially when they have to choose between a fixed rate mortgage and a variable rate mortgage. RBC's survey shows that most people will stick to the fixed rate mortgage products even when a "safe" variable rate mortgage is available that will save money. Majority of people find it difficult to choose between a fixed rate and a variable rate mortgage. The top reason for opting for a fixed rate mortgage is the preference for payments that don't change every month. Some 76% respondents believe that their mortgage payments will change each time the prime rate changes, even though its not true. Variable rate does not necessarily mean a variable payment each month. A mortgage broker can be a great help when it comes to understanding you mortgage needs. Ask your mortgage broker about the benefits of variable rate mortgage products.