More Canadian Mortgage Fallout

The subprime mess and credit crunch are now affecting variable rate mortgages.

In many cases, investors can't (or aren't) differentiating between U.S. and Canadian mortgage-related investments.  Even though our real estate market is far stronger than the American market, these investors are demanding higher risk premiums all around.  That's pushing up Canadian variable rates--even for people with good credit.

Variable rates are typically priced at prime rate less a discount.  That discount has been as much as 1.01% below prime in recent months.  Now we're seeing some big lenders cut their discounts, to prime - 0.50%

If you need a variable rate mortgage in the next four months, we urge you to lock in your rate now!

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In a related story, many Canadian banks, non-bank lenders and mortgage brokers have been slashing staff lately.  A lot of good mortgage professionals are losing their jobs.  It's a growing concern for us in the industry because not only are choices dwindling for borrowers, but the job cuts mean that mortgage service is deteriorating as well.