Hey everyone! How have your Augusts been treating you? As well as mine, I hope!
It’s been a long time since my last post, but it’s been a busy month for me and my team at Dawson Creek Mortgage. Not only have I been helping a record number of people get their perfect mortgage this month, but I’m also right in the middle of opening up a new office in downtown Dawson Creek! This is a huge and exciting moment for me, but the reality is that I would never have been able to do this without the support of my partners, clients, and readers like you. Any success a mortgage broker has is due entirely to the trust of the community they service, and I like to think that my new office is a direct reflection of the trust my Northern BC community has placed in me. If it weren’t for all of you this never could have happened, and I hope to pay you back by finding your perfect mortgages for years to come. Remember, my phone is always on. Whatever you need help with, whenever you need help with it, I’m more than happy to take your call. That’s my pledge to this town – and this province – that’s given me so much.
Now, with all that out of the way, I’m about a month overdue with a Canadian mortgage industry update. Last time I posted, the Bank of Canada had just cut its overnight lending rate by 25 basis points – for the second time since January. While that was a pretty big deal in and of itself, the even bigger side of the story was the Big 6 Banks’ response to that cut: they dropped their interest rates by just 10 basis points, a far cry from the traditional 1:1 match that earned the overnight lending rate the moniker of “key policy rate.” The simple truth is that if the banks don’t match that policy rate, then it ceases to have an impact on Canadian consumers, and ends up accomplishing nothing but keeping more money in the banks’ coffers. That’s why there was so much outrage the first time they pulled this trick in January, and why there was just as much outrage a month ago.
In fairness to the banks (not that it matters, since they don’t seem to understand the concept), the Big 6 have all dropped their interest rates by a total of 15 basis points since I wrote my last post, which is exactly the amount they managed in January. While that’s slightly better than their initial drop of 10 points (0.05% better, to be exact), it’s still a slap in the face to Canadian consumers, who are now paying an interest rate 20 basis points higher than the banks. The difference, obviously, ends up as pure profit for the banks, and that should be an outrage to anyone looking to borrow money from the Big 6.
The good news is that borrowing money from the banks is not your only option, and when it comes to looking for a mortgage there are a ton of other lenders you can consider. My entire job is to stay on top of that sort of thing, and to match your particular mortgage needs with the lender that best meets them. If you’re tired of the same Big 6 options, give me a call – I can give you over 30 more. And again – in most cases I’m paid directly by those lenders, so exploring your options is not only shrewd consumerism but completely free to boot. You have absolutely nothing to lose by asking for my help, and potentially everything to gain – especially in the current economic climate.
To end things on a positive note, I’d like to point out that Canada’s housing market is doing pretty well right now. If you’ve been worried about falling oil prices, have a look at this quote from RBC’s latest Monthly Housing Market Update (I may take issue with their interest rates, but that doesn’t mean they don’t have smart economists on their payroll): “The resumption of an upward sales trend in some oil sensitive regions… is encouraging with a jump in new listings in these regions also pointing to some stabilization in these markets.”
So with that, enjoy the rest of your summer! Next time you hear from me I’ll be in a brand new office in downtown Dawson Creek!
Lori Lalonde, Your Northern BC Mortgage Broker