The housing market is looking fairly good right now. Sales are on the rise, thanks, at least in part, to ridiculously low mortgage rates. An article last week in the Financial Post discussed a survey by Royal LePage Real Estate Services Ltd, who sampled their agents to find out if they felt the current housing trend would continue. 61% of those surveyed felt it would, 28% did not and another 11% were undecided.

Mortgage rates are almost certainly a contributing factor in the housing market. We Canadians are drawn to low rates the way young children are drawn to candy. We see it and it makes us drool.

According to Statistics Canada, new home and resale home markets are up for the month of July. With the major banks and mortgage companies competing heavily for mortgage dollars, it’s not surprising those in the real estate industry are crediting low mortgage rates.

There is no definitive data regarding the impact of the home renovation credit on housing purchases, but it certainly stands to reason that members of the do-it-yourself crowd were spurred into action before the opportunity expires. You can barely pass a street corner without seeing the home renovation tax credit in a marketing campaign. Everyone from government, to hardware stores, to banks is urging Canadians to take advantage of the tax savings – now!

So, will the trend continue? The water-cooler chatter bugs across the nation are in an escalating debate over the answer. Yes, everybody’s got an opinion. Mortgage rates should stay low, with Bank of Canada promising to keep the Key Rate at 0.25% at least until June 2010. Then again, banks need to earn a profit too, so rates might creep up anyway.

Once the tax credit expires, less people will be interested in buying fixer uppers. Then again, a successful tax credit initiative for homeowners might mean it continues for at least another year. The points of dispute are endless, and what it comes down to is, nobody can really say for certain what is going to happen. The best we can do is deal with what we know today. Right now.

What we know right now is this: if you’re thinking of buying a home, you will get a fabulous mortgage rate. If you wish you had taken advantage of the below prime variable rates on mortgages, stop kicking yourself. Deal with right now, which has variable rates pretty close to prime.

What else do we know right now? We know it’s a great time to buy a house or condo. Prices are affordable on resales, pre-construction and new builds. Buyers are the current power of the market, after years of being at the mercy of the seller. If you’ve been watching the listings and witnessed some red hot deals pass you by, now is the time to jump on the bandwagon and make an offer on the next great buy you see. Save the tales about the one that got away for fishing.

When everything in the market is working to your benefit, you owe it to yourself to take advantage of the opportunities. You can argue and speculate about how long the current mortgage rates will remain this low, but one thing is agreed upon unanimously: sooner or later mortgage rates will definitely go up.

If you are like most retired adults, you own a home but have very little else for retirement. However, if you sell your house, you won’t have a place to live! So here’s your problem: you need money to live on, but the only thing that you own of value is the place you live.

A reverse mortgage can give you the answer this retirement dilemma. This option sells your house a piece at a time, instead of all at once. Also, you get to live in your home. You can use a mortgage calculator to determine the monthly cost of home equity loans or refinancing. Also, you can use this mortgage calculator to figure out how much your loan would cost you in total.

First, call a real estate agent. They will be more than happy to tell you how much your home would sell for, and how to increase its value. Depending on your level of savvy and the time you could commit to it, this could pay off handsomely. The reason is that the amount that a reverse mortgage will pay you is based on your home’s value. So, if there is an easy way to increase the value of your home, do it before applying for a reverse mortgage.

You can use a mortgage calculator to find out if you should get a home equity loan before you get your reverse mortgage. The mortgage calculator will tell you how much, in total, a home equity loan would cost you for the short time between the repairs and the reverse mortgage. But be careful. Don’t spend more remodeling than it will increase your home’s value. Also, if you love something about your house, don’t change it. After all, you still get to live in it.

Okay, now that you know how much your house would sell for, it is time to look into a reverse mortgage loan. You can use a special mortgage calculator to find out how much each different loan would give you. This mortgage calculator bases its results on four things: your age, your house’s value, your house’s location and your lender. More than one company offers a mortgage calculator, so it is best to check with AARP to see if it is a valid program. The mortgage calculator on their website is very simple, but it is a good place to start.

But why is it called a loan? Because, when you are done with the house, the lender wants money, not the house. Of course, if the house sells for more than you were paid, your heirs may get some of it. This is a detail you should work out when you get the loan. Again, there are mortgage calculator programs to help you figure this out. If you still have a loan on your property, you will have to pay it off before you get your money.

Once you have done your own research, it is time to talk to a professional. The real estate agent that you spoke to before should be glad to give you a list of good lenders and mortgage brokers. They will walk you through the process. Read every document. Ask questions about anything that you don’t understand. And soon, instead of paying a mortgage every month, you will be able to receive a check instead.

Real estate has been an outstanding investment in most parts of Canada in the past few years. Home valuations are continuing to rise and have broken through the peak of their 1989 “bubble” in many areas of the country. That’s good news for Canada’s 7.5 million home owners, who are enjoying an average increase of $43,000 in real estate wealth since the upward trend took hold in 1998.

The hot housing market is being fuelled by mortgage rates which are the lowest they’ve been in almost 50 years. First-time home buyers are finding the rates attractive, and home buyers are lining up to purchase their first home or to upgrade to their dream homes. Housing statistics have been capturing headlines for months and the boom is noticeable on key economic indicators.

But the news isn’t just about rising valuations or Canadians moving into their new homes. Quietly in the background, there is a significant trend to refinancing. Canadians who have built up the equity in their home over the last few years are borrowing against that equity in record numbers. According to a report from a major bank, since 2001, Canadian households have taken out approximately $20 billion in cash out of their homes through mortgage refinancing and home equity loans.

We might thank the Ontario mortgage industry for the surprising resilience of the North American economy. In the past two years, the North American economy has endured numerous economic fallouts but consumer confidence remains reasonably strong – at least partly because homeowners have seen some of their losses offset by an increase in their real estate wealth. We find that we are sitting on (and sleeping in) the best-performing investment we own. And even if they have no plans to sell, homeowners have found that the return on their investment is still as good as cash in the bank.

That cash has been a key economic stimulus both here and in the U.S., where the trend is even more pronounced. As Canadians look beyond the view of a home as primarily shelter, mortgages become a valuable resource – and homeowners aren’t necessarily waiting for renewal time to cash out some of their gains.

So where is the money going? The equity being pulled out is often being used to pay down other more expensive debt. Credit card interest rates are shockingly high and – as a nation – our credit card and other consumer debt is continuing to grow. And much of the money is being used for increased spending. There has never been a better time to borrow against home equity to build the kitchen of your dreams, add a new wing, embark on the landscaping project you’ve wanted for years, enjoy the vacation you’ve always dreamed of, or help with the high cost of post secondary education. However, as always, never let your enthusiasm for the opportunity to spend get in the way of good common sense about debt management.

Next to critiquing the decorating taste of your home’s previous owner, playing the “adjustable mortgage game” may rank as one of the most popular (and least pleasant) pastimes of Canadian homebuyers.

Here’s how it works.

As you’re exploring your mortgage options, you review the long and steady slide of mortgage rates in Canada over the last decade and make the decision to go with an adjustable mortgage when you buy, at renewal or when refinancing. You’re now a player. Then you watch for clues about mortgage rate movement, trying to guess the perfect moment to lock in your mortgage. The objective of the game is to try to guess the bottom… and you won’t know it’s the bottom until it’s too late. In today’s low rate environment, we should acknowledge that most of the players are already winners; but it can still be a stress-inducing game.

One way to remove all of the guesswork is to consider a capped-rate adjustable mortgage, although there are only a few options available in the marketplace.

There is a unique adjustable mortgage that is not based on the Canadian Prime Rate (the usual benchmark) – but on what is known as the Banker’s Acceptance rate: a benchmark that is used for professional money managers. In effect, the BA rate, as its known, is the rate lenders charge one another.

Not surprisingly, it’s typically much lower than prime. In fact, the effective rate of this adjustable mortgage has been consistently lower than competitive variable or adjustable rate products based on Prime. A capped version is now available.

An adjustable rate mortgage with a cap offers unlimited downside rate movement, but also provides a guarantee that the rate will never rise more than a certain percentage higher than the starting base rate – no matter what happens to the lending rates.

The rate cap takes the guesswork out of the adjustable mortgage game. If rates continue to drop, your Mortgage rate also drops accordingly. But if rates begin to rise, you know that your own mortgage rate has a fixed ceiling. Imagine, no more worrying about when to lock in your mortgage, and no more second-guessing your decisions when rates go back down again. Of course, this kind of flexibility comes at a small premium over a regular adjustable-rate mortgage.

In the past several years, more and more Canadians have passed on the security of traditional fixed-rate mortgages for the savings potential of an adjustable rate. And in an environment of dropping rates, the adjustable rate choice has proven its value to homebuyers. With today’s rates among the lowest in memory, many homeowners continue to worry about whether or not they should lock in or not. After all, we don’t want to lose the flexibility of having our rate adjustable downward… but we’d also like to have it fixed upward.

If we had a crystal ball, we could make perfect decisions about our mortgage options, and we’d know how to secure the best rate. But a mortgage that passes on declining rates and has a rate cap on the upside can be the next best thing to seeing into the future. And the result is an adjustable mortgage game that the homebuyer is heavily favoured to win.

Everybody is aware that the Canadian mortgages became increasingly complex as we advance in the 21st century. Everything is different, from the product to the new technologies developed on the market. But the Banks of Canada keep their position unchanged, being the most important decisional factor when it comes to the mortgage system.

Variable Rate Mortgage In Canada

The Variable-Rate Mortgage is offered at the prime rate less 0.25%, so you benefit from a discount. It is also adjusted monthly. You can choose the fixed payment system or the variable payment. The difference between them is that the fixed payment is based on the rate for the minimum 5-year term in effect when the loan is opened, while the variable payment is adjusted monthly in relation to interest rate movements.

Fixed Rate Mortgage In Canada

With this conventional mortgage type you can use to finance up to 75% of the value of the mortgaged property. Due to the high flexibility of the system, you are free to choose different amortization periods and terms.

Capped Rate Mortgage In Canada

This system offers you a lower and short-term rate combined with long-term security. Although the applicable interest rate is somehow variable and adjusted in every month according to the prime rates, if rates are up at the time of the next adjustment, so you will never pay more than your initial capped rate. The maximal rate is determined according to the 5-year term established, so you always benefit from the best rate: the prime rate or the capped rate. You can choose from the fixed and variable payment, as mentioned above.

Money Saver Mortgage In Canada

These mortgages are being used especially when the priority has been given to the lower rate mortgages. To be more exact, let’s assume that a 5-year term loan has been assigned, with a variable interest rate based on the 3-month term rate reduced of 0,35 %. In this case, the mortgage rates and payments will be adjusted every three months according to the fluctuations of the rate in effect.

The responsible factor for the housing industry in Canada is the Canada Mortgage and Housing Corporation (CMHC). This Government agency ensures low cost mortgages for Canadians and insurances for the house lenders, as a safety measure. A proof that this corporation know what it’s doing are the statistics: since 1954, one in three Canadians asked for its help.