Top 5 take aways from the BOC decision today

General Angela Calla 17 Jul

Top 5 takeaways from the Bank of Canada’s decision

John Shmuel  Jul 17, 2012 – 10:40 AM ET | Last Updated: Jul 17, 2012 11:15 AM ET

Christinne Muschi/Reuters

The Bank of Canada cut its economic growth forecast for this year and next in its interest rate decision Tuesday. Above, Bank Governor Mark Carney addresses the International Economic Forum of the Americas.

The Bank of Canada turned slightly more dovish Tuesday as it trimmed its growth outlook for Canada and warned that the global economic situation had weakened.

In an expected move, Governer Mark Carney and his team left the bank’s overnight lending rate unchanged at 1%. It has remained at the near-historic low since September 2010.

But the bank continued to retreat from some of the more hawkish language it hinted at in previous statements in April and June.

“This is a substantially more dovish statement,” said Derek Holt, economist with Scotia Capital.


Below, we outline the top five takeaways from the bank’s July 17 statement.

Global growth prospects have weakened

In its April outlook, the Bank of Canada said that it was seeing signs of improvement in the global economy. That is no longer the case.

“Global growth prospects have weakened since the Bank’s April Monetary Policy Report,” the bank said.

It said that developments in Europe point to a renewed contraction, while emerging market countries such as China have seen their growth slow “greater than anticipated.”

The bank also warned that global financial conditions have deteriorated since its April report.

Despite the gloomy outlook, however, the bank said it still assumes the eurozone crisis will be contained.

Canada’s economic outlook cut this year and next

Canada won’t be spared from a slowing global economy. The Bank of Canada trimmed its forecast for economic growth in 2012 to 2.1% from its earlier 2.4% target.

It also sees slightly weaker growth in 2013, lowering its outlook to 2.3% from 2.4%.

“While global headwinds are restraining Canadian economic activity, domestic factors are expected to support moderate growth in Canada,” the bank said.

There are risks, however. The bank expects consumption and business investment to be the main growth drivers, but record household debt and slowing housing activity could negatively impact that growth.

On the upside, the bank does view a rebound in growth occuring in 2014, saying the economy will grow by 2.5% for that year.

Housing to cool

This marks the first interest rate announcement since Finance Minister Jim Flaherty announced new mortgage rules in Canada that, among other things, lower the maximum amortization period to 25 years.

“Housing activity is expected to slow from record levels,” the bank said.

June data already reveals some cooling in home sales following the introduction of the new mortgage rules. Existing home sales dropped 1.3% in June from the month before and were down 4.4% from the year before

“The Bank of Canada will likely want to see the impact these new rules have on domestic spending before lifting rates,” said Diana Petramala, economist with TD Economics.

Output gap to close in latter half of 2013

In another sign that the bank sees global headwinds slowing Canada’s economy, it said that it now expects the country’s output gap to remain until 2013. The output gap is the spare economic capacity of a country (e.g. the difference between the actual capacity and what it could achieve at its most efficient, productive level).

The bank had previously expected the output gap to close in the first half of 2013.

“This is consistent with guidance we’ve been consistently providing on how the BoC has been underestimating spare capacity in the Canadian economy partly via over-estimating 2012 growth prospects,” Mr. Holt of Scotia Capital said.

Bank eyeing lower commodity prices

Concerns over lower commodity prices have crept into the bank’s latest statement.

In April, the bank warned about the effects of high commodity prices on economic momentum. Now the bank expects the recent pullback in prices to keep inflation below its 2% target until mid-2013.

“Given the recent drop in gasoline prices and with futures prices suggesting persistently lower oil prices, the Bank expects total CPI inflation to remain noticeably below the 2 per cent target over the coming year,” the bank said.

Questions on optimizing your mortgage with todays low rates?

Contact Angela Calla Mortgage Team 604-802-3983

Deal of the week in #newwestminster @cknw @angelacalla@willingtwo

General Angela Calla 13 Jul

As heard on this weeks Mortgage Show on CKNW with Angela Calla. To get pre approved for this property or any other purchase email us at or call 604-802-3983

This weeks deal of the week has been brought to you by:

New Westminster at it’s best 

Robert Boies
Royal LePage Coronation West
cell: 604 341 3009 t: willingtwo

Please note that properties like this move quickly and getting set up with Rob Boies directly will keep you abreast of all of these types of oppertunities meeting your speciafications

Thanks for visiting

Angela Calla, AMP

Deals of the week as heard on @cknw @angelacalla from @willingtwo #vancouver #portcoquitlam

General Angela Calla 6 Jul

As heard on this weeks Mortgage Show on CKNW with Angela Calla Saturday July 7th 2012. To get pre approved for this property or any other purchase email us at or call 604-802-3983

This weeks deal of the week has been brought to you by:

Vancouver $40 a day

Port Coquitlam $22 a day (forclosure)

Robert Boies
Royal LePage Coronation West
cell: 604 341 3009 t: willingtwo

Please note that properties like this move quickly and getting set up with Rob Boies directly will keep you abreast of all of these types of oppertunities meeting your speciafications

Thanks for visiting

Angela Calla, AMP


Homebuyers Rejoice In Todays Buyers Market

General Angela Calla 4 Jul

The current mortgage rate environment truly is an amazing opportunity for Canadians!

It’s interesting to compare today’s mortgage opportunities to the peak of the market in 2008. With a $300,000 mortgage at a 40-year amortization and a 5.79% interest rate in 2008 compared to today’s 3.09% five-year fixed rate at a 25-year amortization means today’s payment would be $159 less and you would own your home 15 years sooner!

While the past isn’t always a reflection of what’s to come, the reality is that five-year fixed-rate mortgage rates over the past two years are the lowest in history and there are some great deals on properties out there! :

  • 2012: 3.09
  • 2011: 3.59

What you need to do with this info: If you don’t own…look at your options to BUY YOUR FIRST HOME.

Even though rates have nowhere to go but up at some time in the future, upon renewal you’ll have paid off enough of your mortgage that you should not have payment shock, and you’ll qualify with options maximized at today’s lower rates. If you continue to rent, your landlord has the ability to raise your rent in accordance with inflation, you receive no equity for your increase in payment and your only choice is to move. In BC this past year, landlords had the ability to raise rent by 4%.

Despite what you may have heard, real estate is affordable in BC. There are only small pockets in the premium markets that are out of reach for most Canadians. The reality is, if you make $40,000 per year, you can own a condo in many hot municipalities for a payment that may even be less than your current rent! The property ladder does not start at the top with a million dollar home – the sooner you start, the faster you can move up the ladder.

Example of a successful buyer this week with The Angela Calla Mortgage Team:

James, a 27-year-old single man, makes $19.31/hour working full time as a shipper for a tool company in Surrey. He has been with his current employer for the past year and was paying $1,250 a month in rent. He had managed to save over the years approximately  $10,000 with some diligent planning.  After consulting with our team on his options, he purchased a 2-bedroom, 2-bathroom condo on the Surrey/Langley border (close to his work) for $17,500 below the assessed value for $184,500. This unit was completely updated so he didn’t have to spend a penny on upgrades. It’s situated right across from the shopping centre, has a large patio and the unit suits his lifestyle. He can save money by having his friends over at the clubhouse, comfortably turf his gym membership as the building has a great gym and he now lives 10 minutes away from work. He could even walk to work (when we begin to see some real summer) and rent out his parking spot or spare ro om if he wanted to earn additional income. So this fundamentally fits into his budgeting with all of those aspects considered. His mortgage payment is $845/month (on a 25-year mortgage), plus strata fees (including heating) of $286. His property taxes work out to $56/month. His total costs per month are now $1,187 – which is $63 less a month than he was paying in rent! Breaking it down even further, his total costs work out to $40 dollars per day.

There are lots of examples of people we have helped just like James make up to a 2-bedroom purchase – not just in Surrey, but also in Langley, Burnaby, New Westminster, Port Coquitlam, Port Moody, Coquitlam,  Maple Ridge, Pitt Meadows, Delta, and yes even areas of Vancouver!  Don’t let news of changes in the mortgage industry prevent you from entering the property market and building equity in your own home!  

Our team of experts will clearly explain the upcoming mortgage changes and help build a plan based on your unique needs and financial situation.  Getting preapproved for a mortgage and learning your options is a simple process. All it takes is a 15-minutes phone conversation to answer some basic questions, and then for you to send over a payslip. Some would suggest it’s harder to get a concert ticket in the lower mainland!

Consider this: James is below the average income in BC according to this survey that says the average hourly wage is $23/hour: He lives comfortably  and still managed to save based on his choices on a single income. James doesn’t have parents who had the ability to gift him the money for his down payment, and he doesn’t have a secondary education (just a high school diploma).  What made him successful was that he took the time to educate himself and seek out the right team to help him build a plan while he’s just 27 years old. The right knowledge is very powerful and instrumental in your success.

Keep these facts in mind: We live in one of the most desirable places in the world; Our vacancy rate is below 2%; and 25% of British Columbians are landlords by either renting out a room or a suite. Regardless of the timing in the market, the key to success is always about affordability and fundamentals. When the simple planning is in place and you’re clear on your goal, you’ll be successful in your endeavour if you chose to become a homeowner.

If you or anyone that you care about is curious about their options, needs to update their preapproval with the recent changes or just wants help building a plan, The Angela Calla Mortgage Team is here to help.

Angela Calla, AMP
Mortgage Expert
Host of “The Mortgage Show” on CKNW AM980 Saturdays at 7pm


Phone: 604-802-3983
Fax: 604-939-8795

t: @angelacalla

Facebook: Angela Calla Team, AMP Your Mortgage Expert
Toll Free: 1-888-806-8080
Apply Online:
CLICK HERE to Watch My Video Presentation


Without question we are in a buyers market learn about your options now @angelacalla @willingtwo

General Angela Calla 4 Jul

Greater Vancouver housing market favoured buyers in June

The number of residential property sales hit a 10-year low in Greater Vancouver for June, while prices remained relatively stable.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 2,362 in June, a 27.6 per cent decline compared to the 3,262 sales in June 2011 and a 17.2 per cent decline compared to the 2,853 sales in May 2012.

June sales were the lowest total for the month in the region since 2000 and 32.2 per cent below the 10-year June sales average of 3,484.

“Overall conditions have trended in favour of buyers in our marketplace in recent months,” Eugen Klein, REBGV president said. “This means buyers are facing less competition and have more selection to choose from compared to earlier in the year.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,617 in June. This represents a 3 per cent decline compared to June 2011 when 5,793 properties were listed for sale on the MLS® and an 18.9 per cent decline compared to the 6,927 new listings reported in May 2012.

At 18,493, the total number of residential property listings on the MLS® increased 22 per cent from this time last year and increased 3.7 per cent compared to May 2012.

“Today, our sales-to-active-listings ratio sits at 13 per cent, which puts us in the lower end of a balanced market. This ratio has been declining in our market since March when it was 19 per cent,” Klein said.

The MLSLink® Housing Price Index (HPI) composite benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 1.7% and declined 0.7% compared to last month.

Sales of detached properties on the MLS® in June 2012 reached 921, a decrease of 37.4 per cent from the 1,471 detached sales recorded in June 2011, and a 19.1 per cent decrease from the 1,139 units sold in June 2010. The benchmark price for detached properties increased 3.3 per cent from June 2011 to $961,600.

Sales of apartment properties reached 1,026 in June 2012, a 19 per cent decrease compared to the 1,266 sales in June 2011, and a decrease of 18.4 per cent compared to the 1,258 sales in June 2010. The benchmark price of an apartment property increased 0.3 per cent from June 2011 to $376,200.

Attached property sales in June 2012 totalled 415, a 21 per cent decrease compared to the 525 sales in June 2011, and a 27.8 per cent decrease from the 575 attached properties sold in June 2010. The benchmark price of an attached unit decreased 0.1 per cent between June 2011 and 2012 to $468,400.

Download the complete stats package by clicking here.

Is Mortgage Portability Important

General Angela Calla 3 Jul

Selling your current home and moving into a new one can be stressful enough, let alone worrying about your current mortgage and whether you’re able to carry it over to your new home.

Porting enables you to move to another property without having to lose your existing interest rate, mortgage balance and term. And, better yet, the ability to port also saves you money by avoiding early discharge penalties.

It’s important to note, however, that not all mortgages are portable. When it comes to fixed-rate mortgage products, you usually have a portability option. Lenders often use a “blended” system where your current mortgage rate stays the same on the mortgage amount ported over to the new property and the new balance is calculated using the current interest rate.

With variable-rate mortgages, on the other hand, porting is usually not available. As such, upon breaking your existing mortgage, a three-month interest penalty will be charged. This charge may or may not be reimbursed with your new mortgage.


Porting conditions
While porting typically ensures no penalty will be charged when you sell your existing property and buy a new one, some conditions that may apply include:

  • Some lenders allow you to port your mortgage, but your sale and purchase have to happen on the same day. Other lenders offer a week to do this, some a month, and others up to three months.
  • Some lenders don’t allow a changed term or force you into a longer term as part of agreeing to port your mortgage.
  • Some lenders will, in fact, reimburse your entire penalty whether you are a fixed or variable borrower if you simply get a new mortgage with the same lender – replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand new term of your choice and start fresh.
  • There are instances where it’s better to pay a penalty at the time of selling and get into a new term at a brand new rate that could save back your penalty over the course of the new term.

While this may sound like a complicated subject, I can explain all of your options and help you select the right mortgage based on your own specific needs. Angela Calla Mortgage Team