Randy Miller

Broker Of Record

Urban Avenue Realty Ltd., Brokerage

Whitby & Brooklin Real Estate

Office 905-430-1800

Direct 905-430-9444

Email: randy@randymiller.ca


red house mortgage rate

On the heels of headlines forecasting ‘inevitable interest rate hikes’ came the announcement of a 0.25% rate reduction to the Bank of Canada’s overnight lending rate.

The majority of Mortgage Brokers found themselves spending the first two work weeks of 2015 calming clients in the face of multiple headlines forecasting interest rate ‘shocks’ ahead. In turn, the past two weeks were spent explaining to variable-rate clients the subtle, yet important difference between the bank of Canada’s Prime rate and their mortgage lenders' ‘Prime’ rate.

Lenders base variable-rate mortgages on what is referred to as their own internal Prime rate. Although historically lenders have moved in lockstep with the Bank of Canada decisions, there was some initial reticence to lower effective interest rates on current variable-rate mortgages and after nearly a week without movement Lenders reduced their internal Prime rate from 3.00 to 2.85% sharing some of the Bank of Canada’s reduction with variable rate mortgage and line of credit holders, but not all of the rate reduction.

One important point is that the Bank of Canada’s Prime rate is specifically NOT used to qualify clients for mortgages. In other words, Canadians do not currently qualify for any more mortgage debt today than they did the day before the rate reduction announcement. Accordingly this reduction in interest rates does not directly strengthen purchasing power for home buyers, and thus should do little to add more fuel to real estate values.

It is further worth noting that, historically, as lenders reduce their own Prime lending rate on variable-rate products, the discounts offered on these products - mortgages, lines of credit, etc . tend to be adjusted upward, negating any potential gains for new mortgage applicants. Existing closed variable-rate discounts will of course continue to be honoured until the end of the client's mortgage term.

In short, although this rate reduction may bode well for clients currently in a variable-rate mortgage, it may not be of significant net benefit for clients applying for a variable-rate product in the coming weeks. Although today we have both deep discounts on variable rate products, and the new lower 2.85% Lender Prime rate. New applicants may have their cake and eat it too.

Fixed rates, although largely dictated by the bond market, have been edging downward since Jan 5. Despite this material and documented decline, there had not been a major headline noting this. Rather headlines were largely promoting the opposite of what was occurring in reality. The day that the Bank of Canada announced the cut of 0.25%, the bond market saw a (then) record low of 0.83% and has since dipped below 0.60%.

This has created significant increases in lenders' fixed-rate profit margins, and arguably calls for further rate reductions to fixed-rate products, in particular the five-year fixed-rate mortgage. However, as with the cut to Prime, lenders have thus far been slow to respond. Offering 0.05% and 0.010% reductions and reaping the increased profits. Lenders remain unlikely to make any significant moves until one breaks ranks. With strong property values coupled with strong sales activity in most major markets, there seems little incentive - or fundamental desire - on the part of lenders to reduce rates further.

What is evident at this time is that variable-rate clients will continue to be the big winners into the foreseeable future, and those clients who prefer a fixed-rate product will also continue to benefit from historic lows as well. 

If you are planning to buy a house in Whitby, Brooklin or other areas within Durham Region, contact me. I can help you with the buying process and refer you to a mortgage specialist that can explain the products and help you choose the right mortgage product.

Randy Miller
Broker of Record

Royal Heritage Realty Ltd.
Offices in Pickering and in Whitby


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The Town of Whitby and the Region of Durham are co-hosting a Household Hazardous Waste (HHW) and Electronic Waste (E-Waste) Drop-off event. 

When: Saturday October 4, 2014, from 8:00 a.m. to noon.

Where: The Town of Whitby's Operations Centre, 333 McKinney Drive



Examples of acceptable electronics (e-waste) include, but are not limited to, the following materials:

  • Cellular phones
  • PDAs & pagers
  • Audio & video players
  • Cameras & radios
  • VCRs/DVD players
  • Telephones
  • Stereos & receivers
  • Desktop computers
  • Computer peripherals
  • Monitors
  • Printing devices
  • Camcorders
  • Televisions
  • Portable computers

Click here for more information: E-Waste


Household Hazardous Waste

Residential products currently being accepted include, but are not limited to:

  • Aerosol Containers regardless of product content
  • Antifreeze and its related container
  • Batteries - single-use and rechargeable
  • Compact Fluorescent Lights (CFL)
  • Fertilizers and their containers
  • Fire Extinguishers
  • Flammable material such as camping fuel, kerosene, gasoline, cigarette lighters, driveway sealer, etc.
  • Fluorescent light bulbs and tubes 
  • Mercury switches
  • Oil Containers of 30 litres or less for a wide range of oil products
  • Oil Filters and air filters for items such as household furnace fuel filter, storage tank diesel fuel filters, transmission or internal combustion engines, etc.
  • Paints, Coatings, Paint Thinners, Varnish, Stains, Shellac etc.
  • Fungicides, Herbicides, Insecticides and their containers
  • Pharmaceuticals prescription and non-prescription
  • Photography Chemicals
  • Pool and Spa Chemicals
  • Propane Tanks and other Pressurized Containers
  • Reactive material such as metal powders that may explode with contact to air and or water
  • Solvents (such as paint thinner, turpentine, paint stripper or nail polish remover)
  • Syringes and needles used in the administration of health care (human and veterinary)
  • Thermostats or any switches containing mercury
  • Used Oil Filters

Click here for more information: HHW (Household Hazardous Waste)

Pick up a FREE gallon of recycled paint when you drop off HHW. One per vehicle. Limited quantity of 200 available. Bring a non-perishable food item to support the local food banks.


Randy Miller


Re/Max Rouge River Realty Ltd., Brokerage

905-668-1800 or 905-427-1400


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