Gearing up with a pre-approval and proper mortgage education

The local market is definitely buzzing these days. With summer nearly upon us people are grilling on the BBQs and enjoying the links and then there are those getting prepared to launch into homeownership.

Personal timing is what usually gets people sparked to make their moves, but when you have that come together with market timing – look out!

What we have coming into this season is again another interest rate anomaly. In the past month, rates have down from an average of 4.19% to the 3.69%, and lenders are seemingly vying for positions, with rate specials, quick closes and ‘No Frills’ mortgages.

These rates are again going to create a buzz that’s happened every time rates have gone below the 4.00% level, and we are averaging below the 3.80% threshold right now. Even the largest banks have advertised rates at 3.89% or better, except for RBC advertising their 4.24% ‘Special Offer’ which is weird to be pricing themselves out of the market, yet be the leader in dropping their posted rate.

The first quarter of this year was extremely busy with the super low rates sticking around until the middle to end of February, along with government changes spurring the housing market to action.

The housing market had cooled off for about four to six weeks afterwards, then consumers came out again looking for their pre-approvals…and many of them were in the 4.19-4.39% level, the nice thing about pre-approvals is, you can get a rate hold for 90-180 days, and you’ll get the best rate in that period!

So as rates have tumbled downwards for the past couple of weeks, those that have those higher rate pre-approvals will see their actual five-year fixed rates in the 3.69% level! And if they are comfortable with a variable rate, then they can get themselves a rate of P-0.85% which translates into only 2.15% – well at least until the feds increase prime rate.

The funny thing is, fixed rates (which over 70% of Canadians choose for their mortgage) are based on the bond yield, which is a market indicator of where the economy is at, and if rates were based on local markets Alberta’s rates should be in the 4.50-5.00% level as our own local economy is actually on fire. If you speak to someone in the oilfield industry they’ll tell you that they are firing on all cylinders. All you have to do is take a drive on QEII, and you’ll find yourself passing either a train of service rigs going to complete drilled wells, or even trucks loaded with down hole completion piping.

These are very subtle signs that our economy is on pace. I’m on that highway a lot, and I haven’t seen that type of traffic in a while, so seeing a couple of them along with truckloads with completion pipe is encouraging to say the least.

If you tie this to where interest rates are at, our local housing economy is just heating up as those armed with lottery-like interest rates are going to be coming out in droves to get their dream houses.

Are you prepared with a pre-approval and the proper mortgage education? If not, and you’ve begun researching homes, it’s likely time to talk to a Mortgage Professional so you can buy your own home and start grilling your own steaks for your friends at your house warming!

Jean-Guy Turcotte is an Accredited Mortgage Professional with Dominion Lending Centres and can be contacted for appointments at 403-343-1125, texted to 403-391-2552 or emailed to