2.99 % Mortgage rate...How good is it ?

Friends,

Ever since mortgage rates, 2.99 % for 5 year fixed for 25 years of amortization were announced by banks. I got so many inquiries, asking how much can we afford with this interest rate ?

Is it a good rate ? what are the pros and cons ? 

I explained pros and cons back in January when BMO offered discounted rate first time.

Don't worry I am going to repeat those pros and cons, however before that, have a look at the table below.
 I have tried to show that if a family can afford to pay $1000 in rent, they can easily afford a condo with a price tag of $250000, of course you have to consider the cost of property tax and utilities.  

Now the pros and cons of these low low mortgage rates offered by BMO! 

In my view it's a very good deal for those home buyers who can afford 25 years amortiazation. But for those who are on the border, they have option to go to other big banks RBC, TD, CIBC - all are offering low rates but for 4 years and the good thing is 30 years amortization.

Here are some comparision between traditional 30 years mortgage and 25 years with @ 2.99 %

           Traditional Mortgage                                                             2.99 % Mortgage

1)     30 years amortization                                                                  25 years amortization

2)     20 % Once a year lump sum payment                                       10 % once a year lump sum payment

3)    You can double up a payment                                                     You can't skip or double up a payment.

4)    You can refinance or switch your lander                                     You can't refinance or switch your lander

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Best regards,

Ritesh JoshiYour Next Door Realtor

www.riteshtherealtor.com

647-281-3424

GTA REALTORS® RELEASE RESALE MONTHLY MARKET FIGURES

Toronto, March 5, 2012 –


Greater Toronto REALTORS® reported 7,032 sales in February 2012 – up 16 per cent compared to February 2011. New listings were also up over the same period, but by a lesser 11 per cent to 12,684. It is important to note that 2012 is a leap year, with one more day in February. Over the first 28 days of February, sales and new listings were up by ten per cent and six per cent respectively.
“With slightly more than two months of inventory in the Toronto Real Estate Board (TREB) market area, on average, it is not surprising that competition between buyers has exerted very strong upward pressure on the average selling price. Price growth will continue to be very strong until the market becomes better supplied,” said Toronto Real Estate Board President Richard Silver.
“It is important to note that both buyers and sellers are aware of current market conditions. This is evidenced by the fact that homes sold, on average, for 99 per cent of the asking price in February,” continued Silver.

Check What RBC(Royal Bank Of Canada) says about 2.99 % Interest Rate

Call me if you are interested in these  rates @ 647-281-3424.(Ritesh Joshi) 

I will hook you up with Royal Bank Mortgage Specialist