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FINALLY! Buyers Are Getting A Break From The Banks with Lower Mortgage Rates! But See Sutton's Special!
Good news for home buyers - mortgage rates are coming down!
Canadian Government steps in to assist banks - in turn Bank of Montreal announces Mortgage Rate Cuts for Monday November 17th.
While we have our Sutton Members Mortgage Program, still the lowest in Canada, having banks across the board lower their rates will only help build consumer confidence in our marketplace.


Toronto Star Article posted Friday November 14th:

There were early indications this afternoon that residential mortgage rates are drifting lower for consumers after Bank of Montreal announced a "special" offer of 5.25 per cent on its benchmark five-year, fixed-rate home loan.

BMO said its new rate takes effect on Monday and would be available to all new and existing customers. Its current posted rate on that product is 7.2 per cent. It was not immediately clear if the 5.25 per cent rate was a limited time offer, or if other Canadian banks would follow suit.

Traditionally, five-year, fixed-rate mortgages are the most popular loan option for Canadian homeowners. In making its announcement, BMO noted that its new rate is "currently the lowest available market rate for a five-year fixed term."

BMO's announcement comes two days after Finance Minister Jim Flaherty tripled the size of the federal government's mortgage purchase program to $75 billion and a day after some Opposition MPs began voicing concerns about consumer interest rates.

"We fully support Minister Flaherty's continued efforts to promote the availability of credit for Canadians," said Frank Techar, BMO's president and CEO of personal and commercial banking, in a release.

"Helping to lower funding costs is significant for the entire industry and we are excited to pass along the savings to our customers. By offering a very attractive rate that is guaranteed for a full five years, we are giving Canadians the added benefit of predictability and comfort during an uncertain economic environment."

Following days of speculation, Flaherty announced Wednesday that the federal government will buy up to an additional $50 billion in insured mortgages from banks, bring to $75 billion the total amount of money available under the program announced last month.

Flaherty has repeatedly said the move would help domestic banks, which are dealing with skyrocketing funding costs, to raise more longer-term funds so that they can keep providing mortgages to consumers.

"It is an efficient, cost-effective and safe way to support lending in Canada at a time of extraordinary strain in global credit markets," Flaherty told reporters on Wednesday.

The action plan involves the government purchasing up to $75 billion in "insured mortgage pools" through the Canada Mortgage and Housing Corp., a Crown corporation that is responsible for the housing industry.

So far, Ottawa has purchased about $12 billion of those loans. Ottawa also agreed last month to provide guarantees on more than $200 billion of bank debt.

Flaherty has stressed the mortgage program involves the purchase of "high-quality assets already guaranteed by the Government of Canada," and said the initiative "will earn a modest rate of return for the government, with no additional risk to the taxpayer.

Some Opposition MPs, however, are openly questioning Flaherty's risk assessment.

"What kind of assurance is that really for Canadians? CMHC is a Crown Corporation. If it ends up in financial difficulty because of what has just happened, guess who is going to pick up the tab?," said NDP leader Jack Layton in an interview yesterday.

Layton is asking the federal government to release more details about its agreements with banks and wants a full debate of those deals in the House of Commons to ensure that consumers are adequately protected.

Liberal MP Dan McTeague is also calling for more transparency about those deals. He said that while banks are clearly coping with the credit crisis, there must be "some underlying guarantee" on how government money is spent by banks.

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