Niagara in 2021 is truly a tale of two cities: while some people are taking advantage of a unique real estate market, others are suffering rare financial distress brought on by the pandemic economy.
To learn more about navigating these financial waters, we interviewed Niagara-region mortgage expert Steve Dainard. Mr. Dainard has seen economic tides change over the years as a broker at Mortgage Architects, where he helps people select the best mortgage options for their situations and goals. Dainard won the Diamond Award for Niagara This Week Reader’s Choice in 2020 for Best Mortgage Broker in Niagara Falls, recently received the Mortgage Architects 2020 award, and is a President’s Club recipient.
EM: The COVID-19 pandemic has caused financial shifts in Niagara, and globally. From a historical perspective, where do mortgage rates sit now? Do you expect mortgage rates to increase in 2021?
Steve Dainard: Mortgage rates are still very competitive. Recent increases in the 5-year bond markets have caused an increase in 5-year fixed rates. However, 5-year variable rate products are still extremely low. The general forecast for the remainder of 2021 is for rates to fluctuate slightly. This is dependent on overall economic market conditions.
EM: As the pandemic is hopefully nearing its end, many homeowners in Niagara are experiencing financial distress. What’s a useful financial tool they can use to find relief?
Steve Dainard: Many homeowners are utilizing secured homeowner equity lines of credit (SLOC) to manage cash flow fluctuations. The primary reason is that SLOC’s have a minimum interest-only repayment obligation and are completely open. Rates for SLOC’s are currently at Prime +50 bps, or 2.45% + .50% = 2.95%. I think you’d agree this rate is significantly better than high credit card rates.
EM: There seems to be a conception that Ontario mortgage brokers charge their clients a service fee, or have higher rates than banks. Can you clarify how it actually works?
Steve Dainard: Additional fees are based on the complexity (work) involved in the file. This normally occurs with Alternative and Private lending deals. No fee should be charged for a mortgage with a mainstream competitive lender. The broker channel has access to excellent competitive rates and products—there is no rate “premium” because a mortgage broker was used.
This article is opinion and not a substitute for professional advice. Disclaimer