Mortgage Archives

Preparation and timing are the key to refinancing

Bryan Dudley & James Paleologos, Apartment Financing Specialists, Realtech Capital Group Inc.

In the four calendar years since the fall of 2008, the average annual 5-year GoC bond yield fluctuation has been ~125 basis points from high to low (as illustrated in the graph below). These dramatic variances in bond yields have enticed many savvy borrowers to pre-qualify for refinancing or mortgage renewals in an attempt to forward fix their interest rates during one of these downward swings.

Depending on their objectives, apartment owners can begin their refinancing/renewal process up to 1 year in advance of their current mortgage maturity. Some examples have included early prepayment of mortgages to capitalize on current low rates, blending and extending existing financing, hedging interest rates months in advance of upcoming renewal/funding dates, and refinancing with CMHC to achieve the lowest interest rates in the market. In all of these cases, the key is to start the refinancing process early so that borrowers can be pre-approved and poised to capitalize on low interest rates should a favourable swing occur before their funding date. Securing a lower interest rate dramatically improves cashflow, and can mean a difference of tens, even hundreds of thousands of dollars over the term of a mortgage.

Current rates for CMHC-insured apartment mortgages are ~2.05% for five years and ~2.70% for 10 years. Conventional rates start 100 basis points above CMHC, but are often even higher due to the floor rates which many lenders have been implementing lately.

For further information, or to discuss your options for upcoming refinancing or mortgage renewals, please contact:

Bryan Dudley


James Paleologos

Current Market for Apartment Financing

Bryan Dudley & Greg Perih, Realtech Capital Group Inc.
July 2010

With the current volatility in the interest rate market, a question we often get asked by clients is “what are interest rates going to do in the future?” While there is no way to predict the future, we can look into what interest rates have done historically and at the forecasts put forward by some of the top economists in the region.

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The Time is Right to Re-finance Your Apartment Building

Bryan Dudley, Realtech Capital Group Inc.
March 6th, 2009

The current lending environment presents apartment owners with a unique opportunity to improve their cash flow by refinancing at today’s low rates. As many apartment owners will know, lenders price their loans for apartment buildings in terms of a “spread” over Government of Canada (“GOC”) bonds. As a result, other things equal, if bond rates fall, the interest rate on new loans for apartments will fall with it.

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Apartment Renewal and Acquisition Financing

Steve Merritt, Citifund
December 2008

The mortgage market has been a very interesting playing field lately. Lender spreads are up, and capital for real estate lending has been restricted for many reasons including some lenders literally closing their doors.

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Major Shift in Lending Parameters

Nic Green & Brian Jagger, Citifund Capital Corp.
March 2008

The mortgage market has been abnormally volatile in recent months. The consequences of the sub-prime mortgage issue and the ensuing collapse of the asset backed securities market have negatively impacted the supply of Canada’s mortgage market. Supply has shrunk and the spread over bond yields has increased.

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