A friend Gary Tagg sent me this report.

With the election now in the past, the big news headlines are all about the economy. Terms such as "credit crunch" have been coined to try and describe what the international financial sector has been experiencing.

We thought we would spend a few minutes and go over how this credit crunch has affected the mortgage markets.

1. Existing Adjustable Rate Mortgages

If you are fortunate enough to be in a floating interest rate mortgage, you have probably noticed your payments decrease over the past several months. You will also notice in November that your payments will have gone down again.

Prime, which your mortgage rate is floating against has gone from 6.25% all the way down to 4.0%. For many of our clients, that means an interest rate less than 3.5% on your mortgage. These current rates are likely to stay low (or even up to 0.75% lower still) until 2010.

The Bank of Canada released a statement on Tuesday indicating that we are still likely to see a few more rate cuts saying "some further monetary stimulus will likely be required" and has indicated that inflation in 2009 will be close to 0.60%, much lower than the ideal 2.0%.

2. New Adjustable Rate Mortgages (and Home Equity Lines of Credit)

While we used to offer rates as low as Prime LESS 0.90% on Adjustable Rate Mortgages, those rates have slowing edged their way up. In the last 4 weeks, we have seen two trends with this type of mortgage offering:

1. Rates have gone from being LESS than Prime to being MORE than Prime. Today, our lowest Adjustable Rate Mortgage is at Prime PLUS 0.75%.

2. Some lenders have stopped offering floating rate products altogether. For a few days even CIBC stopped offering them, but brought them back (albeit at a much higher rate) a few days later.

3. Fixed Rate Mortgages

We have recently seen rates on Fixed Rate Mortgages go up, but they haven't yet increased beyond levels we have seen in the last year. If you are currently in a Fixed Rate Mortgage, you can rest assured that your payments will not change until your mortgage comes up for renewal.

4. Mortgage Renewals

If your mortgage is coming up for renewal, there are many factors to consider. Please give us a call at 1-877-241-8934 or visit http://www.albertahomemortgages.com  before signing any renewal papers!

 Once you know that you are ready to purchase a home in Fort McMurray, please visit www.McMurraysBestHomes.com or call Patrick Dardis of Royal LePage True North Realty at 780 715-1382