I have recently partnered up with the Tax Deductible Mortgage Plan or TDMP. I have always believed that part of the mortgage planning process should be to consider if it is possible to make your mortgage more tax efficient.

For many clients the idea of having a tax deductible mortgage is appealing but the thought of all the paperwork is too much to even consider the idea. For these people TDMP may be the answer. TDMP manages the entire process of converting your mortgage from being non-tax deductible to being a fully tax deductible mortgage.

By following this program you will be able to save money on your taxes and pay off your mortgage sooner.

TDMP does charge an initial set up fee and a monthly fee to operate the program but these fees are also tax deductible and over the life of your mortgage will be covered many times over by the savings from following the plan.

If you are self-employed or own an investment property you should definitely consider this program. Or if you want to build an investment portfolio but are not sure were the extra monies for saving will come from you this may be the answer.

To find out more about the Tax Deductible Mortgage Plan click here or give me call at 604-961-2400.

Market Update

The biggest change to interest rates has been with the variable rate mortgages. Many lenders have now reduced the discount they are offering to prime minus .3% to prime minus .4%. We still have some lenders in the prime minus .6% to rime minus .7% range. This move came very quickly and reflects the banks concerns over the situation in Europe. They are trying to prevent a situation similar to 2008 when their cost of borrowing for their short-term money increased because the banks stopped lending to each other. If Greece or Italy were to default on their debts it could cause another round of banks refusing to lend to each other until they can confirm which lenders have exposure to this debt.

Canadian bond rates have remained very close to historic lows. These lows bond rates have allowed lenders to reduce the interest rates on their fixed term mortgages. As a result we have seem many lenders reduce the interest rate on their five year fixed term rates are in the 3.29% to 3.49% range. With some lower rates being offered for those that can close their mortgage quicker. There still may be some room for the five year fxed rates to drop a bit further.

Even thought it does not appear that rates are going up it is always a good idea to get a rate hold in place if you are thinking of making a move. The first step to secure a rate hold is to complete an application. Give me a call at 604-961-2400 or you can get started by completing my secure on-line application here.

“Green” is the colour of the day as the steady stream of positive profit reports garners attention against a noticeable lack of negative economic data. Retailers continue to report robust earnings, with Staples and Target the latest to beat estimates and raise full-year forecasts. Deere also reported higher than expected profits on a 22% climb in sales over the last year. Dell missed the mark last night. With earnings season winding down, per-share profits has clocked a hefty 17% growth rate over last year’s second quarter, significantly higher than was expected heading into the season. After a brutal start to the month, in terms of both stock prices and economic figures, the tone has improved substantially. The TSX has clawed back almost all of the month’s decline, and economic indicators from retail sales to job growth to industrial production have all been significantly healthier than forecast. The TSX is up 160 pts this morning. The Dow is up 99 pts.

The focus this morning is (surprise, surprise) the continued negotiations, and more importantly the lack of progress, by US lawmakers to forge a credible long-term spending plan that will reduce the ongoing deficit while raising the current debt ceiling. The President took to the airwaves again this morning, urging American’s to keep the pressure on by phoning or e-mailing their representatives.  House Speaker Boehner once again delayed a vote last night for his plan as he failed to drum up support within his own party. Futures immediately sank after that and North American markets opened deep in the red this morning, however indexes have been steadily climbing since. Economic growth slowed more than expected in the second quarter on both sides of the border, with US GDP expanding at only a 1.3% pace while Canadian GDP actually contracted in May. The Canadian results were likely impacted by effects from the tsunami in Japan, but were still short of the Bank of Canada’s forecasts and will ease any pressure to raise rates in the near future. The TSX is down 95 pts. The Dow has almost erased its initial triple digit decline, down just 9 pts at last check.

North American markets slipped at the open as US lawmakers continue to spar over plans to address the countries deficit. President Obama took to prime-time TV last night to urge a compromise, while House Speaker Boehner continues to blame the Administration for blocking a workable deal. The two sides have come fairly close to an agreement over the last few weeks, so it would appear the majority of a framework is in place with a just a few hurdles left to clear. Whether or not those hurdles are surmountable remains to be seen. Profits continue to come in largely ahead of estimates, but with a few notable weak spots this morning. Ford, Baidu and Broadcom were among companies to beat estimates, while 3M and Netflix missed the mark. United Parcel Service lowered its guidance for the third quarter due to “softening” conditions, after reporting its best-ever second quarter. The TSX is down 93 pts. The Dow is off 48 pts.

North American markets are taking a pause this morning after yesterday’s rally that pushed the S&P500 to its biggest one-day gain in four months. Positive earnings reports sparked the fire, with fuel being added later in the day after President Obama endorsed deficit cutting plan outlined by a bi-partisan group of senators. Apple reported quarterly profits after the close yesterday that were nothing short of spectacular, with net income handily topping estimates on sales that were almost $3 billion higher than forecast. It’s still very early in the quarterly earnings season, but the trend appears nicely intact with almost 90% of reports beating forecasts. The Bank of Canada released its monetary policy report this morning, and in a seeming contradiction to yesterday’s hawkish announcement they lowered their GDP growth estimates to an anaemic 1.5%. This hasn’t stopped the Loonie from continuing its climb, and although this year’s intra-day high is about a quarter cent north of where we are now, a close at current levels would be the highest close since 2007. The TSX is up 30 pts. The Dow is down 16 pts.

For the third consecutive day we’ve witnessed a strong start to North American trading, only to have it fizzle as the day progresses. Positive profit reports and a wave of M&A activity boosted indexes at the open, but a soggy reading on US consumer confidence pared those gains shortly thereafter. Mining giant BHP Billiton made a $12.1 billion all-cash offer for Houston based shale gas producer Petrohawk Energy last night at a substantial premium, not only to Petrohawks share price but to gas producers in general. The move would propel BHP into the top ten of the world’s oil and gas producers. Billionaire investor Carl Icahn made a $10.2 billion offer for Clorox in a move that was designed to attract other bidders. CIBC agreed to buy a 41% stake in asset manager American Century Investments from JP Morgan, which is expected to be immediately accretive to CIBC’s earnings and help the bank to increase its dividend. And speaking of earnings, the season is heating up with Citigroup, Mattel and Google all beating profit estimates. The European Banking Authority will release results of its stress tests on Europe’s banks this morning, which will certainly garner some attention. Congress is expected to vote on a $2.4 trillion increase to its debt limit next week. The TSX is up 26 pts. The Dow has rallied to a 25 pts gain just in the last few minutes.

Variable rate mortgages are now n the 2.10% to 2.25% range and five year feixed term mortgages are in the 3.64% to 3.89% range.

The Bank of Canada is scheduled to meet on July 19th but most analysts are predicting the Bank of Canada will leave the overnight rate at the current level. This means that variable rates will remain in the 2.10% to 2.25% range for now. TD Bank and the Scotia Bank have both predicted that the Bank of Canada will not make any changes to interest rates until 2012.

RBC, TD and CIBC attemped to increase the rates on the five year fixed terms recently however most other lenders did not follow. The bond markets which set the fixed erm rates have remained fairly steady so there does not appear to be any pressure for these rates to rise at this time.

Of course if you are thinking of buying or have your mortgage coming up for renewal this year it never hurts to get a rate hold in place just in case.

If you have any questions about your Vancouver mortgage please email me at lawrie.thom@mtgarc.ca or you can call me at 604-961-2400.