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This Week's Mortgage Market Update Contains:

• Top 10 Questions to Help You Find the Right Mortgage Broker
• 5 reasons why a fixed-rate mortgage could be your best bet
• Rates you can take to the bank

This Week's Quotation:

“The only courage that matters is the kind that gets you from one moment to the next.” -  Mignon McLaughlin, The Second Neurotic's Notebook, 1966

This Week's Highlights:

• Housing starts decline slightly in October
• Employment tumbled in October
• Annual headline and core inflation rates up in September

Top 10 Questions to Help You Find the Right Mortgage Broker

When selecting a mortgage advisor, you want to make sure that you ask them some basic questions before you decide to work with them. Remember, there are lots of eager and willing mortgage providers who are able to provide you with outstanding service and advice so treat this as an interview where you can ask the questions and be in control. I would always recommend that you ask your mortgage provider at least these 10 questions that will help set your mind at ease and will confirm you are dealing with some that is knowledgeable and working with your best interests in mind. Read more....

5 reasons why a fixed-rate mortgage could be your best bet

It's a decision that millions of Canadian homeowners struggle with repeatedly during their time as homeowners: Do they choose the security of a fixed-rate mortgage, or opt for the flexibility (and usually lower cost) of a variable rate and hope that rates don't spike higher? But right now, conditions in the mortgage market mean homeowners can actually get the best of both worlds, according to market-watchers. For years, we've seen evidence that people who opted for variable-rate mortgages ended up saving money over the fixed-rate crowd —anywhere from 77 to 90 per cent of the time, depending on the period selected and the assumptions used. Read more....

Rates you can take to the bank

Are Canadian homeowners really that much of a safer bet than the Italian government? It's an interesting question given that Canadians can lock into a five-year mortgage at a rate just above 3%. There's more than one European government that would like to borrow at that rate. The reason Canadians can get such cheap money on a mortgage with as little as 5% down is mortgage default insurance, which is backed by the federal government for both Crown corporation Canada Mortgage and Housing Corp. and its private competitors. Read more....

"THIS WEEK'S HIGHLIGHTS"

Housing starts decline slightly in October

Canadian housing starts remained essentially steady in October, falling 0.6% to 207,600 annualized units from September's 208,800 (earlier reported as 207,600). October's slight decline in the pace of housing starts was entirely due to a 9.0% drop in the urban singles component, to 60,900 from 66,900 in September. The volatile urban multiples component continued to climb in October, with a 1.7% increase to 123,600. Rural starts also rose, from 20,400 annualized units to 23,100. On a regional basis, big declines in urban starts were seen in Quebec (-28.8%) and the Atlantic provinces (-43.5%), following strength in these areas last month. These declines were the result of a slower pace of construction in both the singles and multiples components. Ontario, the Prairies and British Columbia all saw gains, of 11.7%, 28.2% and 1.5%, respectively. These gains were entirely driven by multiples starts, with singles declining in all areas. Growth in multiples was particularly pronounced in the Prairies, with the multiples component increasing by over 93%.

Employment tumbled in October

Canadian employment fell by 54,000 in October. The labour force contracted by 13,800 in October and the unemployment rate rose to 7.3% from 7.1% in September. The October report showed a decline in employment in the goods producing industries where the number of employed fell by 51,900. Construction (-20,100) and manufacturing (-48,400) jobs were cut in the month. In the services side of the economy, employment dipped by 2,000. All jobs lost were fulltime with 71,700 positions cut. Part-time employment rose by 17,700. On net, full-time employment is still up by 198,200 in 2011. The public sector shed 3,800 positions. Private sector employment reported 32,000 jobs cuts. Still, the declines over the three month period only reversed 71% of July's 94,500 surge. The number of self-employed individuals was down by 18,100 following the 38,900 increase in September. The year-over-year gain in average hourly wages for permanent workers slipped to 1.3%, a tad slower than September's 1.6% pace and still well below the average 2.3% in the first half of the year.

Annual headline and core inflation rates up in September

The September consumer price report showed the headline index rose 0.2% in the month however, the core rate ran much hotter, rising 0.5%. The year-over-year headline inflation rate edged up to 3.2% in September from August's 3.1% pace. The annual core rate was 2.2%, above the 1.9% recorded in August. Women's clothing prices spurted by 10.5% in September, which, supplemented by rising tuition fees (4.2%), car prices, and air transportation costs, boosted the inflation rates. Financial services costs also rose 4.8% in September. Moderating these increases were declines in electricity costs (which partially reversed increases in July and August) and insurance costs. The rise in the headline rate was also dampened by declining prices for fresh fruit and vegetables, and gasoline, three items that are not included in the core measure. The rise in vehicle prices and larger than seasonal increase in clothing prices accounted for about 0.2% of the monthly increase. Compared to September 2010, prices for gasoline were up 22.7%, fuel oil prices rose 27.4%, vehicle insurance premiums rose 5.6%, and food from restaurants and meat prices were also higher. At the same time, mortgage interest costs, furniture prices, computer equipment, and natural gas prices declined. On balance, the annual inflation rates, both headline and core, moved higher in the month.