B6 - Wednesday, March 14, 1984 - North Shore News CONSUMERS COULD be the big winners as banks and. trust companies attempt to outmanoeuvre each: other to increase their share of the residential mortgage market, according to the latest Cana- dian Mortgage Market Bulletin. Banks are turning: their at- tention to the residential sec- tor as a result of cutbacks in demand for commercial mor- tgages, says Don Hewitt, A.E. LePage Residential Real Estate spokesman. ‘*The current slowdown in commercial real estate development means there are excess funds available. The banks therefore are placing more emphasis on the residential mortgage market.”’ This expanded activity into a market area traditionally dominated by trust com- panies has created a flurry of activity. Some banks and trust companies have intro- duced more flexible prepay- ment plans in recent weeks that allow annual prepay- ment of 10-15 per cent, without penalties, along with weekly, bi-weekly and twice a month payments. The more flexible prepay- ments are a good idea, says Hewitt, for those who can af- ford to increase their payments by 10 of 15 per cent cach year. The recently proposed mortgage interest rate hike by AUSTIN Gi business = I 3 the Canadian imperial Bank of Commerce has created some concern in the lending market, says Hewitt. “It is not expected that this signals a general escalation in interest rates. However, it is only a matter of time before other institutions raise their rates.”’ Complementing the in- itiatives taken by the banks and trust companies are pro- posals announced by the Federal Government in_ its February 15 budget. The proposed Mortgage Rate Protection Plan (MRPP), which is planned to be available to anyone taking out or renewing a mortgage after March I, ‘‘reassures home buyers providing pro- tection against dramatic in- creases in mortgage interest rates,’’ says Hewitt. Hewitt adds that buyers who purchase a home with 2% HOURS TELEPHONE ANSWERING SERVICE - ONLY $50 PER MONTH CLASSIFIED ANSWERING SERVICE 669-7973 A NEW $3.5 million dollar building for C.H. Cates and Sons is well underway at Lonsdale Quay. has been at that location on the waterfront since 1892. COMPETITION HELPS a market flexible only 10 per cent down already are required by Canada Mortgage and Hous- ing Corporation to pay a 1.5 per cent premium to insure the mortgage. ‘‘If these home buyers want the additional protection, they are adding a total of 3 per cent to their original mortgage.”’ Commenting on proposals regarding ten-year mor- tgages, Hewitt says they would help to bring stability, increasing consumer con- fidence in buying a home. **Getting lenders interested in ten-year terms should be assisted by Government pro- posals to have CMHC insure the mortgages,’’ explains Hewitt. Proposed changes to the Interest Rate Act would re- quire full disclosure by lenders of mortgage terms The Partners of NEWS photo Eric Eggertson The North Van company and conditions. In addition, the lender would be required to allow ‘borrowers to re- negotiate their mortgages. Hewitt points out that some banks already are doing this. ‘Borrowers are required to pay a penalty equal to the dif- ferential in current interest rates and their mortgage rate.”” Competition among lenders is very intense, says Hewitt and this is resulting in a greater degree of flexibility. This, in turn, is translating into greater activity in the residential market. Demand for commercial funds remains depressed because new construction is very limited, says Bill Ander- son of A.E. LePage Com- mercial Real Estate Services. Commercial rates are PERRAULT, SMYTH & COMPANY Certified General Accountants are pleased to announce the admission to partnership of CREDIT UNIONS LEAD On-line system second to none CREDIT UNIONS’ have claimed for some time that they take a back seat to no one in the banking business and their latest move seems to indicate they are living up to what they say. set up links with networks which will provide Canadian customers access to their ac- counts from 4,000 automated teller machines throughout the United States. In fact, with North Shore Credit Union leading the way the CUs have taken a lead in electronic banking systems. The local credit union along with others, have link- ed up with Datawest, a com- pany that provides on-line electronic banking services for the customers of 64 B.C. credit unions, and creates a shared electronic funds transfer network. 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