Mortgages in Canada can be a murky subject – one that we hope to shed some light on with a series of highly informational articles.
Latest News
CMHC reports annual pace of housing starts in April up from March May 18th
Canada Mortgage and Housing Corp. says the annual pace of housing starts for April rose 17% compared with March..... More »
Home construction must double over next decade to restore 2019 affordability: CMHC + MORE Jun 20th
Canada Mortgage and Housing Corp. says up to 4.8 million new homes will need to be built over the next decade to restore affordability levels last seen in 2019 based on projected demand..... More »
An inside look at how your loans — and spending — affect your credit score Apr 6th
Having a variety of loans could help strengthen your credit score — or harm it, depending on your spending and payment history. But a credit card, car loan and mortgage work differently, making it hard to know how to improve your number..... More »
Latest in Mortgage News: House Prices to Moderate This Year, Says CMHC May 13th
Home prices are expected to finally level off from the "unsustainable" increases that have been seen over the past year, says CMHC..... More »
AKAL launches AKAL Canada brand to drive national expansion Sep 25th
After 25 years training brokers in Ontario, AKAL Mortgages is extending its model across the country with the launch of AKAL Canada..... More »
CMHC Report Shows the Emotional Impact of the Housing Bubble
– ratesupermarket.ca
A June 2019 Housing Market Insight report, from the Canada Mortgage and Housing Corporation (CMHC) has highlighted the impact of bidding wars on property prices over the past two years. The report demonstrates the emotional factors that drive Canadians to stretch their budget and engage in bidding wars, regardless of their self-identified appetite for risk.
The CMHC surveyed more than 65,000 households during the fall of 2018 in an effort to gauge the motivating factors for homebuyers in Vancouver, Montreal, and Toronto – Canada’s largest and most heated housing markets.
More than half the respondents believe foreign investors are helping drive up prices, particularly in Vancouver where 70 percent of people cite foreign investment as an issue. The CMHC report pointed out that in Toronto, homebuyers were aware of the impacts of macro-economic factors and believed those to be more substantial in the cost of housing than other factors.
“Respondents’ perceived traditional fundamental drivers, such as employment growth, interest rate changes and population growth, to be less influential than subjective ones linked to speculation, such as city attractiveness and the presence of foreign investors…
Lower Rates Means Less Stress in the “Stress Test”
– ratesupermarket.ca
Starting now, Canadian mortgage seekers will find it easier to qualify for more money. That’s because the Bank of Canada has dropped its five year benchmark qualifying rate from 5.34 percent to 5.19 percent. This is the rate banks use to qualify would-be-homebuyers for a mortgage.
This is the first time the rate has dropped since September 2016. Since then the rate has only gone higher. The Bank of Canada posted rate is calculated by using the five year fixed rate at the big six commercial banks.
Why this is significant?
Since January 2018, all Canadians, insured and uninsured, shopping for a new mortgage have to pass the so called “stress test.” Previously only those with less than 20 percent down, or insured mortgages, were subjected to an affordability test. Now everyone has to prove they can pay. Formally called, guideline B-20, it was brought in as a tool to better assess if Canadians could afford rates for the long term, especially if rates were to rise.
Housing slowdown
Real estate sales have slowed and prices are lower since the stress test was implemented…
