Should you break your mortgage? + MORE Dec 20th

Joakim Tjernell was pretty proud of himself—he’d done a damn good job of shopping for a mortgage. It was back in June of 2009 and Tjernell, a translator in his 30s, had been eyeing units in a slick modern condo building on Toronto’s Bathurst Street for a while. There was a lot of paperwork—Tjernell’s wife is a freelance graphic designer, so they had to prove that she had regular income. “This was the first time we had a mortgage, so we were nervous about getting approved,” he recalls.

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But not only were they approved, their mortgage broker came through with a great offer on a variable-rate mortgage from Scotiabank. The $280,000 loan had a 25-year amortization and a floating rate of just 2.90% to start. Tjernell was sure he’d bagged a deal…

As part of its annual review of the stress test for uninsured mortgages, the Office of the Superintendent of Financial Institutions today confirmed the minimum qualifying rate will remain at 5.25%. That means borrowers making a down payment of 20% or more will need to prove they can afford payments based on their contract rate plus 2% or 5.25%, whichever is higher. Currently, about 90% of mortgage borrowers are being qualified at the 5.25% minimum qualifying rate (MQR) rate as […]

In a red-hot real estate market, a little help with the down payment on a home can go a long way—especially when you’re a first-time buyer without the advantage of equity in an existing property. So when the Canadian federal government decided, in 2019, to begin offering first-time home buyers down payment assistance under the First-Time Home Buyer Incentive (FTHBI), it seemed eligible buyers were in for a bargain.

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Before you begin a Whatsapp chat with your real estate agent and start browsing available listings, there are a few things you should know about the FTHBI. First, not everyone qualifies, since the program is limited to a specific subset of first-time homebuyers. Second, the incentive is not free money, but a form of loan from the Government of Canada which will eventually need to be paid back, possibly at a large premium…