Packing Less Punch: Millennials’ Home Purchasing Power Drops by $40K due to New Stress Test Rules + MORE May 6th

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

Should You Be Paying Your Mortgage Down Aggressively? May 12th

Last year a third of mortgage holders in Canada chose to pay their mortgages aggressively, which is to say they paid more than the amount required. And the numbers were higher for those who bought their properties after 2013. Instinctively it would make sense to pay off your mortgage as quickly as y.... More »

The Latest in Mortgage News – House Prices Under the Microscope May 27th

For homebuyers and homeowners alike, all eyes have been on the housing market in recent months waiting to see where house prices are eventually headed. With house prices already cooling on average across the country, particularly in and around the Greater Toronto Area, some are speculating that the .... More »
 secure line of credit

Banks cutting variable mortgage rates to drum up business even as fixed rates rise + MORE May 18th

A number of Canadian lenders have slashed their variable mortgage rates in recent days, even as some of those same lenders are raising their fixed-rate mortgages..... More »

Stress Test Causing National Housing Slump: CREA May 21st

The Canadian Real Estate Association (CREA) blames the mortgage stress test introduced in January for slow activity across the nation in April. The housing market has cooled in all respects from April of last year, when the market peaked: the average sale price declined by 11.3 per cent to $495,000,.... More »
Packing Less Punch: Millennials’ Home Purchasing Power Drops by $40K due to New Stress Test Rules
Millennials looking to purchase new property across Canada this year are going to have to settle for less. The average peak millennial’s purchasing power in Canada is 16.5 per cent lower than it was at this time last year, meaning they qualify for a mortgage of about $40,000 less than before.
The finding comes from Royal LePage, which put out a study last week looking at how purchase power for millennials took a hit after the recently introduced OSFI stress test regulations. For the purpose of this study, Royal LePage focused on “peak millennials” – a term used to describe the largest cohort of millennials, born between 1987 and 1993, and their potential purchasing power.
“For peak millennials, the group which makes up the bulk of our first-time homebuyers, the path to property ownership has been a challenging one. In our largest cities, it is difficult for young people to purchase a home on a single household income,” said Phil Soper, president and CEO of Royal LePage…

Continue Reading On ratesupermarket.ca »

TD & RBC raised the POSTED rate… but not their REAL rates
Much has been written about last week’s Posted rate hikes by TD and RBC. Don’t panic! This is just their posted rate – it’s not the actual rate they give to clients.
I do, however, think we’ll see a minimal rate hike in the coming weeks due to five-year Government of Canada bond yields increasing slightly. Fixed rates are priced closely to bond yields.

Here’s another piece of info the banks don’t want advertised: Last week, I published an article about Inflated Mortgage Penalties and how the BIG SIX BANKS use an unfair formula to calculate your penalty.
Good timing. The next day, these two banks did what I reported. They’re registering a larger rate discount, which will end up costing you a higher penalty if you need to break your mortgage early!
MY ADVICE…
I’ve been advising my clients to go variable – especially if you’re with a BIG SIX BANK.  Your penalty will always be capped at three-months’ interest, which is much better than a potential, 10, 12 or even 14-months’ penalty! Yup, that’s right, banks have charged many borrowers outrageous penalties that have cost $10,000, $20,000, $30,000 or more…

Continue Reading On canadamortgagenews.ca »

Share

PinIt
Compare insurance quotes through Kanetix.ca - save time and money!