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
 secure line of credit

Mortgage up for renewal? Read this first + MORE May 9th

New mortgage rules and higher interest rates may make it more difficult for you to renew your mortgage..... More »

CMHC moves to make it easier for self-employed to get a mortgage Jul 23rd

Self-employed Canadians seeking to buy a home may soon find it easier to secure a mortgage in the wake of changes announced by Canada Mortgage and Housing Corp..... More »
 mortgage buyout

What the Bank of Canada Rate Increase to 1.5% Means for Canadian Home Owners and Home Buyers + MORE Jul 17th

From personal loans to mortgages, simply put, it’s now more expensive and more difficult for Canadians to borrow money. At the beginning of 2018, new mortgage rules raised the bar for qualification.  Under federal law, all financial institutions are now required to put any new applicants under a.... More »
 line of credit

Mortgage borrowing slides to lowest since 2014 + MORE Jun 14th

Canadian mortgage borrowing over the first three months of 2018 fell by $2 billion to $13.7 billion — the lowest level since 2014 — following the introduction of new lending rules and a rise in interest rates..... More »
mortgage

The Run Down on Reverse Mortgages: What Are They and Why Do Home Owners Get Them? + MORE Jun 17th

Although it may seem like a complicated or paradoxical concept, the features that make up a reverse mortgage are rather simple. A reverse mortgage is a home equity product that allows home owners aged 55 years and older to access up to 55 per cent of the value in their home. Home owners can choose .... 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!