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Latest News
“Should we refinance our mortgage?” + MORE Dec 23rd
We’re thinking about breaking our existing home mortgage to take advantage of low interest rates and would appreciate some guidance. This is our scenario:
Mortgage principal: $572,000Weekly payments: $746.00Interest rate: 3.78% fixed and locked in until December 2024Penalty fee for breaking mor.... More »
House rich: How to access the equity in your home Nov 16th
With the national average home price up a record 18.5% in August 2020 compared to the same time last year, more Canadians than ever have a significant portion of their wealth tied up in their homes.
Who are these “house rich” homeowners? They range widely—from retirees on a fixed income, to ba.... More »
External Factors a Wild Card in GTA Housing Market Forecast Oct 1st
Among external factors that affect housing markets, two are by far the most important and both are more or less directly controlled by the federal government. The first is policy regulation that defines the rules and parameters under which mortgage loans can be originated. The second is the interest.... More »
How Canada’s Mortgage Lenders Adapted to the ‘New Normal’ Dec 14th
The COVID-19 pandemic and the resulting nationwide lockdown forced the country’s mortgage lenders—like many businesses across the country—to adjust their operations in this unprecedented and brave new world of conducting business. They were faced with keeping the country’s mortgage de.... More »
How the Bank of Canada’s benchmark rate impacts your finances + MORE Mar 7th
The Bank of Canada (BoC) held its benchmark interest rate at 5% on March 6, marking the fifth consecutive time it has left the rate unchanged. Economists widely expect the BoC to lower its rate at some point in 2024, as inflation falls and the Canadian economy weakens. However, in its March rate ann.... More »
Solving Canada's National Housing Crisis Begins At Home
– walletpop.ca
Canada has recently been held up as a shining example of a progressive nation. Just while countries across the Atlantic and south of the border appear to be adopting a more closed door attitude, Canada is forging ahead with inclusive policy and getting recognition for doing what’s right.
This positive momentum places even greater emphasis on an issue that challenges Canada — we are on the verge of a looming housing affordability crisis that comes with dire socio-economic implications for all Canadians if left unchecked.
Over the next three to five years, the bulk of government operating agreements that provide subsidies to co-operatives, non-profit and public housing providers to house more than 540,000 families will come to an end, dramatically affecting many of these families.
According to the Canada Mortgage and Housing Corporation, 12.5 per cent of all Canadian households experience an affordability crisis every day. That will drastically increase as operating agreements conclude…
Mortgage insurance changes will impact buyers
– moneysense.ca
Mortgage lenders don’t carry enough of the risk of insured mortgages and, as of today’s announcement, this could soon change.
In an effort to reduce the risk to taxpayers, Finance Minister Bill Morneau introduced changes to mortgage insurance rules that will impact both home buyers and banks.
At present, lenders are required to obtain mortgage loan insurance for any high loan-to-value mortgage—a loan where the homebuyer’s down payment or equity in the home is less than 20%. It’s pretty much an industry standard for lenders to pass on the cost of this mortgage insurance to homebuyers.
Ottawa closes foreign buyer tax loophole »
However, lenders can also opt to pass on the risk of a mortgage to taxpayers by paying for mortgage loan insurance, even when the downpayment or the equity in the home is greater than 20%. The insurance is bought and paid for by the lender as it helps defray the downside risk of mortgaging a more expensive property.
However, since last November, the Department of Finance acknowledged that it was examining the impact of shifting more of the risk of insured mortgages onto the banks and mortgage lenders…
In an effort to reduce the risk to taxpayers, Finance Minister Bill Morneau introduced changes to mortgage insurance rules that will impact both home buyers and banks.
At present, lenders are required to obtain mortgage loan insurance for any high loan-to-value mortgage—a loan where the homebuyer’s down payment or equity in the home is less than 20%. It’s pretty much an industry standard for lenders to pass on the cost of this mortgage insurance to homebuyers.
Ottawa closes foreign buyer tax loophole »
However, lenders can also opt to pass on the risk of a mortgage to taxpayers by paying for mortgage loan insurance, even when the downpayment or the equity in the home is greater than 20%. The insurance is bought and paid for by the lender as it helps defray the downside risk of mortgaging a more expensive property.
However, since last November, the Department of Finance acknowledged that it was examining the impact of shifting more of the risk of insured mortgages onto the banks and mortgage lenders…
No more discounts for fixed-rate mortgage borrowers
– moneysense.ca
Applying for a new mortgage won’t be so easy after today’s announcement by Federal Finance Minister Bill Morneau. That’s because anyone looking to buy a home will have to qualify for that new mortgage based on posted rates, not discounted rates.
As MoneySense reported in June, up until now, homebuyers could skirt the rules if they opted for a five-year fixed rate. Rather than qualifying for the higher, posted rate, these buyers could qualify for the loan based on the much lower discounted rates, explained Calum Ross, a Toronto-based independent mortgage broker, who works with high net worth clients as a dually licensed wealth advisor (with his MBA) and mortgage broker.
How this loophole helped homebuyers
Under current Canadian mortgage qualification rules, home buyers can only get a mortgage if their debt-ratios show that they can make payments based on the Bank of Canada’s qualifying rate. This mortgage qualifying rate (MQR) is based on the posted five-year fixed rate and in 2015, it hovered around 4…
Is This the Last Nail in the Coffin?
– canadianmortgagetrends.com
The Feds clearly wanted to crack the housing market, and they may have finally done it, with a sledgehammer. New Department of Finance (DoF) rules will hit the mortgage market hard, but consumers will take the brunt of the blow. The two big changes: 1) Effective Oct. 17, the qualification rate will now apply to all insured mortgages (even high- and low-LTV 5-year fixed terms, which is not the case today). 2) Regulators are banning a wide array of mortgages from being insured, effective Nov. 30. One big non-bank lender didn’t mince words when describing today’s DoF’s announcement. “This is a crisis,” the executive told CMT. The lender estimates that READ MORE
Ottawa has announced new rules aimed at limiting foreign money into Canadian real estate and ensuring that borrowers take on mortgages they can afford.
