Mortgages in Canada can be a murky subject – one that we hope to shed some light on with a series of highly informational articles.
Needless to say, building your dream home involves a lot more work as opposed to buying a ready-build – it’s more than just drawing floor plans and picking out counter finishes. Buying a piece of land and constructing your own home from scratch also requires you to get a different type of mortg.... More »
Starting in 2017, the Canada Mortgage and Housing Corporation (CMHC) has been making both special and regular dividend payments to its shareholder, the Government of Canada. The largest sum was for $4-billion in June 2017, which was spread over two years. At that time they announced the impl.... More »
The stress test is back in the crosshairs of industry analysts. Earlier this week, CIBC World Markets Deputy Economist Benjamin Tal released a report that attributed an 8% drop in mortgage originations from 2017 to 2018 directly to the federal government’s stress test rules (B-20), which took .... More »
Looking at mortgage rates for a new house? Need a mortgage calculator? Canada residents know it’s easy to fall in love with your dream home. But, it helps to factor in the mortgage loan amount and interest rate beforehand. You want to determine how much house you can afford - p.... More »
Banks offer a variety of products to give you access to cash. But is every borrowing option the same? If you’re weighing the alternatives, you may struggle with the choice between a loan and line of credit. Only you can decide what’s best for you, but there are some factors to consider..... More »
Motusbank, a subsidiary of Meridian Credit Union, has launched in Canada. First announced in February, a full range of banking and borrowing services are now available on its website, motusbank.ca.
As an online-only bank, Motusbank can be accessed via its mobile app on the Apple App Store and Google Play. App users can check balances, transfer funds, and deposit cheques; Apple Pay and Google Pay, however, are not supported. Statements and other documents are available only on desktop.
The main appeal of Motusbank lies in its competitive mortgage rate and simple online application. Fixed-rate mortgages are available with terms ranging from six months to five years; variable-rate mortgages all have five-year terms. The bank is currently advertising a 3.09 percent interest rate for closed fixed-rate mortgages with terms ranging from one year to five years; the same rate also applies to its closed variable-rate mortgages.
Given the current crop of online-only banks, which offer many of the same services and advantages, Motusbank is making a direct play for home buyers who are shopping for the lowest rates and don’t want to spend time haggling…
Taking on a “Fraction” of the Cost; Vancouver Start-Up Promises a Better Incentive for Home Buyers than CMHC
An incentive for first-time home buyers offered through the Canadian Mortgage Housing Corporation (CMHC) was only announced a week ago, promising to provide $1.25 billion over three years to help lower mortgage costs for eligible Canadians.
However, a new company is now also promising to provide an alternative form of relief for potential home buyers.
If a home buyer chooses to work with Fraction, the Vancouver-based start-up says it will take up to a 40 percent stake in the buyer’s property, securely reducing mortgage payments by up to 35 percent.
Since Fraction is putting up 40 percent of the purchase price, the home buyer is then only required to take out a mortgage for the remaining 60 percent.
“It’s almost like selling shares in a home,” said Fraction’s Chief Technology Officer Josh Baker, as you’re essentially selling equity in your home and paying it back to Fraction upon resale at its future value.
For instance, if your home is worth $500,000 and you want to sell 40 percent of your property, Fraction will take on that $200,000 share…