The Latest in Mortgage News: RBC downgrades its housing market forecast + MORE Jul 28th

Obtaining a mortgage or secured line of credit in Canada at the best rates is often a daunting task. We can help! Read the articles below for more info.
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5 surprises to avoid when switching mortgages before your term ends + MORE Jul 31st

These days, being a home owner with a mortgage can feel like you’ve ordered the chicken dinner before realizing there was a steak special. You orchestrate a last-minute switch before your meal arrives, and it’s only once your overcooked steak is served that you know you’ve made a mistake. .... More »

The Latest in Mortgage News: BoC’s Affordability Index reaches worst level since 1991 Aug 15th

Housing affordability deteriorated to its worst level in over 30 years, according to data from the Bank of Canada..... More »

Can I afford to buy a second home? + MORE Sep 26th

There are plenty of reasons you may want to buy a second home. Maybe you’d like a second property for a family member to live in (e.g., your daughter while she attends university) or a condo to stay in during the week when you’re working downtown. But can you afford it? “Before you buy.... More »

The latest in mortgage news: OSFI has no plans to loosen the stress test Sep 17th

Despite today's mortgage borrowers having to qualify at rates in excess of 6% and 7%, Canada's banking regulator said no changes to the stress test are imminent..... More »

Lauren van den Berg named new MPC CEO + MORE Aug 12th

Mortgage Professionals Canada announced today that Lauren van den Berg will take over as President and CEO of the association starting next month. Van den Berg will fill the position left vacant by former MPC CEO Paul Taylor. The change in leadership comes as the association recently achieved the mi.... More »
I would like to know if transferring our home into our daughter’s name—can we stay and pay rent and get a rental home credit? Is it valid?—Satyesh

Tax credits when renting property from a family member

There is a lot to unpack with your question, Satyesh, but I will address your direct question right off the bat. 

If you rent real estate from a family member, if you both treat it as a legitimate landlord-tenant relationship, you may be able to claim a tax credit just as if you were renting from a third party.

Ontario has an energy and property tax credit, Quebec has a solidarity tax credit, and Manitoba has a residential renters tax credit. Each of these has a rent component and may result in tax savings for lower income taxpayers. 

Your daughter would report the rental income and deduct applicable expenses like property taxes, insurance, utilities (if she pays them) and mortgage interest (if applicable). It bears mentioning that she may end up paying more tax on the net rental income than you would save on the tax credit…

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RBC says it expects the country’s housing correction to “deepen” in the coming months with resale activity and prices falling more than expected.

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Thanks to the mortgage stress test, many now have to qualify at 7% — but is there a way around that?One option to help you pass the mortgage stress test, experts say, is to opt for a variable rate loan which favours borrowers. But there are downsides to that strategy.

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Earlier this month, Rocket Mortgage U.S. announced its plans to enter the Canadian market. What does this mean for mortgage brokers and mortgage consumers?

Continue Reading On canadianmortgagetrends.com »

Variable Rates Go Up, Fixed Rates Come DownIf you’re reading this, you probably know by now: the Bank of Canada has been raising their benchmark rate aggressively to battle inflation. And I mean aggressively. Their rate has gone up by 2.25% in 6 months which is absolutely – wait for it – unprecedented.

As a result, variable rates have shot up. Everyone expected fixed rates to follow suit – but interestingly enough, the opposite has happened. They’ve actually gone down. Yup, you read that right: while variable rates are going up, fixed rates are going down.

How Is That Possible?

Fixed rate mortgages are priced against 5-year bond yields. The yield rate reached a high of 3.59% on June 14th. Only a month and a half later, that rate is now hovering around 2.82%. What does this tell us? Fixed rates are based on speculative factors. Investors anticipated rate hikes 6 months ago and priced them in early. Now, we’re on the other side.

Not long ago, most 5-year fixed rate mortgages were hovering at around 5…

Continue Reading On canadamortgagenews.ca »

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