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TagMortgage Financing

Posted Bank News

The Great Mortgage Reset

A FOUR PART SPECIAL EDITION… PART 2 of 4

Canada’s mortgage lending rules and policies are broken.  They just don’t work.  And the more our Federal government tries to help, the worse it gets.  This is a 4 part series of what our government can do to make home ownership affordable.

IDENTIFY THE PROBLEMS.

1. QUALIFYING IS TOUGHER THAN EVER BEFORE

    Canadians can’t afford to buy or rent a home due to the high monthly cost. Home prices and rental rates have exploded! No surprise there.  

    Simple math.. Even a below average home, let’s use a $500,000 mortgage @ 4.69% will cost you $2,820/mth.  Add in property taxes, home insurance and

    Continue reading “The Great Mortgage Reset”
    The State of Homebuying in Canada 2019 CMHC Mortgage Consumer Survey
    Posted 2 Comments on Significant decrease in first time home buyers in 2019 Mortgage News

    Significant decrease in first time home buyers in 2019

    Canada Mortgage and Housing Corporation released The State of Homebuying in Canada report on November 15, 2019, with a few key findings, including this headline. 

    The annual State of Homebuying in Canada report noted that 56% of all purchasers were first time buyers in 2018. This dropped to 47% in 2019.

    The tightening of mortgage rules which has been taking place over the last 4 years is certainly having an effect. The never ending rule changes were intended to slow home sales and prices. But like most government interventions, its had the opposite effect.

    Continue reading “Significant decrease in first time home buyers in 2019”
    Important week for mortgage rates
    Posted Interest rates

    Important week for mortgage rates could cost or save you thousands.

    Important week for mortgage rates

    Mortgage rates fell by about 1% since January of this year. That rate drop has created a surge in real estate sales across Canada, with September and October seeing a greater than average number of real estate transactions.  We also saw consumers taking advantage of these low rates by refinancing their mortgages early.

    The Five-Year Government of Canada bond yields have been going up and down like a yo-yo over the last three months, with a low point being 1.13% and a high of 1.58% just this past week. This uncertainty/volatility forced financial institutions to raise their interest rate by about .2% to .3%.  Having said that, interest rates are still very low. In my discussions with the major lenders, they are all telling me that it’s busier than usual for home purchases and refinance purposes. Continue reading “Important week for mortgage rates could cost or save you thousands.”

    Why didn't the Bank of Canada Gov cut rates last week
    Posted Bank News

    Why didn’t the Bank of Canada Gov cut rates last week?

    Why didn't the Bank of Canada Gov cut rates last week

    WAS THIS A BIG MISTAKE?

    Last week, Stephen Poloz, the Bank of Canada Governor, kept the Prime Rate as is during the 6th of their eight scheduled meetings for 2019.  The Current Target rate is 1.75%.  (Bank Prime rate is derived from this rate.  Today’s Bank Prime rate is 3.95%.  Over 99% of time, when the Target Rate is cut, the Banks will reduce the Bank Prime Rate by an equal amount).

    This was a very calculated decision that has politics written all over it.  While the rest of the world banks have been cutting rates to combat a looming recession due to growing global trade wars and slowing global economies, our Government did nothing.  Apparently, the Canadian economy is ‘resilient’.  The next Bank of Canada meeting is set for October 30, 2019.  Oh, and there’s a Federal election on Oct 21, 2019.  Yeah, this has politics written all over it.

    WHAT YOU SHOULD KNOW ABOUT MORTGAGE RATES TODAY.  Continue reading “Why didn’t the Bank of Canada Gov cut rates last week?”

    New First Time Home Buyer Incentive Happy Couple Buying New Home Gets Key From Builder
    Posted 1 Comment on New First-Time Home Buyer Incentive.. the quick facts. Mortgage News

    New First-Time Home Buyer Incentive.. the quick facts.

    New First Time Home Buyer Incentive Happy Couple Buying New Home Gets Key From Builder

    The First-Time Home Buyer Incentive (FTHBI) program is a Shared Equity plan that came into effect Sept 2nd (just before an election, what coincidence).  The program was created to stimulate new home construction and to fill a lack of housing supply.

    Here are the quick facts about the program and how you can actually qualify.  Spoiler alert, this program isn’t for everyone, and actually, it’s going to be more relevant for smaller cities and towns where home prices are below $500k.  Still, it’s worth reviewing to see if you do qualify… Continue reading “New First-Time Home Buyer Incentive.. the quick facts.”