18 Jan

The Bank of Canada Raises its Key Interest Rate

General

Posted by: Anne Martin

On Wednesday January 17, 2017, as expected, the Bank of Canada raised its key lending rate by one quarter point to 1.25%.  This would put the rate at the highest level since 2009 when the economy was faltering.  This was done even with the cloud looming over NAFTA negotiations.

Economists differ as to the validity of the increase.  We are hearing reports of the economy being in excellent shape with the lowest jobless numbers in decades but according to other economists predictions we may be heading for a slow down in housing markets due to interest rate increases and tougher mortgage rules that could take many prospective home owners out of the market.  Higher interest rates may amplify household debt or perhaps people will buy less and within their means, causing a reduction in consumption, which again is not good for the economy.

My gut says that there has to be a happy medium somewhere between consumerism and debt management where we can spend enough to keep the economy moving but not too much to put ourselves in too much debt.

We are expecting three rates hikes this year causing the overnight rate to increase to 1.75%.  Many lenders have already increased their prime lending rate to 3.45% increasing variable rate mortgages.  If you are in a variable rate mortgage, this is a good time to discuss your options with a broker.

As always, I’m still seeing people who want to consolidate their debt into their mortgages in order to reduce interest costs and improve cash flow.  I don’t think there will be an end to this option, especially if you have lots of equity in your home.

In my opinion, we are still in great shape. To put today’s rates in perspective, interest rates climbed to 21% in the early 1980s.  We are lucky to be living in a country where our government, no matter the party, is looking out for our interests to ensure this doesn’t happen again.

For more info on the rise in Bank of Canada rates check out this article by Dr. Sherry Cooper, economist Dominion Lending Centres.  https://dominionlending.ca/news/bank-canada-raises-rates-cautiously/

4 Jan

2018 might just be the year to buy a home! Mortgage Market Update

General

Posted by: Anne Martin

MARKET UPDATE

2018 might just be the year to buy a home!  Canada’s real estate market is bound to take a hit this year thanks to the government’s new mortgage rules that took effect on January 1st.

The rules, aimed at making sure Canadians can afford to meet their monthly mortgage payments if interest rates rise, will intentionally make it harder for buyers to qualify for an uninsured mortgage.

Read more

Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
This is a critical time to sit down and review your household financing needs. Please do not hesitate to contact me should you have any questions.

If you are in the market for a home, book an appointment today to see how the recent regulatory changes by the Office of Superintendent of Financial Institutions will affect your purchase.

**rates subject to change with market conditions – *OAC  **conditions apply E. & O. E.

Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.89%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.99%
4 YEARS 3.89% 2.89%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.69%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE
 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”

 

1 Dec

Why are longer amortizations taking over? Read Mortgage Market Update December 2, 2018

General

Posted by: Anne Martin

30-year mortgage amortizations are taking over: Four reasons why

Once upon a time, 25 years was the standard amortization on a Canadian mortgage.

Today, no less than 63 per cent of new low-ratio mortgages by value, have amortizations over 25 years. That’s a surge of 11 percentage points in just two years.

Meanwhile, six in 10 Canadians consider longer amortization periods “bad debt practice,” according to a recent survey by Manulife Bank.

The maximum amortization for a mortgage in this country is generally 35 years, although some non-prime lenders will do 40 years.

So why are so many people extending their amortization when the majority deem it inadvisable?

Find out why…

Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
This is a critical time to sit down and review your household financing needs. Please do not hesitate to contact me should you have any questions.

If you are in the market for a home, book an appointment today to see how the recent regulatory changes by the Office of Superintendent of Financial Institutions will affect your purchase.

**rates subject to change with market conditions – *OAC  **conditions apply E. & O. E.

Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.89%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.89%
4 YEARS 3.89% 2.89%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.69%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE
 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”
24 Nov

Will OSFI regulations really strip consumers of choice? Mortgage Market Update Nov. 24, 2017

General

Posted by: Anne Martin


 

Will OSFI regulations
really strip consumers of choice?

The Office of the Superintendent of Financial Institutions has been repeatedly excoriated by mortgage industry veterans for its intervention, but not everybody believes the lending regulations will spell doom and gloom.

Read More…

Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials

This is a critical time to sit down and review your household financing needs. Please do not hesitate to contact me should you have any questions.

If you are in the market for a home, book an appointment today to see how the recent regulatory changes by the Office of Superintendent of Financial Institutions will affect your purchase.

**rates subject to change with market conditions – *OAC  **co

Conditions apply E. & O. E.

Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.89%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.89%
4 YEARS 3.89% 2.89%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.44%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE
10 Nov

B20 Demystified. Mortgage Market Update November 10, 2107

General

Posted by: Anne Martin

MARKET UPDATE
B20 DEMYSTIFIED  The office of the Superintendent of Financial Institutions (OFSI) announced some regulatory changes on October 17, 2017. There were 3 changes announced, but it was the introduction of a qualifying rate stress test to all non-insured mortgages that will have the most impact on consumers.Home Buyers with a down payment of 20% or more must now qualify at a new minimum qualifying rate, which is the greater of the five year Bank of Canada Benchmark rate or the lender contractual rate +2%

What does this mean?

The biggest impact will be on the amount in which the homebuyer will be able to qualify. For example, if a homebuyer needs a $400,000 mortgage, has 20% down payment and a 25 year amortization, here is the difference:

Actual Rate to be Paid:            To Qualify:
Mortgage Amount $400,000 Contract rate 3.49%  The greater of the two: 4.99%, the current BOC Benchmark Rate OR 3.49% contract rate + 2%,WHICHEVER IS HIGHER = 5.49%
Monthly Payment for Debt Ratio Qualification $1994.98   $2439.24
Minimum Income Requred to Qualify $76,724.12   $90,052.14

E & OE – rates shown are subject to changing market conditions and OAC

To recap:

Uninsured Mortgages- Homebuyers/owners will now have to qualify for a mortgage using the benchmark rate, which is the Bank of Canada rate (currently 4.99%) or the lender rate + 2%, whichever is greater.

Insured Mortgage- Homebuyers must qualify using the Bank of Canada Rate (again, currently 4.99%). This came into effect in 2016 and has not been affected by the recent rule changes.

Can you still refinance your home? – yes. Homebuyers still can refinance up to 80% of the value of the property but the new stress test applies.

What if you have a contract written prior to October 17, 2017? – This depends on the lender. Some lenders will use current rules up to January 1, 2018. Others will implement the necessary changes before this deadline.

Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
This is a critical time to sit down and review your household financing needs. Please do not hesitate to contact me should you have any questions.

If you are in the market for a home, book an appointment today to see how the recent regulatory changes by the Office of Superintendent of Financial Institutions will affect your purchase.

**rates subject to change with market conditions – *OAC  **conditions apply E. & O. E.

Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.89%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.64%
4 YEARS 3.89% 2.84%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.44%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE
 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”
3 Nov

Are you prepared for the next round of new mortgage rules?

General

Posted by: Anne Martin

Anyone who has 20% or more equity in their home or planning to use more than 20% down payment on a home purchase after January 1, 2018, may qualify for a smaller mortgage than they did before that date.  This is a result of the latest changes in mortgage rules determined by the Office of the Superintendent of Financial Institutions (OSFI).

The governments new stress test will apply to all federally regulated banking institutions and will affect all conventional mortgages (more than 20% down payment or equity), including refinances, renewals and purchases.  If you are buying a home using less than 20% down payment, you will still pay mortgage default insurance(CMHC, Genworth or Canada Guaranty)  and qualify at the benchmark rate, currently 4.99% for most institutions.

No need to panic regarding your mortgage renewal.  You won’t have to requalify at renewal time unless you make changes, such as moving it to another institution or increase the amount, etc.  If you don’t qualify, your only choice may be to keep what you have and accept whatever is offered by your current lender.

At this time, it appears that provincially regulated financial institutions are not included.  ie credit unions.

It appears that applications submitted to lenders prior to January 1, 2018 will be honored under the old rules.  We are still waiting for further clarification from the government.

An important point is that many lending institutions have begun implementation early as requested by OSFI.

These changes may also greatly affect debt consolidations considering that you may not be able to refinance your home for as much as needed to pay out those high interest rate loans as you would presently be able to.

If you are considering a mortgage refinance, debt consolidation or purchase, you should consider talking with a mortgage professional as soon as possible.

Robert McLister of Ratespy wrote an excellent article in the Globe and Mail explaining further.  Please see the attached. Preparing for OSFI

 

2 Nov

New mortgage rules heat up Toronto. Mortgage Market Update November 2, 2017

General

Posted by: Anne Martin


New mortgage rules expected to heat up Toronto housing before winter chill    The sales slump in Toronto real estate is persisting into the fall, but average annual prices across the region are holding up thanks to double-digit price gains in the condo sector.      Find out more


Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
This is a critical time to sit down and review your household financing needs.  Regulatory changes may have a direct impact on your ability to refinance your mortgage or purchase a home. Please do not hesitate to contact me should you have any questions.

If you are in the market for a mortgage, contact me today to see how the recent regulatory changes by the Office of Superintendent of Financial Institutions will affect your purchase.

**rates subject to change with market conditions – *OAC  **conditions apply E. & O. E.

Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.89%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.64%
4 YEARS 3.89% 2.84%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.44%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE

 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”

Check with your Dominion Lending Centres Mortgage Professional for full details and to determine what rate will be available for you.

20 Oct

What do these new mortgage rules mean?

General

Posted by: Anne Martin

Effective January 1, 2018 the Office of the Superintendent of Financial Institutions will require tough new mortgage rules for home buyers and mortgage refinances.  These guidelines will have a significant affect on mortgage qualification for anyone purchasing with more than 20% down or in the case of a refinance, more than 20% equity in their home.

At this time, it is not known how this will affect credit unions as they are regulated differently.

The main focus of these changes will be –

• the minimum qualifying rate for uninsured mortgages
• expectations around loan-to-value (LTV) frameworks and limits
• restrictions to transactions designed to work around those LTV limits.

Geoff Lee – mortgage agent with Dominion Lending Centres explains it in laymans terms.  Click here.

18 Oct

Canadian Bank Regulator (OSFI) announces new mortgage lending rule changes.

General

Posted by: Anne Martin

MARKET UPDATE

Ten ways the new mortgage rules will shake up the lending market

T-minus 76 days (January 1st, 2018 and counting until Canada’s banking regulator launches its controversial mortgage stress test.

It’ll be squarely aimed at people with heavier debt loads and at least 20 per cent equity – and it will be a tide turner.

Find out more

This is a critical time to sit down and review your household financing needs.  If  you are considering a mortgage refinance, it is of the utmost importance to seriously discuss your plan to close prior to January 1.   Please do not hesitate to contact me should you have any questions.


Best fixed rates are as low as *2.84 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
If you are in the market for a home, book an appointment today to see how these changes affect your purchase.

**rates subject to change with market conditions – *OAC  **conditions apply E. & O. E.


Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.79%
2 YEARS 3.24% 2.54%
3 YEARS 3.44% 2.64%
4 YEARS 3.89% 2.84%
5 YEARS 4.99% *2.84 – 3.49 %
7 YEARS 5.30% 3.44%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE

 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”

6 Oct

How will upcoming new mortgage rules impact you?

General

Posted by: Anne Martin

MARKET UPDATE

Tougher mortgage rules would cause ‘substantial damage,’ says broker

In response to an open letter to the Prime Minister and Finance Minister asking them to reconsider the recent rule changes that have affected the vast majority of Canadians when it comes to qualifying for a mortgage, the Toronto Star has published this article expanding further on the impact on Canadians.

Read here


Best fixed rates are as low as *2.89 – 3.49 % for a 5 year fixed,
variable rate mortgages from as low as p-.85%
Prime Rate is 3.20%

*High Ratio/Quick Close Specials
This is a critical time to sit down and review your household financing needs. Please do not hesitate to contact me should you have any questions.

If you are in the market for a home, or need to refinance in the next year, it is really important to make an appointment today to find out how these changes may affect you.

**rates subject to change with market conditions –                          *OAC  **conditions apply  E. & O. E.


Terms Bank Rates Our Rates
6 Month 3.14% 3.10%
1 YEAR 3.04% 2.79%
2 YEARS 3.04% 2.54%
3 YEARS 3.44% 2.64%
4 YEARS 3.89% 2.94%
5 YEARS 4.94% *2.89 – 3.49 %
7 YEARS 5.30% 3.39%
10 YEARS 6.10% 3.74%
Rates are subject to change without notice. *OAC E&OE

 **Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.”