Category Archives: Housing Costs

How Age is Impacting the Housing Market

It used to be that buying a home was a solid investment in your retirement. Simply purchase a fixer-upper, restore it to it’s former glory, incorporate some modern amenities, and presto-changeo: 20 years from now you’ve got yourself a nice, big next egg. However, things have changed, leaving many mature homeowners facing a frustrating reality.

According to the Bank of Montreal, about a third of Baby Boomers plan to sell their home to fund their retirement. Unfortunately, the questions remains as to whether or not there will be enough buyers capable of purchasing these properties as more and more seniors begin to downsize. An oversupply of houses could ultimately result in a price plunge, leaving many retirees high and dry. Continue reading →

Could Interest Rates Go Lower?

Interest rates have no where to go but up, right?

Maybe, but maybe not. Bank of Canada governor Mark Carney signalled last Tuesday that he’s still looking to raise the cost of borrowing “over time,” however, it appears to be an empty threat. The overnight rate has remained unchanged for months as Canadian home hunters continue to take advantage of a stable 1 percent borrowing rate.

In fact, some lenders are even considering dropping their mortgage rates below the current record lows. Rob McLister, editor of Canadian Mortgage Trends was quoted in the Financial Post insisting there is “no question rates [could] go potentially lower.”

While the prime rate tracks the overnight lending rate, it doesn’t limit how low banks can actually go with their mortgage products. Many mortgage brokers are also willing to cut their commission in order to buy down rates as they compete against larger lending source. If you’re currently on the market for a great rate, consider this: there are plenty of fix-year, fixed-rate closed mortgages available at 2.99 percent. Continue reading →

Explaining Foreclosures in Canada

Found yourself in a financially tough spot? Having trouble making your monthly mortgage payments? Be careful – foreclosure could be around the corner. While it is generally in the interested of both the bank and you, the borrower, to avoid foreclosure proceedings, sometimes there is no other option.

A number of things happen when a homeowner defaults on their mortgage. Of course, the first step is to try and get your mortgage payments back on track. If your financial problems are temporary, you might be able to arrange some concessions on your payment schedule. However, I wouldn’t hold your breath. If a resolution isn’t reached, the bank will take steps to recover their debt. The most common forms include a Power of Sale and a Judicial Foreclosure. Continue reading →

What if the Government Didn’t Back Mortgages?

Saving for a down payment on a home takes dedication, perseverance, and sacrifice. For many, it also takes a long, long time. According to a recent report from Rate Supermarket, come 2020 the average cost of a home in Canada will be $553,000. To accumulate a measly 5 percent down payment for such a home, recent graduates should expect to spend at least 12 years saving up. If you’re hoping to pack away 10 percent, prepare to squirrel away your savings for roughly 21 years.  Continue reading →

What To Do When Housing Prices Fall

It appears as though the seemingly infinite rise of Canadian housing prices has finally come to an end. After years of marvelling at record breaking list prices and historically low mortgage rates, the tides have finally shifted. Phrases like “cooling market” and “slow sales” are gracing national headlines, causing buyers and sellers alike to contemplate the repercussions.

If we’re to believe what the experts are saying, real estate in Canada has hit a tipping point. According to the Canadian Real Estate Association, sales are down a staggering 30 percent compared to last years numbers. What’s more, the average house price has dropped by roughly 3.5 percent since July.  Continue reading →