Category Archives: Housing Costs

New Barriers for First-time Home Buyers

It’s no secret that the residential real estate market relies on a steady stream of first-time home buyers. A constant and consistent demand from young buyers is what keeps housing prices from declining.

Unfortunately, new mortgage rules are making it harder for cash-strapped buyers to qualify for current real estate prices. In a logical economy, housing prices would have to drop in order for new home buyers to handle the restrictions. But as we all know, things are rarely rational when it comes to the economy. Continue reading →

Why You Need an Emergency Fund When Buying a Home

You wouldn’t go skydiving without a parachute, or walk across a tightrope without a safety net, yet thousands of people buy homes in Canada each year without an emergency fund safely tucked away in the bank. When you take out a mortgage with no savings, you’re flirting with disaster. An unexpected job loss, drop in income, home repair, medical situation or divorce could spring up out of nowhere, causing you irreversible financial strife. No one every expects this kind of misfortune, but that doesn’t mean you shouldn’t prepare for it. It’s always better to be safe than sorry, especially when it comes to your finances. A cushion of at least three months living expenses is just the start. Continue reading →

Bank Holds Overnight Rate at One Percent

The overnight rate held steady yesterday as the Bank of Canada announced that it would maintain its traget of 1 percent. This leaves the prime lending rate at 3 percent. It’s now been more than two years since the prime rate has increased, giving variable rate mortgage holders the upper hand on higher interest costs. Continue reading →

How To Save For Your Down Payment

According to a recent TD Canada Trust survey, nearly 60 percent of Canadians were disappointed in the size of their down payment. These findings aren’t all that surprising; in a world of record-setting consumer debt, slim savings and lacklustre investment returns, saving for a sizeable deposit can seem like an exercise in futility. And yet, the bigger your down payment, the less interest you’ll pay, the easier it will be to refinance and you’ll enjoy lower mortgage fees. Continue reading →

Toronto and Vancouver Markets Begin to Cool

Home sales in Canada’s two hottest markets, Toronto and Vancouver, have already begun to cool thanks to new mortgage rules. According to the Toronto Real Estate Board, July home sales in the city slipped 1.5 percent compared to a year ago. Properties in Vancouver dropped 11.2 percent from June.

Concerns about a bubble in both communities had been mounting since 2011. Recent changes to mortgage legislature has effectively slowed demand in both markets; Vancouver’s market posted a 10-year low in sales, while Toronto’s numbers were down 21 percent in the second quarter from one quarter earlier (source: Urbanation Inc.). Continue reading →