Category Archives: Housing Costs

CMHC Responsibility Changes Hands

Concern over a red-hot housing marketing and increasing consumer debt has prompted Finance Minister Jim Flaherty to make some drastic changes this week. On Thursday, Minister Flaherty announced that responsibility for the Canada Mortgage and Housing Corporation (CMHC) will be handed over to the Office of the Superintendent of Financial Institutions, the nation’s banking regulator.

It’s unclear how the change will impact the market. While some believe that new oversight will help halt skyrocketing real estate prices in Toronto, some experts anticipate very little change. Flaherty made it overtly clear that his main reason for tabling the bill was concern over the Toronto condo market. Designed to discourage high-risk borrowing, the new regulations would put the OSFI in charge of reviewing and monitoring CMHC’s commercial activities. The agency was previously monitored by Human Resources Minister Diane Finley. Continue reading →

REITs – How They’re Changing the Face of Real Estate

The Financial Post recently reported that Canadian real estate investment trusts (REITs) have rallied to the highest levels in five years, and that’s despite Finance Minster Jim Flaherty’s constant threat of increased interest rates.

So, just what is a real estate investment trust and how can it impact your best mortgage rate search? Let’s take a look. Continue reading →

Subprime Problems on the Horizon?

A hot housing market is pushing borrowers farther and farther away from mainstream financing and it’s causing quite the stir in the Canadian subprime mortgage industry. The source of the excitement? A growing pile of mortgage debt that’s coming from outside of Canada’s big six banks. Continue reading →

How Much Would an Interest Rate Increase Hurt Your Budget?

According to a recent study by the Bank of Montreal, four in ten Canadians would feel the pinch if best rate mortgages saw a two percent interest rate increase. The study, which was compiled by Leger Marketing, found that 43 percent of Canadian homeowners believe an interest rate increase would either hamper their ability to pay their mortgage or leave them on rocky financial footing.

The study also found that one out of every five Canadians surveyed felt that a two percent increase would hurt their ability to make their mortgage, while 23 percent were unsure how a hike would affect them. Just over half, 57 percent of respondents felt that they could still afford their home if interest rates were to increase (the survey was completed online with a national sample of 150 Canadians over the age of 18). Continue reading →

Budget Overview: What It Means for CMHC

From pennies to old age pensions, yesterday’s budget was full of unexpected quirks. What wasn’t surprising to best rate mortgage brokers was the government’s discomfort with the Canada Mortgage and Housing Corporation. Ottawa has voiced concern over the activities of the Crown corporation for months now, threatening to toughen its oversight of this important economic organization. Yesterday, the budget took aim at the CMHC, which controls about 75% of the mortgage default insurance market. Currently, CMHC is backstopped by the federal government; however, the organization is coming close to a mandated limit of $600-billion thanks to a sizzling housing marketing and the proliferation of bank-offered portfolio insurance packages (for more background information on this issue, review our article “CMHC Backing Fewer Loans: A Look at the Repercussions“).

According to the budget, “the government will introduce enhancements to the governance and oversight framework of the Canada Mortgage and Housing Corporation.” Continue reading →