Category Archives: Mortgage Types

Housing Starts Not Bad in September

September’s housing starts fell less than originally expected says the Canada Mortgage and Housing Corp. Housing data released on Tuesday showed that housing starts fell to a seasonally adjusted annualized rate of 220,215 units last month. This was down from 225,328 units in August, but was still well above the predicted drop to 207,50o, according to poll of analysts from Reuters.

These numbers are well north of what economists state is required to meet the growth rate in household formations. However, many still feel that demand for new homes is primarily being supported by accommodative interest rates. If low mortgage rates were to begin to rise, the tides could quickly shift, causing a correction that would seriously impact the market. Continue reading →

Housing Market Cooling Across Canada

The Canadian housing market has begun to correct itself, or at least that’s what the numbers show. A combination of market fatigue, stricter mortgage rules and a decrease in property affordability are believed to be contributing to the long anticipated correction. Home sales fell 5.8 percent in August from July. Sales are down 8.9 percent year over year.

With that being said, Canadian home resale prices edged slightly higher in August over July numbers. According to the Teranet-National Bank Composite House Price Index, overall pries of repeat sale single-family homes climbed 0.2 percent in August from July.

This is the smallest August gain in 12 years. Falling prices were also recorded in three of 11 markets surveyed by the index.  Continue reading →

Questions to Help You Avoid Mortgage Penalties

Thinking about opting out of your fixed rate mortgage in order to take advantage of ultra low variable rates? Be careful! Interest rate differential (IRD) charges – commonly referred to as mortgage penalties – could leave a large dent in your wallet if you’re not careful.

Unfortunately, banks have historically made it nearly impossible to figure out just how expensive switching mortgages is. But that’s about the change. A new “voluntary” Code of Conduct has been implemented by the Department of Finance whereby banks are now required to provide their mortgage customers with clearer explanations of prepayment charge calculations, as well as provide calculators so that mortgage holders can estimate their own penalty estimates. Mortgage calculators can now be found on the official websites of the Bank of Montreal, CIBC, HSBC, ING Direct, Laurentian Bank, National Bank of Canada, Manulife Bank, Royal Bank, Scotiabank and TD Canada Trust. Continue reading →

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 →

Canadian Housing Market at Tipping Point

According to economists at the Bank of Nova Scotia, Canada will soon boast a more than 70 percent homeownership rate. The question now is whether or not the nation’s housing market has reached the tipping point (the United States is believed to have cracked the same 70 percent threshold just before the housing bubble burst in 2008).

Growing concern over Canada’s seemingly out-of-control housing market has already prompted Ottawa to crack down on mortgage rules. These restrictions, which include limiting amortizations to 25 years, are designed to disuade cash-strapped Canadians from taking on mortgage debt that they can’t afford. What’s more, the Office of the Superintendent of Financial Institutions has also implemented new rules that will tighten up lending regulations at financial institutions. Continue reading →