Category Archives: Residential Mortgages

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 →

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 →

Consumer Debt Hits A New High

A report released this morning by TransUnion shows that, despite repeated warnings, Canadians are back on the borrowing bandwagon, pushing consumer debt to a new record high.

According to the report, the average Canadian’s non-mortgage debt hit $26,221 in the second quarter of 2012, up $192 from the previous quarter. This is the highest per person debt level since the credit bureau started tracking this type of data back in 2004.

The increase in average debt spanned the country, although Saskatchewan reported a slight dip on a quarterly basis and Alberta recorded a decreased annual debt growth. Continue reading →

RBC Increases Rates And the Argument for Smaller Lenders

The Royal Bank is the first of Canada’s big banks to hike rates, increasing two of its mortgages by one-fifth of a point each this morning. RBC’s posted rate for a three-year, fixed-rate mortgage has increased 0.2 percentage points to 4.05 while their special-offer rate for a five-year closed mortgage rose to 3.69 percent.

RBC is the first major commercial bank to increase their three-year mortgage rate since late January. Competitors are currently sitting at 3.95 percent. Data from the Bank of Canada shows that five-year conventional mortgages have held steady at 5.24 percent since May. Continue reading →

HELOC Lending Limits On The Way?

Rumour has it that lending limits for home equity lines of credit (HELOCs) could be slashed come the end of this month. These moves, which relate to the Office of the Superintendent of Financial Institutions’ new mortgage underwriting guidelines, will limit federally regulated lenders to limit all new HELOCs to 65 percent loan-to-value, down from the current rate of 80 percent.

Canada’s big banks are required to comply with new guideline by the end of the fiscal year – October 31, 2012. However many lenders are already planning changes to take effect in September.  Continue reading →