Category Archives: Residential Mortgages

Are Two Addresses Better Than One?

Whether it’s a cottage in the Muskokas or a vacation home in Cabo, multiple homeownership is becoming more and more common among wealthy Canadians. Now, more than ever, Canadians are picking up secondary properties, many of them south of the border. While statistics are hard to come buy, numbers from the National Association of Realtors show that foreign buyers are having a big impact on the United States housing market… and many of these buyers are Canadian.

International buyers purchased roughly $82.5 billion worth of property in the U.S. in the year ending March 31, 2012, compared to $66 billion the previous year. Canadians are estimated to represent about a quarter of those buyers.  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 →

Understanding Amortization

A shorter amortization period can help you pay off your mortgage faster and save you money. Obvious? Perhaps. So why are more and more people choosing to stretch their amortization as long as possible? The recent changes to Canadian mortgage regulations that limit amortization periods to 25-years have caused a bit of tension across the country as families scramble to manage increased payments.

However, at the end of the day, this restriction will go a long way to improving the pocketbooks of families from coast-to-coast. It wasn’t long ago that home hunters strove for shorter amortization periods in order to pay off their mortgage as soon as possible. As mortgage rules relaxed, so too did our dedication to frugality. Continue reading →

Is a One-Year Fixed Rate Mortgage Right For You?

Rates have nowhere to go but up.

Or at least, that’s what everyone keeps telling us. Banks, economists, mortgage brokers, even Finance Minister Jim Flaherty is insisting that interest rates will start to climb later this year.

And yet, they keep going down. The mortgage establishment continues to drop interest rates, pushing long-term fixed mortgage rates like they’re going out of style. Which might be the case. With no clear sign of imminent rate hikes, borrowers are beginning to consider shorter term options in order to maximize their savings.  Continue reading →

Buyers Showing Caution, Bank Keeps Rates Low

The Bank of Canada held its ground today, leaving the overnight lending rate unchanged at 1 percent. While the move was expected (the rate has been locked at this near-historic rate since September of 2010), the tone of the announcement was far less confident than previous press conferences.

The Bank’s release explained how a global economic slowdown is impacting Canada’s growth potential. While domestic factors remain strong, the Bank has trimmed back its outlook, suggeting that the economy will grow “at a pace roughly in line with its production potential in the near term.” Consumption and business investment are expected to be the main source of growth. However, the effect of lower commodity prices on Canadian incomes, combined with increasing household-debt, could cause some serious setbacks. Continue reading →