Is a slowing housing market the kiss of death for the Canadian economy? While there’s no doubt that a falling market comes with its fair share of bad karma, it doesn’t necessarily mean that we’re headed towards a full on market crash similar to the U.S. In fact, a decline in home prices could actually come with some benefits. Here’s a look at some of the best reasons to embrace the slow down. Continue reading
Tag Archives: Mortgage Term
Deciding on Debt: How the New Rules Will Impact Your Mortgage Hunt
Two things are clear about the current Canadian housing market. First, interest rates are going to go up. The Bank of Canada governor, Mark Carney, Finance Minister Jim Flaherty, and pretty much anyone involved in the banking industry has been warning of a hike, if not several, potentially before the end of the year. Second, the nation’s major banks have been offering absolutely amazing deals on long term fixed rate mortgages.
Which leads us to the million dollar question – is now the time to lock in a fixed rate or is a variable rate the way to go? Continue reading
Fewer First Time Home Buyers Could Signal Trouble
A recent report from Canada Mortgage and Housing Corporation shows that there are fewer first time home buyers entering the nation’s real estate market. The recently released Renovation and Home Purchase Report, which highlights the key trends, analyses and statistics from ten major Canadian cities, predicts that the housing market could be headed towards trouble thanks to a decreasing number of first time home buyers. Continue reading
Mortgage Rule Changes Not So Severe
The first round of changes to Canada’s mortgage rules were more bark than bite, according to a letter sent to the nation’s banks on Wednesday from the Office of the Superintendent of Financial Institutions. Earlier this year, mortgage experts speculated that new mortgage rules could have a dampening effect on hot real estate markets, as more and more mortgage applications would inevitably be rejected.
Draft guidelines released in March suggested that the OSFI would eliminate 100% financing using a 5 percent cashback mortgage as well as enforce stiffer regulations concerning loan-to-value ration calculations and stated income mortgages. The document also inferred that borrowers would be required to re-qualify each time their mortgage came up for renewal.
However, Wednesday’s announcement tells an entirely different story.
Housing Prices Now and Then – Are Things Really That Bad?
If you believe the headlines, housing prices are on the rise across Canada even as consumer debt continues to pile up. The allure of low mortgage rates has thousands of home hunters bidding on what appear to be overpriced properties. But is that really the case?
When it comes to understanding the true price of a home, there’s one main factor to keep in mind – affordability. When the affordability of homes good, demand will usually exceed supply, leading to a hot housing market. So, just how affordable are homes in the current market? The answer from the Bank of Canada might surprise you. Continue reading