Tag Archives: Mortgage

Were Flaherty’s Changes Too Late?

The fourth round of changes to Canada’s mortgage rules were designed to clamp down on an overheated housing market. Now, a week later, analysts are wondering if Finance Minister Jim Flaherty jumped the gun. Detractors are pointing to a real estate market that was already beginning to decline, both in terms of sales and price. Tightening mortgage rules during a period of corrective market action could grind the market to the halt.

While the Toronto market remains hot, overall the Canadian housing market has cooled. The Canadian Real Estate Association recently released that its benchmark index for home prices was up to 5.2 percent in May from a year earlier. Most notably, gains in the Vancouver market were shrinking. Not surprisingly, Toronto’s rate was up about 7.9 percent from a year ago. Continue reading →

Ottawa Drops the Hammer on Mortgage Rules

Back in April, FinanceĀ MinisterĀ Mark Carney remarked that “in exceptional circumstances, if there are issues that threaten financial stability, such as household debt… the bank could use monetary policy for that purpose.”

Just three months later, those exceptional circumstances have become reality.

On Wednesday, the Federal Government made their move to further tighten mortgage rules, addressing concerns over high Canadian household debt.Ā  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.Ā  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.

Continue reading →

Rates on the Way Up

Canada’s major banks have begun to increase rates, putting an end to near-historical lows across the country. News broke on Monday that several banks would be increasing their rates by 6/10ths of a percentage point, signifying a shift in the real estate market.

The largest increase was attached to the popular five-year fixed closed rate. The posted rates at Royal Bank, Laurentian Bank and TD Canada all went up from 5.25 percent to 5.85 percent. Of course, posted rates are routinely discounted. As such, RBC’s new discounted rate for the five-year term also increased 6/10ths of a percentage point to 4.59 percent. TD discount mortgage rates now sit at 4.55 percent, while the discounted rate at Laurentian is holding steady at 4.54 percent.Ā  Continue reading →