A hot housing market is pushing borrowers farther and farther away from mainstream financing and it’s causing quite the stir in the Canadian subprime mortgage industry. The source of the excitement? A growing pile of mortgage debt that’s coming from outside of Canada’s big six banks. Continue reading
Tag Archives: Mortgage Rates
Make the Most of Low Mortgage Rates in 2012
Are you in the market for a mortgage renewal this year? Then pull up your socks, grab a mortgage calculator, and get ready to start saving some serious cash! If you’re one of the many Canadians who settled for a fixed-rate five-year mortgage back in 2007, chances are you’ve been kicking yourself ever since. At the time, locking in a 5 percent or higher interest rate seemed like a bargain – the market was hot, housing prices were high, and interest rates were on a continued climb.
And then the bubble burst, the U.S. economy toppled, and interest rates dropped to historic lows. Five-year fixed mortgage holders were left with massive payments while the rest of the country took advantage of some of the best mortgage rates ever.
But the tides are about to turn. Continue reading
What Will the Budget Bring?
According to a report in the Globe and Mail, next week’s highly anticipated federal budget should only contain “modest” spending reductions and little to no intervention in the housing market. Finance Minister Jim Flaherty delivered these and other comments outside of a volunteer firefighter station in Ottawa last Thursday. During the announcement, Mr. Flaherty stated that he would like to see if the market could “correct itself,” rather than force new regulations into place.
Flaherty’s response comes after Canadian banks requested Ottawa to institue mortgage insurance regulations in order to avoid what many are foreseeing as a major housing crash. The nation’s largest banks have been calling for the government to either lower the maximum amortization period for insured mortgages or raise the required minimum down payment amount for best rate mortgages.
Draft Guidelines: Residential Mortgage Underwriting Practices and Procedures
More stringent mortgage qualifications are on the way. On Tuesday, the Office of the Superintendent of Financial Institutions in Canada released draft recommendations that would impact Canada’s banks and other federally regulated lenders.
The 18 page document contained a slew of information, the majority of which make complete sense. However, there’s still great cause for concern in the financial sphere. According to this document, the OSFI is proposing a swift implementation that could shake the system off its foundations. One reputable mortgage source described the OSFI’s recommendations as a “policy-initiated free-fall”.
While we encourage home hunters to review the entire document (available via this link), here’s what best rate mortgage hunters need to know. Continue reading
Mortgage Changes Could Happen Before March
Tougher mortgage requirements could be on the horizon for Canadian homeowners, according to analysts surveyed by a recent Reuters poll. This comes on the assumption that housing prices will cool off this year. Experts anticipate that housing prices will climb just 0.1% this year, a considerable decrease from the 0.9% year-to-year increase seen in 2011.
Ten out of 14 economists polled by Reuters answered “yes” when asked if they thought Ottawa would step in and tighten mortgage rules within the next 12 months. If Finance Ministry Jim Flaherty were to adjust requirements it would be his fourth intervention in the nation’s real estate market in as many year. Continue reading