Mortgage Down Payments: Different But Not So Bad

Good news – the new down payment rules taking effect on February 15, 2016 are a lot better than anticipated. The revised percentages affect properties costing between $500,000 – $1 million. Here’s how the new system will work: • 5% down on the first $500,000 • 10% down on the remainder of the purchase price • no change to the default insurance premiums (based on overall loan-to-value) Down payments for properties over $1 million remain unchanged. How many buyers will be affected? Industry experts feel far fewer than previous speculations, perhaps as low as 4%. In addition, there will be…


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Canadian Housing Market Forecast: Cooling Down

The Canada Mortgage and Housing Corp. (CMHC) reports that this year’s upturn in house prices will slowly wear off over the next two years. CHMC forecasts that end 2015 will see national home prices 7.2 per cent higher. However, this rate of increase is not expected to continue. Canadian home prices will continue to rise. Yet, the rate of the climb will be slower. CMHC predicts a 1.3 per cent rate for 2016 and a 1.4 per cent rate for 2017. In addition, new home construction will also begin decreasing. This year saw 186,990 housing starts. The coming year will…


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Employment Trends And Mortgage Rates

Employments trends and wages greatly affect the Canadian Mortgage and Housing Corporation’s decisions regarding mortgage rates. As the U.S. and Canadian employment rates continue to improve, there has been talk that mortgage rates might go up come September. In the U.S., 536,000 full time jobs were added just last month, and average hours worked rose by 0.5%. The stats from Canada are also very encouraging; over the past three months, full time employment has grown by almost 150,000 and average wages have increased 3.4% on a year by year basis. The best news for Canada is that export demands have…


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Going From Variable Rate Mortgage To Fixed: What You Should Be Aware Of

You can usually find a variable rate mortgage for at least half a point lower than any fixed rate mortgage, but choosing a variable rate mortgage makes you subject to unexpected rate hikes. Many times people decide to switch from a variable rate to a fixed rate mortgage before their term is up. Here are a few common mistakes that are made when switching and how you can avoid them. Locking in Too Late Most people don’t have time to constantly analyze mortgage rates, so by the time they get wind of the Bank of Canada’s mortgage rate increases, it…


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Making Sense Of Today’s Mortgage Renewals Part Two

When your lender offers you the option of an early renewal on your mortgage, there’s a lot to consider. In Part 1 you saw the importance of shopping around and factoring in hidden costs; here are some more things to watch out for. Be Wary of Rising Rates… Interest rates on mortgages can rise quickly, especially given their current lows. If you’re being offered a low, fixed rate as an early renewal option, it may be a good idea to lock in while you have the chance. It’s all but certain mortgage rates will be higher in a few years’…


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Making Sense Of Today’s Mortgage Renewals

Many Canadian mortgage lenders give their customers the option of an early mortgage renewal. At first glance today’s low-rate offers seem like a great deal, but it’s important to consider many factors when it comes time to renew your mortgage. Make Sure to Shop Around The great deal your current lender has offered you might not be the best deal out there. Check with other lenders to see who can offer you the best interest rate and the lowest other costs (see below). Refinancing is another option that you may want to consider instead of simply renewing your mortgage. If…


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Canadians Flock To Mortgage Brokers In Greater Numbers

Every year, the Canadian Mortgage and Housing Corporation (CMHC) conducts a Mortgage Consumer Survey to identify trends in the experience of selecting a mortgage in Canada. Among the results of this year’s survey was the fact that a growing number of Canadians are electing to use the services of a mortgage broker rather than working directly with lenders. Canadian Mortgage Broker Selection By the Numbers According to the 2015 Mortgage Consumer Survey, 42% of mortgage loans obtained by repeat buyers—which includes homeowners who are refinancing their existing mortgages and those making a home purchase who have already gone through the…


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Canadian Mortgages Now 26% Of Average Homeowner’s Income

According to numbers released by the Canadian Mortgage and Housing Corporation (CMHC), the average Canadian homeowner with a CMHC-backed mortgage now pays 26% of their monthly household income on their mortgage payment. This is up from 25% in 2013, and while a 1% gain over two years might now seem alarming, it does point to a continuing trend in Canadian mortgages and home ownership. Canadian Housing Costs are Likely to Continue Growing It’s no secret, and probably no surprise, that home prices are rising across Canada. In some areas, this rise has been incredibly rapid amidst the low rates available…


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New Rules For No-Down And Low-Ratio Canadian Mortgages

Even as mortgage rates in Canada continue to set new lows and housing markets continue to heat up, new rules are being handed down that will make it harder for some Canadians to purchase the homes of their dreams. Though these rules are intended to better protect lenders, mortgage insurers, and borrowers from potential defaults, they will also make it harder for Canadians with self-employment income and/or with less cash on hand for down payments to qualify for mortgages. Income Verification and Cash-Back Mortgage Rules Mean Shifting Opportunities The new rules, which will go into effect on June 30 or…


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Does New Record Low Signal Bottom Of Canadian Mortgage Rates?

Last month, Ontario’s largest credit union, Meridian, began offering a 1.49% APR on 18 month mortgages. While this rate is only available on mortgage period that fall well below the average term of home loans in Canada, it still sets the record as the lowest mortgage rate the nation has ever seen. This, especially in light of other signals in the Canadian mortgage market as discussed in earlier posts, suggests we might truly be seeing rock bottom mortgage rates that have nowhere to go but up. A Slow But Sure Climb in Mortgage Rates is Inevitable As mortgage rates have…


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