Toronto home prices “push the boundary”: BNN

Vancouver house prices
By: JamesZ_Flickr

There is a video on the BNN website in which they interview an economist with Mortgage Brokers Canada.  He talks about the hot housing market in Toronto (which is the second hottest home market in Canada to Vancouver) among other things.  One of the primary aspects of the hot market that he talks about is that low interest rates are driving price increases.  The foreign ownership issue is raised and he stated even 5% of buyers being foreign buyers would affect the market significantly also.  (I suspect that the number is much higher, but no one has firm data on this.) (more…)

Watch out for the wolves!

I was meeting with my business development manager for Canadian Home Income Plan (CHIP) about their reverse mortgage product today, and he shared with me an experience with a client of his bank that is at once shocking but also, unfortunately, not uncommon.

There is a private mortgage lender who advertises on the radio that did a mortgage for a client who was terminal with cancer.  The mortgage amount was $500,000.  Do you know how much the fees were?  $65,000!  That is insane!  CHIP was able to take care of him in a way that he could enjoy his remaining days with his family in comfort, and provided a much more fair solution, but that is not really the point of the story.  It is technically legal to charge those kinds of fees, but it does not make it fair, equitable or correct. (more…)

BC Property Transfer Tax

New property transfer tax changes affect BC home buyers

The latest BC government budget announced changes in how the property transfer tax is charged.  Here is a summary of the changes:

  • -The property transfer tax will remain the same until the purchase price exceeds $2 million.  Currently, the tax rates are 1% of the first $200,000 and 2% of every dollar above $200,000.  Now, at the $2 million threshold, the rate will be 3% of every dollar over $2 million.
  • -There is a new program for Canadian citizens and permanent residents purchasing a new home with a value of less than $750,000.
  • -The first-time homebuyers program remains unchanged with a full exemption up to $475,000 and a partial exemption up to $500,000.

What impact will this have on the real estate market?

Virtually none.  Those buying new homes will save some money.  Those buying homes for more than $2 million will have to pay slightly more, but it will surely not affect their ability to buy the home that they want.

Mortgage down-payment changes

home sweet home
By: Diana Parkhouse

Mortgage down-payment requirements increase

The Canadian government recently made a change that has now come into effect regarding the minimum down-payment required to purchase a home.  Previously, 5% was the minimum down-payment required to buy a home under most normal circumstances.  (more…)

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Advice on breaking your mortgage to get a lower rate – CBC

Here is a good article on the CBC website that talks about breaking your mortgage to refinance with a better interest rate.

I would generally agree with the points made in the article, except that the last point regarding splitting up the mortgage into multiple components I would not necessarily agree with. One reason for this is that the mortgages are typically collateral charges and makes it more difficult to switch the mortgage at the end of a term.

It can be a good time to refinance your mortgage if your penalty is small. If you would like to discuss further your circumstances to determine if it would make sense for you, call me and I can better advise you on your individual needs.



Watchdog tweaks mortgage rules for insurers, banks – Globe and Mail

There is a new article in the Globe and Mail regarding the newest mortgage regulation changes being implemented by OSFI. From the article:

One of the most notable changes is that the regulator is now spelling out criteria banks must meet to verify the income of borrowers, especially those who are self-employed.

OSFI has waded into the country’s mortgage market in recent years as part of a global effort to prevent another crisis like the one that occurred in the U.S. with subprime lending. Global bodies like the Financial Stability Board, which gets its mandate from the G20, recommended that all countries review their mortgage rules.

The good news is that there is no substantial changes to policies that would restrict borrowers in a way that they weren’t before. The significant difference from before appears to be that mortgage insurers will need to start vetting income confirmation documentation for insured mortgages, where previously they counted on the lender’s word exclusively.

I do not anticipate this change having a significant impact on the market., but may serve to even the playing field between lenders who do follow regulations and those who may not.

Steady housing market in 2015, some moderation in 2016 – CTV News

I find the title slightly misleading, but the article on CTV News talks about a steady new housing market in 2015 and a slightly decreased one in 2016.

Some of those expected causes include: a slowdown in the pace of construction, the shrinking poll of young, first-time buyers due to slower population growth, rising housing prices in some markets and the anticipated interest-rate increase in late 2015.

The agency predicts housing starts to come in at 189,000 units for 2014, followed by 189,500 in 2015, before moving downward to 187,100 in 2016.

The difference in the new housing construction rate forecast appears to me to be minimal almost to the point of a rounding error. I do not believe it will have a significant impact on housing supply and demand, housing prices or mortgage policies. I guess writers need to write about something (looks in the mirror…).