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Bloomberg Canada – July 19, 2019 The Bank of Canada has lowered the rate used by mortgage stress tests, used to qualify homeowners for mortgage borrowing limits, for the first time in three years. The central bank’s five-year benchmark qualifying rate is now 5.19 per cent, down from 5.34 per cent. It’s the first decrease in the five-year fixed mortgage rate since September 2016, when it dropped from 4.74 per cent to 4.64 per cent, and increased steadily since. Rob McLister, founder of mortgage comparison website RateSpy.com, says the dip will increase the buying power for mortgage borrowers by allowing them to afford up to 1.4 per cent more home. For example, someone putting a 20-per-cent down payment on a home who makes $50,000 per year can now afford $4,000 more home, according to calculations by Ratespy.com. “It will have an incremental boost for housing,” McLister told BNN Bloomberg’s Greg […]

Understand Discounted Rates and Understand the Possible Penalties.  The truth about the Best Mortgage Rates in BC. If it’s too good to be true it often is… Sometimes you’ll see a  you found a deeply discounted rate advertised in BC.  Is the broker local in Victoria or in another city and can you go and meet with them to discuss the critical details?  Is it a national bank offer or and can they clearly explain the penalty structure to you?  We pride ourselves on offering the best rates, on mortgage products that are client-friendly, meaning flexible and low-fee.  Our clients often hear of national ‘rate sites’ promoting rates that are ultimately not available, and people have wasted a lot of time and created more stress than is required, at an already stressful time. A large number of Canadians are forced to terminate their mortgage contracts early due to an unforeseen […]

New “Stress-Test” 2017 / 2018 Mortgage Rules Changes Explained Recently as you have probably heard in the major news media, like Global News and CBC, late in 2016, new rules were announced by OSFI with respect to residential home mortgages. The decisions leading up to these new rules are primarily driven by ‘expert’ concerns about rising home prices in a few Canadian markets Vancouver, and Toronto.  Prices in Victoria, BC are up significantly as well but our demand continues to outstrip supply even after the first wave of new rules have been implemented.  The thinking behind making it more difficult for Canadians to buy and refinance is that it might calm down the housing market, and specifically limit price increases. I’m not going to get into it too deeply here but the thinking behind these new rules is counter-intuitive, and possibly quite damaging to Canadian families and the Canadian economy […]

When you’re house hunting anywhere in the greater Victoria area; from James Bay to Oak Bay, from Saanich to Langford, it’s a great idea to know the mortgage amount you qualify for, your monthly payments, and that your interest rate will be held for a specified period of time i.e. 90 to 120 days. In some cases the pre-approval and rate-hold period can be even longer.  This way you can shop within your price range, you don’t have to worry about rates rising, and both realtors and sellers will know you’re a serious buyer. This is particularly important in a tight market where inventory is low and there is competition between several buyers. Be realistic and make sure you can afford that pre-approved amount; review all of your home ownership expenses and your monthly budget including property taxes and regular upkeep. Keep in mind that not all pre-approvals are the […]

So you’re one of those buyers who absolutely loves older homes: the character, the unique architecture, the settled neighbourhood… and maybe the great value.  Maybe its James Bay, or Fairfield or Oak Bay.  Sometimes older homes with “great bones” sometimes need a little renovation to turn them into the home of your dreams. The Victoria market has many older homes that can benefit from a great renovation and there is the very real possibility of turning your hard work and vision into increased home equity.  Unfortunately, sometimes on top of the home purchase price, a few costly renovations can be a big burden on your savings or even worse, your credit cards. We have good news.  We can bundle the cost of those immediate renovations right into the mortgage: so instead of sky-high credit card and line of credit bills… you’ve got your mortgage and renovations looked after in one […]

What is a collateral charge mortgage?  Here’s how it works: the bank registers the mortgage for more than the value of the home at closing.  So if you have a $400,000 mortgage and a $700,000 home, the bank will register a charge up to $875,000.  This has several side-effects, including locking you in to the lender, their limited products an their rates. We’re not big fans of the collateral charge mortgage – because we’re all about keeping your options open. Collateral charge mortgages are very difficult to transfer to another lender. So you might see a great rate or mortgage feature at another lender, but it’ll cost you to switch.  Generally, you would need to start from the beginning of the process all over again, including time and paperwork, and pay new legal fees. There are some lenders who only offer collateral charge mortgages, with catchy marketing terms they like […]

Canada Mortgage and Housing Corp. (CMHC) recently announced that as of May 30th, it will stop insuring both second homes and self-employed borrowers who don’t have standard documents to prove their income. Canada’s private mortgage insurers did not follow suit, although putting limitations on their second-home programs. Other new rules currently under review could mean the complete elimination of cash-back down payments. There have been many changes to the mortgage landscape in the last few years, making it more important than ever to get expert and timely mortgage advice and access to as many options as possible. If you’re concerned about how changing rules might impact your home ownership goals, let’s talk!

Victoria Real Estate Board – Basic Stats from APRIL 2018 vs APRIL 2017 Net Unconditional Sales APR 2018: 775 Net Unconditional Sales APR 2017: 885 Active Listings End of APR 2018: 2.002 Active Listings End of APR 2017: 1,690 In most price ranges throughout the greater Victoria Real Estate Board it continues to be a ‘sellers market’. Inventory continues to build slightly. The new NDP government punitive real estate related taxes combined with the national mortgage stress-test changes has made it more difficult to buy in theory but what we are seeing is the continuation of multiple-offer situations and aggressive low or no condition offers from buyers. If family or income properties are priced correctly they sell almost immediately. With almost zero vacancy rate and residential rental rates ranging from steady to higher investors continue to see value and purchase residential properties for income generation. Your May 2018 Mortgage Market […]

The NDP provincial government has released its new budget. From a housing perspective here are the highlights (or lowlights depending on your perspective). 1. Speculation Tax This new, annual property tax will apply to foreign and domestic homeowners who do not pay income tax in BC, including those who leave their properties vacant. The new tax will initially apply to homes in Metro Vancouver, the Fraser Valley and capital regional districts in Victoria and Nanaimo, Kelowna and West Kelowna. In 2018, the tax rate will be 0.5% of assessed value. In 2019, it will rise to 2.0% of assessed value. 2. Victoria Area Foreign Buyers Tax Effective Wednesday February 21, 2018, the government will increase the foreign buyers tax from 15% to 20% and extend the tax to the Fraser Valley, the capital regional districts in Victoria and Nanaimo and the Central Okanagan Regional Districts. What is a foreign buyer? See […]