Category Archives for Mortgage Affordability Calculator

Stress Test Mortgage Update - November 2017

Stress Test Mortgage Update – November 2017

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 […]

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Stress Test Mortgage Update - November 2017

The In’s and Out’s of Mortgage Pre-Approvals

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 […]

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Stress Test Mortgage Update - November 2017

Canadian Interest Rates To Rise As Banks Turn Riskier Than US Ones

The Huffington Post Canada | By Daniel Tencer The last thing Canada’s heavily mortgaged homeowners need is an increase in monthly payments, but some experts are saying this is exactly what’s ahead. With earnings plunging in the oil patch and Canadians holding record levels of debt, the country’s banks are turning riskier, and that means higher borrowing costs ahead. Fitch ratings agency “expects the cost of credit to rise in Canada as banks feel continued pressure” in the tougher new economic climate, the company said this week. “Consumer credit health is a concern due to the record household debt levels and … pressure on consumer loan portfolios in oil provinces, which is pushing up delinquencies in auto lending and credit cards,” Fitch Senior Director Doriana Gamboa said in a statement. Consumer insolvencies are indeed on the rise in Canada. Personal bankruptcies are up 6.3 per cent in a year, while […]

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Stress Test Mortgage Update - November 2017

Average Canadian house price rises to $508,097

Canada’s housing market continues to set new records, with the average sale price up to $508,097 in April, the busiest month for home sales in Canadian history. The Canadian Real Estate Association says the average house price increased by more than 13 per cent in the year ended in April. CREA has said for several months in a row that the average price is skewed higher by the hot and large markets of Toronto and Vancouver. Stripping those two cities out, the national average drops to $369,222 and the year-over-year gain is reduced to 8.7 per cent, CREA said. CREA says the average figure is misleading, so it calculates something it calls the Aggregate Composite MLS House Price Index, and contends it’s a fairer representation of the real market, by blending together all housing types. Even on that more normalizing scale, the CREA index rose 10.3 per cent in April, its biggest gain in almost six years stretching back […]

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Stress Test Mortgage Update - November 2017

The Bank of Canada Announcement

The Bank of Canada announced last week that it is holding the benchmark rate steady for the fifth straight time, noting that “the low level of oil prices will continue to dampen growth in Canada and other energy-producing countries,” although “Canada’s GDP growth in the fourth quarter was not as weak as expected.” Global growth is expected to strengthen this year and next, and U.S. expansion remains broadly on track. Inflation in Canada is also evolving as anticipated. Taking into account all of these considerations, the Bank “judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate.” Great news if you’ve got a variable-rate mortgage, need a new mortgage, are renewing, or want to consolidate debt at the lowest cost funds. The next rate-setting day is April 13, 2016. Get in touch today for help determining whether a fixed or […]

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Stress Test Mortgage Update - November 2017

Will Canada’s New Down Payment Rules Affect You?

Huffington Post 02/09/2016 Wayne Karl By this time next week, you will no longer be able to buy a home in Canada priced at more than $500,000 with a five-per-cent down payment. Big deal or no deal? It seems to depend on what market you’re in. In December, Federal Finance Minister Bill Morneau announced the changes to the rules for government-backed mortgage insurance, designed to contain risks in the housing market, reduce taxpayer exposure and support long-term stability. Effective February 15, for properties between $500,000 and $1 million, the minimum down payment for new insured mortgages will increase from five to 10 per cent for the portion of the house price above $500,000. The minimum down payment for properties up to $500,000 remains unchanged at five per cent, as does the minimum down payment of 20 per cent for homes priced at more than $1 million. If you’re first-time homebuyers […]

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