CANADIAN MORTGAGE INSURANCE RULE CHANGES
March 4, 2010
Further to the recent insurance guideline announcement, mortgage lending rules are tightened effective April 19, 2010.
Key interest to Canadian mortgage lenders is the “definition of the five-year standard rate used for mortgage qualifying”. The government is currently working on that definition, once those details are confirmed, it will be posted here on this blog.
The changes being implemented are prudent and will ensure long term stability in the real estate market. The changes are:
- All borrowers must meet the standard for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;
Tougher mortgage rules to cut down default risks
February 18, 2010
Below is a CTV News report, dated February 16, 2010.
Ottawa has tightened the rules for obtaining a government-backed mortgage, as it casts an eye towards expected future interest rate increases and the risks those pose for Canadian homeowners.
Finance Minister Jim Flaherty announced Tuesday morning that prospective homeowners will soon have to meet the requirements for a five-year, fixed rate mortgage — as opposed to the three-year standard in place right now. The rule will apply even if they choose a mortgage with a lower interest rate and shorter term.
View the video and read the article here.
Fixed rate or variable rate mortgage?
February 6, 2010
“The question of whether to lock in to a longer-term fixed mortgage rate or stay in a variable rate has become an increasingly complex and important debate,” said
Research shows that over the past 30 years it has been more cost-effective for borrowers to have a variable rate mortgage 82 per cent of the time. Read more
Deciding on a mortgage
February 3, 2010
It is generally less expensive to continually roll over a short-term mortgage than to commit to a long-term one
By Eric Tyson and Tony Martin, published on Tuesday, Feb. 02, 2010.
This is the sixth in a series of 10 excerpts from Investing for Canadians for Dummies.
Whether to go for a short- or long-term mortgage is an important decision in the real estate buying process. You need to weigh the pros and cons of each and decide what’s best for your situation before you go out to purchase real estate or refinance. Read more
Mortgage brokers handling growing number of deals
January 21, 2010
By James Pasternak, Financial Post
When Hamilton, Ont., residents and partners Kathy Funke and Dan Perryman wanted to purchase an investment residential property in 2000, they did what most Canadians do when it’s time to borrow. They headed to the bank branches in their area.
They shopped around a bit, made lots of phone calls, compared mortgage conditions and rates and then signed.
“That was our first experience. We didn’t really know where to start. And I didn’t know anything about mortgage brokers at that time. Read more
Re: Strata Property Act Amendments - Rentals
January 11, 2010
January 11, 2010
There has been a shortage of rental units for years in British Columbia. In order to address this, the Provincial Government recently passed legislation dealing with the rental provisions of the Strata Property Act (”SPA”).
Under the old section 143 of the SPA, a rental restriction bylaw passed by a Strata Corporation did not apply to that strata lot until the strata lot was conveyed by the first owner after the developer or until the date that the rental period disclosed in the RDS expired, whichever was earlier. Essentially the first owner was always able to rent out the strata unit until the expiration of the rental period disclosed in the RDS, but not subsequent owners. Read more
Mortgage Rate Forecast
December 22, 2009
A release by BCREA for December, 2009:
Home buyers will benefit from a low mortgage rate environment through much of 2010. The BC Real Estate Association forecasts borrowing costs to rise more quickly during the tail-end of 2010 and through 2011.
“Mortgage rates will inevitably rise from current levels. Today’s low interest rates are the product of a global coordinated effort to mitigate the worldwide economic downturn through fiscal and monetary stimulus”.
Bank of Canada expected to hike interest rates in mid-2010
December 9, 2009
December 08, 2009
TORONTO — The Bank of Canada repeated its pledge Tuesday to keep interests rates at historic lows until the middle of next year to stimulate growth and a sense of stability in the midst of a slow economic recovery.
But, economists are calling for rate hikes as much as a full percentage point or more later next year, and say the bank’s commitment to keep its key rates at 0.25 per cent creates a false sense of security in borrowers who have taken on debts larger than they could normally afford.
The C.D. Howe Institute’s 12-member monetary policy council’s median target for the overnight rate was for one per cent in the second half of 2010. Read more
Strong demand carries into late fall
December 6, 2009
Wednesday, December 2, 2009
VANCOUVER - Home values continued to edge upward in November as demand in the Greater Vancouver housing market remains well above seasonal norms.
Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 12.4 per cent to $557,384 from $495,704 in November 2008. This price, however, remains down 1.9 per cent from the most recent high point in the market in May 2008 when the residential benchmark price sat at $568,411. Read more
High sales levels spur rise in home values
December 6, 2009
Wednesday, November 4, 2009
VANCOUVER – Strong demand has led to a steady rise in Greater Vancouver home prices compared to last year.
Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 6.8 per cent to $553,702 from $518,668 in October 2008.
“While home prices have been rising in 2009, they have not eclipsed the peaks reached in early 2008,” Scott Russell, Real Estate Board of Greater Vancouver (REBGV) president said. “We’re coming off several months of unseasonably high sales levels, which has allowed for a gradual increase in home values this year,” Read more
