YVR pointed out this article by Rob Mclister about the OSFI B-20 bombshell:
The new OSFI’s stress test rules will make 20% of the mortgage market not qualify or they will have to reduce their mortgage by 18% to qualify. That is before recent and future mortgage rate increases are factored in.
Roughly 80% of new big bank lending in the richly valued Toronto and Vancouver markets is low-ratio mortgage lending
OSFI’s stress test, as proposed, would slash buying power for prime buyers by roughly 18%
For non-prime borrowers, qualifying rates would immediately rocket into the 6% to 7% range
Read the full article here.
It’s the end of another week and that means it’s time for another Friday Free-for-all!
Let’s do our regular weekend open topic discussion thread, but this time we’ll skip the news round up.
Sometimes admins like to take summer vacations too.
Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!
With interest rates going up there’s good news and bad news for housing. It can make it tough for people who are stretched thin financially, but might be good news for people waiting to buy:
The people who will benefit are those who have a nest egg and have been waiting for the right time to buy a home, he said.
“The real winner here is somebody sitting on a $800,000 down payment who says I’m going to wait for prices to fall.”
Overall, interest rates will continue to rise, added Brander. He predicts mortgage-lending rates could increase by several percentage points in the coming years. But as long as those increases are incremental, like Wednesday’s announcement, the economy will be able to absorb it, he said.
Seems like it’s always a good time to be sitting on an $800k down payment, but maybe we’re just optimists. Read the full article here.
It’s the end of another summer week in the city and that means it’s time for another Friday Free-for-all!
This is our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–Condo flipping accelerating
–Rate hike looms with record debt
–Cracks in Green / NDP alliance?
–Everybody worried about house prices
So what are you seeing out there? Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!
Lots of key indicators are telling the Bank of Canada that it’s time for an interest rate hike.
After the survey’s release, the chance of a July rate hike rose to 84 per cent from about 70 per cent, according to Bloomberg. Nine of 16 economists polled by Bloomberg now expect the central bank to raise rates to 0.75 per cent in July from the current 0.5 per cent.
The survey is one of the key pieces of information that Mr. Poloz and his central bank colleagues use to set monetary policy.
It was conducted between early May and early June, just before Mr. Poloz and his deputies started publicly saying the economy has turned the corner from the devastating oil price collapse that began in 2014.
Read the full article here.