Category Archives: mortgage

Interest rates shoot higher

Southseacompany pointed out this article about rising interest rates around the world:

The bond market is getting a wake-up call from global central banks that the post-financial crisis era of easy money and super low interest rates is coming to an end.

In what was a sizzling move for the Treasury market, the 10-year yield zipped higher Tuesday amid talk that the Bank of Japan could finally be ready to wind down its easy policies. The 10-year yield broke above the key 2.50 percent level and was trading as high as 2.55 percent, the highest since March.

The 10-year is key since it is a benchmark that mortgages and many other consumer and business loans are based on.

Read the full article here.

Mortgage carrying costs to rise 8% next year

Scotiabank is forecasting a big bump in mortgage carrying costs:

New buyers can expect home ownership to become even less affordable next year as mortgage costs rise, while current owners will be largely insulated from higher rates.

Add it all up, and the bank forecasts that Canada’s housing market seems to have “peaked” and is expected to cool down from its recent breathtaking pace.

Read the full article here.

CMHC looks to make mortgages easier to get

The CEO of the Canadian Mortgage and Housing Corporation has said that requiring new Canadians and the self employed to prove income is ‘discriminatory’ and they are looking to make mortgages easier to get:

“Right now, under our mortgage insurance policies, you have to be able to document income to get mortgage insurance, to a level of specificity that discriminates against new Canadians, because they can’t do that,” Evan Siddall, the CEO of the Canada Mortgage and Housing Corp., said in a wide-ranging interview with The Canadian Press.

“It discriminates against entrepreneurs, as well, because they can’t prove their income as well, so we’re looking at our own policies to try and make sure that there is more equity in our mortgage insurance programs,” he said.

Read the full article here.

New regulation lead to 44% drop in CMHC mortgages

If you’re buying with less than 20% down, you’re a ‘high-risk’ borrower and you’re probably using CMHC insurance on your mortgage. New regulations are having a big impact on buyers in this zone with new CMHC mortgages dropping by 44%. Bullwhip29 pointed out this article in BIV:

Through the first half of 2017, CMHC-insured mortgages had dropped to 95,000, down from 118,000 in the first half of 2016.

In October 2016, the federal government began a stress test for approving all high-ratio insured mortgages with terms of five years or more. It required such borrowers to prove they can handle payments at the Bank of Canada’s posted five-year rate, which is about twice as high as the lowest lending rates available.

Read the full article here.

The Triple Rate Hike Year

It’s been so long since rates were rising we’ve forgotten what it’s like, and yet it seems the tide is turning. Southseacompany points out this article over at the Financial Post: Three rate hikes this year?

The Bank of Canada raised interest rates on Wednesday, surprising many, and left the door open to more rate hikes in 2017 even as it pledged to pay attention to how higher borrowing costs would hit Canada’s indebted households.

To find out what a bunch of economists think, read the full article here.