Category Archives: mortgage

Mortgages getting more expensive

Southseacompany shared this article, looks like everyone’s mortgage is going to get more expensive:

The Bank of Canada raised its benchmark interest rate to 1.25 per cent Wednesday and signalled that, barring certain risks, more hikes are likely in the rest of the year. That’s creating an unusual situation for Canadians: for the first time in years, those renewing mortgages will be faced with higher rates and an increase in payments.

Even before Wednesday’s decision, five of the country’s largest banks hiked five-year fixed rates 15 basis points to 5.14 per cent last week. (CIBC is still offering 4.99 per cent.) In a country where consumers have grown accustomed to low rates, and where households are burdened with record levels of debt relative to income, this kind of change is worth noting. A recent survey published by insolvency trustee MNP Ltd.found 48 per cent of Canadian respondents were $200 or less away from being unable to fulfill their monthly financial obligations, an eight point increase since September.

Read the full article over at Macleans.

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.