Mortgage News article this morning
by Steve Randall | 11 Dec 2015
The federal finance minister has scheduled an announcement for Friday morning at 9.30 which is widely anticipated to be about the housing market. Reuters reports that the announcement may set out the government’s plans for cooling the housing market, which could include the rumoured hike in minimum downpayment for CMHC-backed mortgages.
CTV article on proposed increased down payment requirements for home buyers
The new regulations will increase the minimum down payment required to buy a home for more than $500,000, with portions beyond that amount requiring a 10 per cent down payment. The down payment on the first $500,000 will remain at five per cent. see more ..................
Below is an article of regarding a recent C.D. Howe study warning that 1st-time homebuyers form a larger segment of home owners have mortgages 5 times their earnings leaving them more vunerable if they haven't saved a reserve fund to help them through either future higher interest rates or job loss.
My experience working with many 1st- time home buyers is they often qualify for alot more that they are willing to spend for their 1st home. They want some disposable income available for other lifestyle choices but in today's hot market they are feeling the pressure to spend more to get into the market. Comments and your thoughts appreciated below
1st-time homebuyers at risk because of heavy mortgage debt, says C.D. Howe study
CBC News Posted: Dec 09, 2015 12:52 PM ET Last Updated: Dec 09, 2015 3:28 PM ETv
Scotia Mortgage Authority raises rates effective today
|
Term |
Revised EVP Rate |
|
1 Year Fixed |
2.94% |
|
2 Year Fixed |
2.44% |
|
3 Year Fixed |
2.64% |
|
4 Year Fixed |
2.79% |
|
5 Year Fixed |
2.99% |
|
7 Year Fixed |
3.64% |
|
10 Year Fixed |
4.14% |
I have been receiving news of possible changes being implemented under a Liberal plan to help cool off the hot housing market. I think these are not extreme measures and something that should have been implemented a few years ago when they reduced the minimum downpayment for a conventional mortgage to 20% LTV. Below are a couple of recent articles to provide you more information .
From Broker News
by Steve Randall | 03 Dec 2015
Minimum downpayment could rise under Liberal plan
The Liberal government could be about to impose tougher restrictions on homebuyers by raising the minimum downpayment for a government-insured mortgage. Mortgage expert Robert McLister says that there could be a sliding scale of downpayment requirements depending on the price of the home. The Huffington Post reports that it could mean a 10 per cent minimum for those buying a home of $700,000 or more; which would particularly hit those in Toronto and Vancouver where average prices are already above that level. Those buying a home above $501,000 would have to find 7 per cent as a minimum. The Finance Department told HuffPost Canada that it does not comment on unconfirmed policy options but that it regularly reviews policies in consideration of the housing market and wider economy.
Below is the anoucement from the Bank of Canada Web site
Bank of Canada maintains overnight rate target at 1/2 per cent
The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.
Global economic growth is evolving essentially as the Bank had anticipated in its October Monetary Policy Report (MPR). The US economy continues to grow at a solid pace, although private domestic demand has proven slightly less robust than expected. Meanwhile, commodity prices have declined further. The ongoing terms-of-trade adjustments and shifting growth prospects across different regions are contributing to exchange rate movements. In this context, policy divergence is expected to remain a prominent theme.
In Canada, the dynamics of growth have been broadly in line with the Bank’s MPR outlook. The economy continues to undergo a complex and lengthy adjustment to the decline in Canada’s terms of trade. This adjustment is being aided by the ongoing US recovery, a lower Canadian dollar and the Bank’s monetary policy easing this year. The resource sector is still contending with lower prices for commodities. In non-resource sectors, exports are picking up, particularly in exchange rate-sensitive categories. However, business investment continues to be weighed down by cuts in resource-sector spending. The labour market has been resilient at the national level, although with significant job losses in resource-producing regions. The Bank expects GDP growth to moderate in the fourth quarter of 2015 before moving to a rate above potential in 2016. While bond yields are slightly higher, financial conditions remain accommodative in Canada. Read More...........
Keeping you up to date with the rise in mortgage interest rates
Meridian Credit Union - changed their 5 year fixed rate (Income qualifying) to 2.89% effective 6 November 27th.
Scotia Mortgage Authourity effective Dec 2nd Scotia 5-Year Flex Value Mortgage Closed-Term to Prime – 0.20%
Opportunities Are Never Lost
Someone Will Take The One You Miss!
Today there is a shortage of listing inventory creating a Sellers Market
Which means Multiple Offers / Homes Sold before you get a chance to see them!
Historic Low Interest Rates on the rise - Prices for homes on the rise!
Don't be discouraged
In Owning a Home you will build equity as an Investment for your Future
We all need a place to Live so Why not Invest in Your Future Not Your Landlord's
We will help you navigate through the Buying Process to find that perfect home!
As a full time Real Estate Broker with 20 yrs of experience, utilizing my building experience and negotiating skills through Seller and Buyer markets - helping 1st Time Buyers find that perfect home is still one of the most gratifying experiences.
Call Jim or Ben today to buy your 1st home!
Homes for first time buyers for sale in Durham Region
We have kept you informed on recent blog posts of the past Mortgage Rate hikes and although the hikes have been modest I beilieve we will see the roller coster on rates as we have in the past. I don't forsee any significant rate hikes in the near future and if that changes I will keep you informed. Below is an online Globe and Mail article commenting on the recent changes in interest rates.
TAMSIN MCMAHON - REAL ESTATE REPORTER
The Globe and Mail
Published Tuesday, Nov. 24, 2015 4:43PM EST
Last updated Wednesday, Nov. 25, 2015 9:46AM EST
Mortgage rates are on the rise in Canada, a trend that could cool the housing market even as the economy struggles to recover from the effects of low oil prices.
Lenders have already begun boosting their mortgage rates from their September lows. Five-year, fixed-rate mortgages, which represent the largest share of Canadian mortgages, have risen by as much as 20 basis points in the past two months as Canadian government bond yields have moved higher. (A basis point is 1/100th of a percentage point.) Variable-rate mortgages are seeing their first sustained increase since 2012.
While the increases are small, they represent a significant reversal from the trend that has shaped the mortgage market for much of the year. Mortgage rates plunged to historic lows on the heels of two Bank of Canada interest rate cuts in January and July, helping to boost national resale home prices by more than 4 per cent compared with the same period last year.
With the U.S. Federal Reserve widely expected to raise interest rates next month, Canada’s fixed-mortgage rates could rise by another 60 to 70 basis points, estimates Toronto-Dominion Bank economist Diana Petramala. That could drive down national existing-home sales by as much as 10 to 15 per cent over the following six months, based on how the housing market has historically responded to changes in interest rates and the fact that Canadians have become sensitive to even small increases in mortgage payments, she said. ...... Read More
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