all posts marked Buyers

Bank of Canada Holding for now

Thursday, January 10, 2019Norm Rousseauposted in Buyers

Bank of Canada announces interest rate decision

by Canadian Press 09 Jan 2019

The Bank of Canada left its trend-setting interest rate unchanged at 1.75% on Wednesday as the sharp decline in oil prices temporarily dims its economic outlook for the coming months.untitled

Before long, however, the central bank expects the economy to expand with renewed vigour. More rate hikes, it stressed, will be necessary “over time”.

It just got harder to qualify for a mortgage

Monday, May 14, 2018Norm Rousseauposted in Buyers

Market update

by Steve Randall | May 10, 2018

An important number that affects the ability of millions of Canadians to qualify for a mortgage has changed.

The Bank of Canada has raised its conventional five-year mortgage rate from 5.14% to 5.34%.

The rate is the one used for stress tests under the B-20 mortgage lending guideline so any borrower with less than a 20% down payment seeking mortgage insurance must be able to afford payments.

For those who do not require mortgage insurance, the rate is one of the two stress test benchmarks used, the other being the contractual mortgage rate plus two percentage points.

The Canadian Press says that the rate increase coincides with an estimated 47% of mortgages that are due for refinancing in 2018, based on a CIBC Capital Markets report.

The big five banks have also recently increased their 5-year FRM rates. When Toronto Dominion increased its rate is was called the “biggest move in years”.

Stricter mortgage rules could be in place by January 2018

Wednesday, October 4, 2017Norm Rousseauposted in Buyers, Sellers

By the end of October 2017 we should have a clear idea of proposed changes to mortgage lending regulations with updated B-20 rules implemented within two to three months.
Speaking at an event in Toronto, OSFI superintendent Jeremy Rudin said Tuesday that much of what will become the updated regulations will be what the regulator set out in July which includes a stress test for all uninsured mortgages.iStock_document-paperwork-reading-signing-verifying-check_000028626732_Small
He told the Economic Club of Canada audience that the Office of the Superintendent of Financial Institutions is concerned about the high levels of consumer debt and high real estate prices in some markets.
"We are not waiting to see those risks crystallize in rising arrears and defaults before we act," Mr Rudin stated.
The superintendent says that it has never been more important for mortgage lending underwriting criteria to be strong and that the system needs a “certain integrity.”
Mr Rudin said that although there is a risk of more borrowers using unregulated lenders for mortgages that did not preclude OSFI from taking necessary steps within its mandate.

Buyers work around mortgage stress test

Tuesday, July 18, 2017Norm Rousseauposted in Buyers

by REP17 Jul 2017

A new report reveals Canadian sentiment about home buying in Canada – including just how impactful the stress test might be.

In its latest report, entitled Consumers’ Perspectives on Home buying in Canada, Mortgage Professionals Canada aimed to simulate what percentage of prospective homebuyers would be impacted by the stress test policy that requires high ratio buyers to qualify at the posted rate of 4.64%.mortgage_rules_concept

According to the simulation – which included buyers with less than 20% down payment who could afford a market interest rate of 2.6% -- 20% would fail the stress test and therefore would not qualify for mortgage financing.

Of those who would fail, 45% said they would increase their down payment amount; 45% said they would buy a less expensive home; 20% would look outside their original targeted region; 39% would delay their purchase; 5% would do something else; and 7% did not know what to do.

I saw a house for sale

Friday, February 24, 2017Norm Rousseauposted in Buyers, General
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