Category Archives: Mortgage Information

Bank of Canada Keeps Interest Rates Steady

On July 13th, the Bank of Canada announced it would maintain its target overnight lending rate at 0.5%. On this same day, the advertised five-year lending rate was 4.74%, which is 0.1% higher than the last rate announcement.

According to the Canadian Real Estate Association, “The announcement repeated many of the themes from its announcements and Monetary Policy Reports published in late 2015 and early 2016. Chief among these themes is how the Bank is still counting on the continuation of low interest rates and stronger U.S. economic growth to buoy Canadian exporters amid ongoing weakness in Canadian business investment. However, the Bank again reduced its annual forecast for Canadian economic growth in light [of] ‘a weaker outlook for business investment and a lower profile for exports reflecting a downward adjustment to US investment spending.’ It also recognized how recent economic growth was reduced by the Alberta wildfires; however, it expects Canadian economic growth will pick up in the third quart as oil production resumes.”

The next rate announcement from the Bank of Canada is scheduled for September 7th.

More Mortgage Consumers Turning To Social Media For Info

The Canada Mortgage and Housing Corporation has released its 2016 Mortgage Consumer Survey, with the biggest finding being that an increasing number of mortgage consumers are turning to social media for their mortgage information. This change is highest among first-time buyers and consumers who are using a mortgage broker.

“Understanding the way active Canadian mortgage consumers behave and what they are looking for allows mortgage professionals to provide better service and improve the overall customer experience,” said the vice president of client relationship management for the Canada Mortgage and Housing Corporation, Nathalie Fredette.

Also according to the survey, consumers who are receiving advice on long-term strategies were almost twice as likely to recommend their mortgage professional to those close to them, while first-time buyers are more likely to get advice from family and real estate agents. In addition, the biggest concern for first-time buyers was unforeseen costs.

Bank of Canada Keeps Interest Rates The Same

On May 25th, the Bank of Canada announced its trend-setting overnight lending rate would remain at 0.5 per cent. The advertised five-year lending rate is 4.64 per cent, which is the same as one year ago.

According to the Canadian Real Estate Association in a press release, “The Bank indicated it expects that recent wildfires in Alberta will cause the Canadian economy to shrink slightly in the second quarter and then rebound in the third as oil resumes production and reconstruction begins in affected communities. With inflation largely in line with the Bank’s expectations and the economy continuing its uneven adjustment the Bank of Canada is likely to keep interest rates on hold well into 2017.”

The next scheduled Bank of Canada interest rate announcement will be on July 13.

Items To Bring Your Lender For A Mortgage Pre-Approval

When you visit your lender for a mortgage pre-approval before shopping for a home, make sure you don’t forget to bring the following items:

Information proving your ability to cover closing costs (approximately 1.5 per cent of the purchase price).

Proper identification like a driver’s license.

Proof of your ability to pay the down payment and where this money is coming from.

An employer letter confirming your salary.

Information on additional income sources.

Information on your current debts and liabilities, such as loans or credit cards.

Why do you need a mortgage pre-approval?

A mortgage pre-approval tells the seller and their agent that you’re qualified and serious about buying a home – something especially important in such a competitive real estate market. It also lets you know what you can afford, and how much wiggle room you have when it comes to making an offer.

If your lender doesn’t require these items to issue a mortgage pre-approval, find a new lender – if your lender doesn’t do their do diligence in pre-approving you, you may think you qualify for something you don’t qualify for and financing can fall apart at the last minute. This is an incredibly disappointing situation for both buyers and sellers, but can also be avoided.

2015 Toronto Housing Starts Momentum Continues In The New Year

According to the latest statistics from the Canada Mortgage and Housing Corporation, Toronto Census Metropolitan Area housing starts were trending at 45,114 units during January 2016, up from December’s 44,834.

“With respect to Toronto housing starts, last year’s momentum continued throughout January,” said the Canada Mortgage and Housing Corporation principal marker analyst for the GTA, Dana Senagama. “Low inventory in the resale market and increased new home sales over the past couple of years led to stronger starts of both low and high-rise units.”

January’s standalone monthly seasonally adjusted annual rates of housing starts was 25,329 units, up from December’s 24,732 units.

The City of Toronto itself took the number one spot for highest number of starts due to 725 new apartment units being constructed, followed by Brampton and then Milton.

For more data on Canadian housing starts, visit the Canada Mortgage and Housing Corporation website here.

Canadian Regional Housing Outlook: TD Economics

TD Economics has released its Canadian Regional Housing Outlook report, finding that you can easily categorize the Canadian housing markets into three separate categories: Struggling, booming and stable.

“Struggling” includes the major markets in Alberta and Saskatchewan (Regina, Saskatoon, Edmonton, Calgary), “booming” includes Toronto and Vancouver as well as the surrounding areas of each city, and “stable” covers the rest of Canada.

Vancouver and Toronto are the only markets in the country with average home prices between $500,000 and $1,000,000, where the new mortgage rules demanding higher down payments for homes in these prices ranges are expected to have any impact. In addition, the report said that, “Toronto and Vancouver are heading into 2016 with considerable momentum,” and that the average home price in Toronto increased by 14.1 per cent in January 2016 over January 2015.

For more, check out the full TD Economics report here

RBC Releases Latest Canadian Housing Trends And Affordability Report

RBC has released its latest Canadian Housing Trends and Affordability Report, offering a snapshot of housing affordability trends across the country. All major and some not-so-major markets are mentioned, and the report makes key mention of the Toronto market as a whole.

Toronto property values have increased by double-digit numbers year over year, and despite worries about the boom in condo construction even condo prices increased by 4.4 per cent year over year.

Craig Wright, the chief economist for RBC, said that, “The Toronto-area housing market featured an apparently insatiable appetite of buyers who are willing to pay ever-rising prices. Home resales blasted through the previous threshold (95,160 units in 2007) to set a new record of 101,850 units last year, up 9.3 per cent from 2014. Continued low interest rates and a solid job market helped maintain a positive environment for homebuyers.”

Wright continued, “A major side effect of the intense heat in the Toronto-area market is the rapid deterioration in affordability, particularly for single-detached homes. RBC’s aggregate affordability measure rose steadily in 2015 to 60.6 per cent in the fourth quarter, a level unseen since 1990.”