Category Archives: Blog

Flaherty Admits Mortgage Rules May Slow Growth

There’s no doubt about it.  The Canadian government is determined to head off a housing bubble – no matter what the cost.  After all, we do have an international reputation to protect.  When the governor of the bank of Canada was named chairman of the international Financial Stability Board, Mark Carney credited his appointment to “the strong reputation of Canada’s financial system and the leading role that Canada has played … Read More

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Beat the Mortgage Tightening Deadline

One week ago, the department of finance announced its latest round of mortgage rule tightening.  The four rule changes are as follows: Reduce the maximum amortization to 25 years from 30 years. Lower the maximum amount Canadians can borrow when refinancing to 80% from 85% of the value of their homes. Reduce the maximum gross debt service ratio to 39% from 44% Limit the availability of government-backed insured mortgages to … Read More

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Mortgage Refinance versus Mortgage Rates

With the ability to control mortgage rates stripped from the hands of federal policy makers, they’ve had to look for alternative methods of moderating housing prices and Canadian debt levels.  Four rounds of mortgage rule clamp downs in as many years is testament to our government’s yearning to intervene in this area.  Aside from the dramatic reduction in the maximum amortization, the biggest change has been the elimination of high … Read More

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Mortgage Amortizations versus Mortgage Rates

The federal government would love to tweak mortgage rates and control housing growth and debt loads, but worldwide economic events has taken that key control lever out of their hands.  Their alternate mechanism of choice has been to tweak mortgage rules.  They’ve taken such a fancy to this idea that they’ve tightened mortgage rules 4 times in as many years.  The main mortgage rule the ministry of finance has tightened … Read More

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CMHC Back to Basics

The latest round of mortgage rule tightening brings Canada Mortgage and Housing Corporation’s (CMHC’s) mortgage rules back in line with its original mandate.  Helping Canadians buy their first home.  CMHC was established in 1946 as a government-owned corporation to address Canada’s post-war housing shortage.  Over the years scope creep entered the picture and the government insurer began meeting market needs by allowing borrowers to refinance their homes to 95% of … Read More

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Mortgage Rates Not Going Anywhere

The federal government along with the Canadian Central Bank is growing increasingly concerned with our low interest rate environment.  Traditional thinking stipulates that these low rates are un-natural and in time, when the global economy rights itself, interest rates will rise to 6%-7% back to their natural norm.  This is a reasonable expectation although as time goes on the strongest argument in favor of the 6.5% natural interest rate theory … Read More

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Flaherty Tightens Mortgage Rules

The department of finance ambushed the financial services industry late Wednesday with the announcement that they are tightening mortgage rules.  Just 2 weeks ago the Office of the Superintendent of Financial Institutions (OSFI) released mortgage rule changes after weeks of deliberation and industry feedback.  Apparently the government didn’t like the process or the results and heavy handed a few changes of their own. The changes announced are a reduction in … Read More

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Mortgage Penalty Loophole

Mortgage penalties are a fact of life for mortgage holders. When it comes time to sell your house or refinance your mortgage you’ll rarely find yourself near your renewal date.  Mortgage penalties are not always a bad thing though.  They can be associated with the better option, especially if you are breaking your term to get a better mortgage rate. After all, it’s about saving money over the life of … Read More

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Eliminate Your Mortgage Sooner

Mortgage pre-payment privileges not only allow you to make annual lump sum payments, they also allow you to increase the amount of your mortgage payment each year.  These pre-payment privileges are usually described as 15% + 15% or 20% + 20%.  The greater the percentage the more you are allowed to increase your regular payments.  There are two numbers given because the first is the annual lump sum percentage and … Read More

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Is Your Mortgage Prepayment Privilege 20/20?

Mortgage pre-payment privileges are an important component of any mortgage, but they are often confusing and misunderstood.  A major challenge is that although each mortgage company is familiar with their mortgage terms they are unclear with the rest of the market and how they compare.  In an effort to simplify their meaning mortgage lenders will advertise terms like 15% / 15% or 20% + 20%.  If these terms meant the … Read More

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