Tag Archives: governement policy

Non-Mortgage Debt on the Rise

Canadian non-mortgage related debt increased 4.6% in the fourth quarter over the same period last year bringing the average to $26,768, its highest point in 2 years.  This increase has many pundits scratching their heads trying to understand why Canadians aren’t getting the message.  Both the Bank of Canada and the Department of Finance have been so concerned about the amount of overall consumer debt that have been working to … Read More

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November Variable Mortgage Rate Forecast

The Bank of Canada’s last interest rate announcement was October 23rd and as expected there was no change in the overnight interest rate.  Variable mortgage rates are tied directly to the prime rate of interest which is in turn tied directly to the overnight interest rate.  No change in the overnight rate means no change to your variable rate mortgage. The Bank of Canada only meets 8 times per year … Read More

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Why You Need CMHC Insurance

CMHC provides mortgage default insurance to the lender in case the borrower defaults and there isn’t enough money after a sale to pay-out the mortgage.  There are 2 other Canadian mortgage default insurers in Canada that provide identical products, Genworth Financial and Canada Guarantee. Regulated financial institutions are prohibited from lending beyond 80% of the value of your home unless they obtain this mortgage default insurance.  Although this premium is … Read More

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Self Employed Excluded From Home Ownership

Most Canadians are now familiar with the fact that mortgage rules have been tightened 4 times in 4 years by the Department of Finance.  What many don’t realize is that OSFI, the regulator of all Canadian Financial Institutions, is using its new found powers to tighten mortgage lending even further.  It recently imposed a new set of rules for mortgage lenders that’s been titled B-20. Perhaps the most restrictive component … Read More

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Flaherty Slams on the Brakes

The issue of Canadian debt levels has found a permanent place in the news.  Specifically, increasing levels of consumer debt is being cited as the reason for Jim Flaherty’s need to tighten mortgage rules yet again this summer.  With Canadian debt to income ratios approaching US pre-crash levels there’s been much panic that a US style Real Estate crash is coming to Canada. The primary reason for higher debt levels … Read More

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Debt Levels Not Too High

It seems callous to say it, but Ottawa is making too much noise about Canadian debt.  Of course we’d all like to be debt free and there are some of us who are in over our heads struggling with job loss and debts payments, but that’s not what Ottawa’s targeting.  Mark Carney and the Bank of Canada have been looking at the national debt to income ratio which can be … Read More

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Mortgage Rules Squeeze Out First Time Buyers

Canada’s Minister of Finance, Jim Flaherty, has tightened mortgage rules 4 times in as many years.  The objective was to slow down the housing market and to keep Canadians from racking up too much debt.  Speaking on CBC radio this past weekend, Mr. Flaherty indicated that no more rule tightening will be done.  “We’ve done enough, I do not intend to do any more” Mr. Flaherty announced on the radio … Read More

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The Real Estate Divide

Canadians have always been proud of our capitalist society with a strong middle class.  As we gain wealth nationally we’ve improved the standard of living of all our income bands.  We’ve avoided the great divide between the rich and the poor that exists south of the boarder.  The new economy however threatens all of that. Our elected officials are governing us as if we all have the same net worth … Read More

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CREA Cuts Forecasts

The Canadian Real Estate Association (CREA) cut its home sales forecasts for 2012 and 2013 and lowered its national average price predictions in a report issued earlier today. The new forecast eliminates 8,900 transactions from the previous 2012 forecast, but still calls for growth of 1.9% over 2011.  Of bigger concern is the 1.9% reduction in transactions forecast for 2013 bringing us back two years to the 2011 activity of … Read More

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Strong Loonie Keeps Mortgage Rates Low

The Canadian dollar rallied to a 13 month high against the US greenback on news that the Federal Reserve plans to purchase bonds.  The US central bank indicated that it would maintain interest rates near 0.0% until 2015 and begin buying mortgage securities to fuel economic growth.  That announcement spurred investors to dump low yielding US assets in favour of more lucrative Canadian investments.  One Canadian dollar buys $1.03638 US. … Read More

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