Tag Archives: mortgage market

Mortgage Rates Stabilize

Ben Bernanke and the US Federal Reserve (Fed) shocked markets this week with the announcement that it will continue with it’s bond buy-back program.  This program, known as quantative easing or QE, is designed to keep bonds liquid and to force down yields or borrowing rates for bond issuers.  The net effect of lower bond yields is lower long term mortgage rates in Canada. Earlier this summer Mr. Bernanke hinted … Read More

Posted in Blog, Canadian Housing Market, Government Policy, Mortgage Rates | Tagged , , , , , , | Leave a comment

How Much Mortgage Debt is Too Much Debt?

The Canadian government is concerned about our level of consumer debt, including mortgage debt, and so are most Canadians.  When surveyed however, the vast majority of Canadians feel comfortable with their own level of debt.  The question remains, how much debt is too much debt. The yardstick our Department of Finance has been using is the ratio of debt to disposable annual income.  Let’s look at that at the household … Read More

Posted in Blog, Canadian Housing Market, Personal Finance | Tagged , , , , , | Leave a comment

Consumer Debt Levels Hit Record in Second Quarter

According to Statistics Canada, the ratio of household debt to disposable income increased to a record high of 163.4% in the second quarter.  The latest figure represents a 1.3% increase from a first quarter level of 162.1%.  Red flags over consumer indebtedness have been the main driver behind our governments mortgage rule tightening efforts over the past 4 years.  Four years ago this debt benchmark was hovering around the 155% … Read More

Posted in Blog, Canadian Housing Market, Personal Finance | Tagged , , , , | Leave a comment

Maxed Out and Ready to Refinance

The average non-mortgage debt held by Canadians has climbed by 3.47% to $27,131 over last year.  One reason behind the increase is the new mortgage rule limiting the amount you can refinance.  Canadians who have maintained their spending patterns can no longer use the equity in their house to wipe the slate clean.  Instead they are left with a mountain of high interest debt. While the new rule makes sense … Read More

Posted in Blog, Mortgage Rates, Personal Finance | Tagged , , , , , | 1 Comment

BMO Bumps 5 Year Mortgage Rate

Bank of Montreal (BMO) has bumped their “no frills” 5 year fixed mortgage rate by 20 bps to 3.79% effective today.  The move demonstrates the roller-coaster ride clients can expect if they choose the “no frills” option.  Less than a year ago, BMO made headlines by promoting this product at 2.99%.  The move was so bold that it warranted a phone call from the Department of Finance who was concerned … Read More

Posted in Blog, Mortgage Rates | Tagged , , , | Leave a comment

Flaherty Fights Growing Housing Market

July’s strong market results just may have been the latest tipping point for Ottawa and the Department of Finance (DOF).  A new government initiative to slow housing growth is restrictions on cost effective funding sources.  Canada Mortgage and Housing Corporation (CMHC) has already notified banks and other mortgage lenders that it’s putting a $350 million monthly cap on the amount of Mortgage-Backed Securities (MBS) that each lender can issue.  Although … Read More

Posted in Blog, Canadian Housing Market, Government Policy | Tagged , , , , , , , | Leave a comment

Jubilant July for Toronto Real Estate

The Toronto Real Estate Board (TREB) announced that 2013 brought the 3rd best July on record.  Not only did sales rocket by 16% but average sale prices also shot up by 8% to $513,246.  This is particularly good news for an industry that typically sees a summer slowdown July and August. The implication of these strong numbers is that tighter mortgage rules imposed by the Department of Finance (DOF) have … Read More

Posted in Blog, Canadian Housing Market, Government Policy | Tagged , , , , , | Leave a comment

Proud to Be Canadian!

I’m proud to be Canadian but even prouder to be a Canadian mortgage broker.  Our great country fared better then any other industrialized nation through the great real estate recession of 2008 that continues to linger today.  Foreign mortgage financing practices caused the massive economic downturn, but Canadian mortgage financing practices have kept our country stronger than others. What makes our mortgage system so strong is not individual rules, regulations … Read More

Posted in Blog, Canadian Housing Market, Personal Finance | Tagged , , , , , , , | Leave a comment

Spike in Mortgage Rates Temporary

The recent spike in fixed mortgage rates is a direct result of an incredibly sharp rises in bond yields.  I say incredibly because the market grossly over-reacted to Ben Bernake’s comment that the Fed will eventually begin to taper monetary stimulus.  Following this over-reaction, you can expect to see bond yields ease back nearer to their previous lows. Kent Engelke, chief economic strategist at Capitol Securities Management Inc., confirms that … Read More

Posted in Blog, Canadian Housing Market, Mortgage Rates, Personal Finance | Tagged , , , , | 1 Comment

Do You Qualify for the Average Home?

You need a household income of $77,700 to buy the average Canadian home.  Of course there is no average city so you’ll need to earn more or less income depending on where you live.  Here’s a chart released by the Royal Bank of Canada (RBC) outlining the minimum income needed to qualify for the average house price in select Canadian cities. City Average Q1 Price Qualifying Gross Income Canada $366,500 … Read More

Posted in Blog, Canadian Housing Market, Mortgage Rates, Personal Finance | Tagged , , , , | Leave a comment