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Here’s a daily helping of Canada’s latest mortgage news (the italics are the Spy’s 2 cents):
- First-time Buyers Can’t Save Down Payments Fast Enough to Keep Pace with House Prices (RATESDOTCA)
- Meanwhile, CMHC says it plans to launch a revised First-Time Home Buyer’s Incentive this spring, which reportedly boosts buying power (i.e., further fuels home prices)
- Pattie Lovett-Reid: Housing affordability is rapidly becoming a personal and political issue (CTV News)
- The Conservatives can’t wait to hold the Liberals’ feet to the fire on Canada’s housing crisis in the next election.
- 36% of young Canadian adults have given up on owning a home: RBC survey (BNN Bloomberg)
- Sad.
- Want to cool the housing market? Force banks to shoulder more risk (The Globe and Mail)
- A simplistic view that: (A) refuses to acknowledge how strictly regulated lenders already are, (B) ignores most meaningful mortgage risk metrics, and (C) doesn’t do a bloody thing to address the biggest cause of nosebleed prices: supply imbalances.
- There’s no ‘magic switch’ to reset home values: Liberal MP (BNN Bloomberg)
- Vaughan hints at new regs curtailing foreign and institutional speculation in next week’s budget.
- Time to break out the hoses in Canada’s overheated housing market (Toronto Star)
- An editorial promoting the end of “blind bidding” (a hugely unpopular tactic among home buyers, not so much by home sellers).
- More than half of Canadians want to buy while the housing market’s hot (Wealth Professional)
- Here’s how home prices compare to incomes across Canada (Global News)
- Using traditional metrics to explain why the housing market is so quaint.
- Tougher mortgage stress test won’t cool home prices, real estate experts say (The Globe & Mail)
- But if it’s coupled with other housing restrictions, then….
- Mortgage rules changing (Castanet)
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2 Comments
Not a comment, so much as a question. I have recently seen advertisements for products like the Manulife One account. The concept seems to be to have One account that is also your mortgage. As you have income, it goes against the mortgage principle and when you spend it just adds to the principle. Seems to make sense, then if you get a lump of money, your principle goes down, need more, your principle goes up! Good discipline should pay off the mortgage faster.
Any comments on that type of product?
Hey Chris,
I love this product if used the right way (and if the borrower can save each month after all expenses). Although I think the savings claims are a bit overstretched for a good percentage of M1 users.
What I love about it:
1) you save interest as your income offsets living expenses
2) it’s great for leveraged investing (because LOC sub-accounts can be firewalled from other borrowing, making tax tracking easier)
3) Manulife is one of few banks with fair prepayment penalties
4) it’s a great reverse mortgage alternative (especially if set up prior to retirement)
What I don’t love about it:
1) the LOC and mortgage rates are above market
2) you can’t get a discounted variable rate inside the M1.
Some people also dislike the $16.95 monthly fee but the overall interest savings overshadows that.
The most important tip I have for people who get an M1 is this. Don’t get it if you’re not a saver. The best way to use it is to pay down debt in the LOC portion and then periodically make a prepayment on the mortgage portion (using LOC funds). That moves borrowing from the mortgage portion to the LOC portion (so your deposits — like your paycheque — can start offsetting the debt).
It’s a product that really requires active management to use effectively.