If you’re among theroughly 1 in 6 conventional borrowers withthe highest debt ratios, OSFI’s new mortgage stress test could keep you from: buying the home youwant (which may be a good thing) renewing at better rates with another lender, or refinancing to lower your debt burden. That’s making hundreds of thousands of borrowers somewhat anxious.It’s why we’re seeing a small...
On Tuesday thegovernmentannounced a January 1, 2018, implementation date for its new uninsured mortgage stress test. In that announcement it said something else thatmany glossed over: “Where possible,federally regulated financial institutions are expected to comply with the principles and expectations set out in this guideline as of the date of this letter [October 17, 2017].” OSFItold ustoday, “Banks are expected...
Below are importantclarifications on Canada’s newB-20 mortgage rules. Most of this stuff was not explicitly discussed in OSFI’s announcementyesterday. But if you’re getting a mortgage or HELOC, it’sneed-to-know info. Amortization Limits: One way to partially mitigate the new stress test is by extending your amortization.“OSFI has not included specific references to a ‘qualification’ amortization rate in its final Guideline B-20....
We allknew it was coming, but now the reality sets in. The ruler of Canadian banking (OSFI) has solidifieda rule change that’ll impactmore mortgagorsthan any rule we’ve seen to date. Here’s a synopsisI wrotefor the Globe and Mail if youneed aquick summary.The gist is this: Effective January 1, 2018, anyone with20%+ equity whowants a lowrate will have to prove they...
Private (non-prime) lenders are gettingtapped out across the country. Fisgard Asset Management Corporation, one of Canada’s largest mortgage investment corporations (MICs), is no exception. “It’s a dynamic time right now,” says Hali Noble, SVP atFisgard. She explains thatHome Capitals’ near-failure, Equitable Bank’s funding problemsand government rule tighteninghave spikeddemand for private mortgages.The company, whichmanages $240 million in loans,has almost fully utilized...
Canada’sbanking overlord, OSFI, is proposing a new 2-percentage-point (200-bps) “stress test” for people getting uninsured mortgages. Unlike the current stress test, which is based on onerate (the Bank of Canada posted 5-year, currently 4.64%), this new one is a frequently moving target. At200 bps above the borrower’s contract rate, it would fluctuate significantly based on the lender and term selected....
OK, how do I put this in a way that doesn’t sound over the top or like fear mongering? There was this mortgage rule proposal today, and it was a Whopper. No. Actually, it was largerthan that. More likea BK Quad Stacker with extra bacon, cheese and Stacker sauce. It was big. The potential rulesannounced this morning were put out...
Aspreviously announced, CMHC is jacking up default insurance premiums on Canadian borrowers. Effective today, anyone purchasing a homewith less than 20% down will fork overup to 1.00%-point more in fees. If you’re down payment is: Less than 10%: You’ll pay 0.40% more, or 4.00% Between 14.99 and 10%: You’ll pay 0.70% more, or 3.10% Between 19.99 and 15%: You’ll pay...
What a coincidencethat TD boosted its mortgage prime rate and OSFI implemented its new bank capital requirements, both on the same day (November 1). Or not. RBC Capital Markets issued a report Tuesday suggestingthe twomay have beensomewhat linked. It predicts further rate hikes to come: “We believe TD’s rate increase may be just the first move ina series of mortgage...
Everything’s a risk these days. You can’t even kiss your dog for risk of contracting somezoonotic disease. Even prime insured mortgages—where theodds of a borrower defaulting are less than your odds of being on a plane with a drunken pilot—are suddenly too risky. Ottawa’s mortgage police claimthey’re worried aboutthe risk of shoddyunderwriting so they’re making lendersshare more losseswhen insured mortgages...
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