A Recovery for the Ages: Against all odds, and despite the biggest unemployment surge in a 3-month span ever, stocks have erased 2020 losses.
S&P 500 Stock Index
ICYMI: Private default insurer Genworth Canada saw no need to follow CMHC and tighten its mortgage rules. Canada Guaranty, which has the lowest loss ratio in the mortgage insurance industry, made the same determination, saying, “Given implementation of the qualifying stress test and historic default patterns, Canada Guaranty does not anticipate borrower debt-service ratios at time of origination to be a significant predictor of mortgage defaults.”
Still Allowed: CMHC is not banning all borrowed down payments. It will still allow down payment funds that originate from:
A loan from one’s own RRSP (using the Home Buyers Plan).
A HELOC on another property that the borrower owns.
A HELOC on a property their parents own (if the parents gift those funds to the borrower).
Note: CMHC will no longer allow down payment funds from unsecured borrowing. That includes from a HELOC on a property the borrower’s parents own — if the parents loan those funds to the borrower.
CMHC adds that “eligible traditional sources of down payment may include: savings, the sale of a property, non-repayable financial gift from a relative, funds borrowed against their liquid financial assets, funds borrowed against their real property, or a government grant.”
It’s Now Official: Our neighbour to the south is in recession.
Double the Deferrals: Canada’ has nearly twice as many people deferring mortgage payments than the U.S.
BMO cuts: The nation’s #4 bank dropped the following special fixed rates today:
Record Home Prices?: It’s almost like GTA home prices are taking their cues from the stock market. If HouseSigma’s estimate is right and the trend continues, GTA home values could potentially set a record in June.
As Expected: As the pandemic began taking a toll on incomes in March, people tapped their HELOCs at a faster clip.
Brokers Kill It: Despite all the headwinds from online competitors, banks, a slowing economy and mortgage regulations (or perhaps because of mortgage regulations), Canada’s two leading mortgage broker firms are cleaning up. Dominion Lending Group posted a vigorous 30% growth rate and $8.4 billion of closed mortgages in the first quarter. Meanwhile, Rival M3 Mortgage Group told the Spy it closed 32% more deals and $9.3 billion in Q1. M3’s EVP Dino Di Pancrazio said:
“Our brokers are less reliant of walk-in traffic and most are used to doing business at a distance.” They’re also used to “advising customers in many different financial situations and I think that this became increasingly valuable as some people saw their salaries cut or lost their jobs. Of course, once real estate was shut down that pretty much shut the door on new deals, but that happened in March for the most part…”
One Less Tax Grab: Manitoba will no longer require insured borrowers to pay PST, effective July 1. Go, Manitoba!
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I think the Bank of Canada will wait to see how many people get their jobs back before even thinking about a rate hike. That could take until 2022 from what I read.
I would be happy if Bank of Canada keeps the same rate or even lower it further (that’s me greedy talking) as i have prime – 1.3 rate. Less interest is always preferred.
@ Poor – my rate (Prime -1.3%) was confirmed when prime was 3.95%. With 150 BPS deduction in next 1 month brought my rate down to 1.15% today .
I must add here that I bought house with 15K over asking and just a month from purchase, the house price fell down aignificantly so I lose there too. Hopefully market will recover in next 5 yrs. If I decide to sell. I am in GTA.
@ Just saying,
Thanks for the reply. Good luck on your new house.
Your rate is fantastic! In Ottawa, house is being sold at least 60K+ over the asking price. Tough time for first time home buyer.
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I think the Bank of Canada will wait to see how many people get their jobs back before even thinking about a rate hike. That could take until 2022 from what I read.
I would be happy if Bank of Canada keeps the same rate or even lower it further (that’s me greedy talking) as i have prime – 1.3 rate. Less interest is always preferred.
@Just saying
How do you get such a variable rate? when and from what lender?
@Just saying,
what is the prime rate?
@ Paul – I got simply lucky as I locked it in early March just before the C- Virus started taking control here.
@ Poor – my rate (Prime -1.3%) was confirmed when prime was 3.95%. With 150 BPS deduction in next 1 month brought my rate down to 1.15% today .
I must add here that I bought house with 15K over asking and just a month from purchase, the house price fell down aignificantly so I lose there too. Hopefully market will recover in next 5 yrs. If I decide to sell. I am in GTA.
@ Just saying,
Thanks for the reply. Good luck on your new house.
Your rate is fantastic! In Ottawa, house is being sold at least 60K+ over the asking price. Tough time for first time home buyer.