If you have a mortgage that floats withprime rate, the constant chatter about rate hikes may be unnerving. Well,now you can take a breather—because the Bank of Canadahas taken a breather. The Bank left rates alone today and hinted that future rate hikes may be further off than economic forecasts suggested. If you had to sum upits announcement today in...
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...
Scotiabank’s out with a new prediction. The nation’s #3 mortgage lender says rising rates will cause average mortgage carrying costs for new buyers tojump8% in 2018 and another 4% in 2019 (assuming stable home prices). “Further rule changes, including more stringent stress tests for uninsured mortgages…would exert additional drag on new buyers,” the bank noted. Existing mortgage holders, whom the...
If Donald Trump were aregular guy with a mortgage, he’d surely be appalled by all the fake rates in the media. You just can’t take rates at face value anymore. Considerthis column from our favourite personal finance author. The broker interviewed inthestory (we won’t name names) quotes three variable rates: For conventional mortgages on homes of $1 million or more:...
You’ve just made the biggest purchase of your life. After waiting months to close on your home, suddenly you’ve found yourself short $4,000. All too often, unnoticedcosts catch new homebuyers by surprise. That’s despite lenders commonly requiring “proof” that you can cover yourclosing costs. A TD home buyers survey found that 13% of first-time buyers “overlooked some of the one-time...
For now, the daysof sub-2% everyday mortgage rates areofficiallyover. Wednesdaymorning’s slightly surprising 1/4-point Bank of Canada hike was the nail in that coffin. The ensuing 1/4-point bump in prime rate will push all remaining mortgage rates above the psychologically key 2% threshold. By next week, the lowest rates shouldjump roughly as follows: Insured variable rates: From 1.89% to 2.14%+ Uninsuredvariable...
It’s been seven weeks since the Bank of Canada beganits first rate hike cycle in sevenyears. Butwith itsnext meeting on Wednesday, will it pull the trigger again? Derivatives prices imply there’s a 50% chance it does, and a 100% chance that it hikesby October. Prime rate would jump 1/4%-ptif the BoC does move. “We narrowly favour October over September, as...
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