—The Mortgage Report: July 23— Forget Posted-rate Cash-back Mortgages: Many borrowers with less than 20% down aren’t just short on down payment funds, they’re short on closing costs too. And that’s a problem, because lenders want to ensure buyers have at least 1.5% of the purchase price available for closing costs. If you can’t easily swing that, there are now...
—The Mortgage Report: July 22— Rate Influencers: When people ask, “What’s the best rate?” most just want you to reel off a number with minimal complexity. Many don’t realize all the elements that determine mortgage pricing. That’s why it’s almost impossible to spit out an accurate quote on the fly. If you want a standard 5-year fixed, for example, factors...
—The Mortgage Report: July 21— A Seldom-used Strategy: Usually, it doesn’t make sense to buy default insurance on your mortgage if you have a big down payment. But there are exceptions, like when you have 35% equity and the difference between insured and insurable mortgage rates is 15 basis points or more. In those infrequent cases, you end up saving...
—The Mortgage Report: Weekend Edition— It Might as Well Have: On Wednesday, the Bank of Canada threw caution to the wind and changed its playbook. It pledged not to hike rates until “the 2 percent inflation target is sustainably achieved.” The significance of that statement is now sinking in and here’s why. Normally, the Bank of Canada doesn’t wait for...
—The Mortgage Report: July 13— False Start: Parts of the U.S are going back into lockdown, Fed officials are warning the economy is regressing and Ottawa is extending wage subsidies until December. That’s the kind of ominous news that makes people buy bonds. And if enough investors think the economy is heading back into the toilet, bonds will go up...
—The Mortgage Report: Weekend Edition— Renewal Tax: Borrowers get worse deals on mortgage renewals than on brand new mortgages. And it’s been that way for decades. Interest rates on renewals have historically been about nine basis-points (0.09%) higher than rates on new mortgages. That’s based on a survey of five-year uninsured mortgages from 19 of the largest federally regulated lenders...
—The Mortgage Report: June 25— OSFI Unplugged: Alberta MP Tom Kmiec has obtained internal emails from OSFI that chronicle the regulator’s efforts to improve the mortgage stress test—in particular its efforts to “fix” the minimum qualifying rate (a.k.a., “MQR” or benchmark rate). The emails show that OSFI’s PR staff wanted the public to know it was making “efforts to get...
—The Mortgage Report: June 19 — Long-term Money on Sale: If you’re willing to commit to a decade-long term, and you live in Ontario, you can now do it for less than at any time in history. 10-year fixed rates are now as low as 2.79% (an effective rate including cash back) for well-qualified borrowers in Ontario. Outside of Ontario,...
— The Mortgage Report : June 17 — Prices Slide: The Bank of Canada wants average core inflation at/near 2%, but it’s currently 1.67% and diving. That’s noteworthy for borrowers given inflation expectations are a primary determinant of mortgage rates. Inflation’s descent may slow thanks to rebounding oil prices, but it’ll continue dropping economists say—potentially to lows we haven’t seen...
— The Mortgage Report : June 16 — Tiff on the Hot Seat: In his first news public hearing since being minted as BoC Governor, Tiff Macklem got pelted with questions from MPs. Among his notable statements: “The biggest risk to Canadians not being able to repay their mortgage is not having a job.” “…We’re in a deep hole and...
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