Related Information to Canada Mortgage

Canada Mortgage

Federal Finance Minister Jim Flaherty announced tighter mortgage rules on Monday Jasnuary 17th, 2011. To address concerns over high Canadian household debt.

Flaherty unveiled three main changes:

"¢The maximum amortization period for a government-insured mortgage was lowered from 35 to 30 years.
"¢The upper limit that Canadians can borrow against their home equity was lowered from 90 per cent to 85 per cent.
"¢Government insurance backing on home equity lines of credit, or HELOCs, has been removed.

What do these changes mean to the consumer? Lowering the maximum amortization will raise monthly mortgage payments by about $120 on a $300K home. This will leave some new home buyers out in the cold if they need the full 35/42 GDS/TDS margins to buy the home of their dreams. Many will have to settle for a cheaper home. What many people have not thought about is those people who have a 40 year amortization will now lose 5 years and have their payments increase when their mortgages come due this year and next year.
What is puzzling is the secpmd rule change. Lowering the refinance limit from 90 to 85% means that people who want to pay off high interest credit card debt with low interest mortgage or lines of credit are limited in how much equity they can use. This means they will have to pay higher interest rates. How this is helping to lower consumer debt in Canada is a mystery to me. One of the banks is offering cash back mortgages to make up for the 5% shortfall but it is at 5.19% which is 1.20% higher than the best discounted rates at this time.
Finally, government insurance backing on HELOCS helps the mortgage companies to securitize their mortgages when they put them in the market for sale to investors. While this lowers the risk exposure for Canadian taxpayers, it will make the risk higher for investors. This will probably result in the investors holding out for higher returns and will force interest rates up.
I think that the government could have spent time looking at high interest rate credit card and consumer loans instead of mortgages as a way to cut individual consumer debt but being Conservative, they are beholding to the banks as Conservative supporters and won't touch their golden egg.
Let's see what Flaherty does next. I'm sure it will be a surprise as well.

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Mortgage Canada

Name: Steve
Country:

Comments: Is it possible for me to know my mortgage worth before I look for the house I want to buy? Let me say it this way, which mortgage company in Canada may be able to look at my papers and say we can finance a house up to $x for you. That way I don't waste a lot of time looking for something no one will help me buy.

Canada Mortgage History & Civil Business Politics

Recently a National Post article brought up an interesting issue. Are parent's fueling the real estate boom in Toronto by giving their children a down payment to purchase a home now rather than let them take time to save it up on their own.
IN a recent blog, Garth Turner, a former MP, said that this is running counter to the government's attempt to cool the real estate market by getting people into the market before they normally would be entering it.
He felt that this was throwing the natural forces of the market off. I'm not so sure about that.
When I got married and started looking at our first home, my parents gave us some money for the down payment. I found out years later that my grandparents did the same thing for my parents when they bought their first home.
If this has been going on for 3 generations in my family, I think it probably is going on in plenty of other Canadian families.
Sometimes people look for a problem when there isn't one.

Mortgage Canada

Mortgage rates in Canada have remained the same since November. A 5 year fixed rate mortgage for someone on approved credit remains at 3.39%. A variable rate mortgage expiring in November 2018 is available for Prime - .50% or 2.50% at this time. It appears that variable rates will remain stable throughout 2014 with the likelihood of going up in 2015.
Fixed rates are based on the bond market so they will likely rise and then fall as the year progresses.

Mortgage Canada

Mortgage rates available from most mortgage brokers are still low. A 5 year fixed rate mortgage is available for 2.99%. A 5 year variable rate would be Prime - .60% or 2.40%.
Qualifying for a mortgage has become more difficult. I suggest dealing with a mortgage broker rather than a bank as they have more options for you./ If you are self employed a broker is a definite advantage.

Canada Mortgage

Bank of Canada Says Home Prices Overvalued as Much as 30%:

Canada's housing prices are overvalued by as much as 30 percent, the central bank said in its latest assessment of a financial risk that's built up over years of rising prices and low interest rates. Ref. Source 8

Canada Mortgage

Mortgage rates went up last week in Canada. A 5 year fixed rate for A clients has gone up from 2.59% to 2.69% with a few no frills mortgages available at 2.64% if they close before December 31.

Canada Mortgage Politics Business Civil & History

Canada facing massive mortgage crisis :

Hit by the sharp decline in oil prices the Canadian economy is struggling with a property market approaching the peak of a massive bubble Ref. Source 5b.