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About Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

2013 Mortgages: A Canadian Market Overview [Infographic]

June 10, 2013

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I came across this fantastic infographic and thought I would share it with you (with permission, of course). It looks specifically at the 2013 Canadian housing/mortgage market.

2013 Mortgages: A Canadian Market Overview [Infographic]

Anything of those facts surprise you? Do you know where you fall in some of those stats?

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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Housing Market Calming & Condo Buying Report

June 3, 2013

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Article courtesy of MCAP.

 

Market Calming, Not Crashing: BMO

Bank of Montreal economics published a Special Report last week on the Canadian housing market which seems to provide ample evidence that markets really are in the process of achieving the much sought after “soft landing” after federal policy makers took steps to cool the market last summer. The bank also predicts that the soft landing will likely continue. This analysis is obviously good news for the real estate and mortgage industries in Canada.

There is growing consensus that re-sale transaction volumes have stabilized at levels more in line with historical averages. This means that the drop of about 9% from volumes seen in the first half of 2012 is the new normal level and will likely continue on this pace, after the bite taken by the mortgage rule changes in July of last year. The not-so-good news then is that the pie is clearly smaller and will probably stay smaller for some time.

Housing starts have also adjusted to slowing demand and are now trending at a rate much closer to the rate of household formation – which was and always is inevitable. With a couple of well-known exceptions (like the Toronto condominium market), the bank suggests that, despite the rate of housing starts running well above household formation rates prior to the slowdown, there should be no “material overhang” from the run-up in supply. In certain segments, like the Toronto condo market, excess supply will ultimately bring downward pressure on prices.

Re-sale markets are characterized by the bank as “balanced” and not just in the usual sense of the sales-to-listings ratio being around 50% (which it is) but also with respect to prices and relative ongoing price stability. The Greater Toronto and Vancouver Areas, home to 25% of Canada’s population, may see some “moderate declines” in prices but other regions like Saskatchewan and Alberta should continue to see price appreciation. Overall, prices will be “steadier” this year – and steady prices and valuations are key characteristics of the soft landing seen so far.

 

BMO Condo Buying Report

As part of its Housing Confidence Report, BMO published survey data specific to condominiums last week. The data measures intentions among prospective buyers over the next five years in Canada’s four largest urban markets: Vancouver, Calgary, Toronto and Montreal. Looking first at Vancouver, the intention to buy a condo is down is down 5 points from a year ago to 28% among prospective buyers. The Calgary market reflects the current affordability challenges as condo buying intentions have risen 8 points to 33% while intentions to buy a traditional home have dropped sharply from 71% to 58%. In Toronto, condo buying intentions are up 11 points from last year to 31%. Montreal presents a different scenario where general home buying intentions are up 16 points to 62% but condo buying intentions have fallen by 3points, to 24%.

Demand for condos seems to be growing among baby boomers who might be looking to downsize, decrease home maintenance and increase their sense of security. Condo buying intentions are much higher among those over the age of 50 than they are for those under 50 (30% compared to 17%).

 

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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May 2013 Changes in the Canadian Mortgage Market

May 27, 2013

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Last week, CAAMP released its spring consumer report, Change in the Canadian Mortgage Market. A copy of the full report is available to download here, but for those that don’t feel like reading that whole report, here are some of the significant stats from the report:

  • Overall housing starts are projected to decline from 205,000 in 2011 to 150,000 by 2014. In total, the housing starts downturn will reduce related employment by 80,000 jobs.
  • For mortgages repaid during the past two decades, actual repayment has been two-thirds of the contracted period.
  • 8% of home owners took out equity on their home last year. The average equity takeout was $48,000, with the primary purpose being for renovations/home repairs.
  • 83% of home owners in Canada have at least 25% equity in their home.
  • Overall, 69% of mortgage holders have fixed rate mortgages. For those taken out in the last 12 months, the figure rises to 85%.
  • The average mortgage rate is 3.52%. For those renewed in the past 12 months the average rate is 3.15%.
  • For the past 12 months the actual average rate for a 5-year fixed-rate mortgage has been 2.20% below the posted rate.
  • 60% of Canadians have two or more credit cards, including 30% who have three or more. The average outstanding balance is $3,500.
  • Mortgage credit growth is slowing dramatically. For 2014, it is forecasted to be 2.5% to 3%, or roughly half the current rate.
  • Mortgage brokers continue to account for 25% of all mortgages. For new mortgages in the last 12 months, that total rises to 31%.
  • 18% of mortgage holders, or about 1.1 million, voluntarily increased their mortgage payments, while a further 16%, or about 975,000, made a lump sum payment during the last year.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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More Mortgage Changes Coming?

May 13, 2013

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The OFSI (Office of the Superintendent of Financial Institutions – crazy-long name, eh?) is thinking about continuing to tighten the mortgage rules in this country. Last year the reduced the maximum amortization of insured mortgages from 30 to 25 years (which had previously been reduced from 40 to 35, then from 35 to 30). Now they’re considering lowering amortizations on uninsured (or “conventional”) mortgages (mortgage insurance is mandatory for mortgages with less than 20% down). Canada’s Finance Minster, Jim Flaherty, has been taking steps to curb the growth of consumer debt and inflated housing prices, and he’s using the mortgage-insurance rules as his tool of choice.

But should the OFSI really be intervening when it comes to conventional mortgages in which only the lenders (not the mortgage insurers) are taking the risk? There are many legitimate reasons for conventional mortgages to have extended amortizations (up to 35 years is common) – the oft-used reason being cash flow. With a longer amortization, payments are lower allowing those with more than 20% equity in their homes to spend or invest money elsewhere.

What do you think? Is the OFSI and Finance Minister Jim Flaherty being prudent, or have they already gone to far?  Let me know what you think in the comments below.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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Mortgage Monday Rate Update – May 2013

May 6, 2013

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For those that are shopping for a new house, or looking to do a refinance (or even just a simple mortgage renewal), rates and numbers are an important part of the mortgage equation. When rates change even the slightest of percentage points, it could cost or save you thousands of dollars. Every once in a while, here on the Mortgage Monday posts, I’ll update you on what’s going on in the world of mortgage rates. As has been the case pretty much since we started these Mortgage Monday Rate Updates, there hasn’t been a tonne of movement in the world of mortgage rates.

  • The Bank of Canada interest rate continues to be stuck at 1.00%.  The next meeting is at the end of May, but indications are it will continue to stay where it is for a while yet.
  • The Bank of Canada prime lending rate is also holding steady at 3.00%. It has also been holding steady since Fall 2010 – if the bank rate goes up, the prime lending rate will follow.  We probably won’t see this start to move up well into 2013 or even 2014.
  • The qualifying rate (the rate you would need to qualify at for a variable mortgage) for a 5-year mortgage is still 5.14% (recently down from 5.24%). That being said, there are still not too many folks  getting into a variable mortgage these days with fixed rates continuing to be so low.
  • The current best variable rate (can change on a daily basis) is in the prime-0.40% (2.60%) ballpark, though many lenders are still currently offering ‘prime’ as their variable rate.
  • The current best 5-year fixed mortgage rate (this can change daily) continues to hang out in the 2.79%-2.99% range, depending on qualifications and options.  Again, always contact your mortgage broker for current best rates for your situation (and as we’ve talked about previously, The Best Mortgage Rate is Not Always the Best Option).  Be careful when looking at some of the heavily discounted rates – many of them are considered “no-frills” mortgages and can come with restrictive options which could end up costing you thousands.
  • While the “hot term” in Canada these days may be moving away from the 10-year and back toward the more common 5-year term, the full-featured, 10-year fixed mortgage continues to be popular with rates as low as 3.69% (check out my posts from last year on the 10-Year Mortgage Below 4% and Should You Consider a 10-Year Mortgage?).  Based on the history of lending rates, locking in for 10 years at well-below 4%, or 5 years for less than 3% is nothing short of fantastic.

While I’m happy to provide an update on what’s going on as rates, if you’re interested on getting personalized mortgage advice, speak to your favorite mortgage broker who can help you decide the best rates and options for you.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

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