Here are seven things you may not know about Canada’s mortgage market. The source: CMHC’s insightful new Residential Mortgage Industry Report. 1) Variable Rates Looked Good (Keyword Being “Looked”) Almost 3 in 10 borrowers (29%) went variable in the first quarter. That’s12 percentage points higher than two years prior. And that’s despite the historically narrow gap between fixed and variable...
…You’re older, a lone-parent, making a modest income and living in the Prairies. That’s a sampling of insight from this new StatsCan study. Newer lenders could find this report interesting, given they always want to know who’s most likely to miss a mortgage payment. StatsCan’sresearchalso downplays the highly publicized “debt-to-income ratio,” which makes news headlines every quarter. The agency writes...
Think you’re going to be materiallybetter off in the next two years? Odds are, you’ll get a bigger mortgage than someone who doesn’t. That’s StatsCan’s finding in this just-releasedstudy. “Families with positive expectations about their financial situation…held about $27,900more in mortgage debt than other comparable families during the period from1999to2016,” StatsCan said. That’s like a 38% bigger mortgage. The more...
Most consumers are underinformed about HELOCs. 27% of HELOC holders are only making interest-only payments most/all of the time. Too many HELOC holders may be using them to overspend. Those were key findings from today’sFinancial Consumer Agency of Canada (FCAC) report on HELOCs. HELOCs have been the single-biggest contributor to rising non-mortgage household debt over the past 15 years—”more than...
RBC released its quarterly housing affordability report last week. Once again, it overstated mortgage un-affordability relative to prior decades (aspreviously noted). But it did have some points worth pondering. Among them: “Mortgage rates increasedfor a fifth straight quarter and accounted for the entire” drop in [RBC’s] affordability measure, the bank said. With rate-hike expectations dropping like a stone, our sense...
Canada’s debt situation appears to be getting better…if you just look at mortgages. But something sinister lurks beneath the surface. And it’s made of plastic. Indebtedness has been outgrowing incomes in this country, despite stringent new mortgage restrictions.Canadians now owe $1.78 in credit market debt for every dollar of household disposable income, just under the record high. And we keep...
Stricter mortgage rules are working, suggests the Bank of Canada in this report today. Now if only we could take that report at face value. New Stats on Mortgagor Debt Loads If the government wanted to slow the market, it did. As of the second quarter, the number of new low-ratio mortgages fell 15% year-over-year after the feds implemented the...
HELOCs have been getting a bad rap ever since the FCAC proclaimedin 2017 that “home equity lines of credit may put consumers at risk.” Bank of Canada Governor Stephen Poloz then followed soon after by including HELOCs in a speech about what keeps him up at night. Policy-makers’ concern is that HELOC rates are rising and people are using them...
“RBC’s affordability measure hasn’t been this bad since 1990.”—RBC Economics That’s according to RBC’s “Housing Trends and Affordability” report, which is making headlines across the country as we speak. But if you’re house hunting and terrified you won’t get a mortgage, don’t soil your trousers just yet. There’s a devil in RBC’s details. It’s the mortgage rates they assume in...
“Last year marked the beginning of a new era for Canadian households,”said CIBC Economics on Thursday. “For the first time since the early 1990s, interest rates on five-year Government of Canada bonds were higher than they were five years before.” The bank adds, “With that trend set to continue, we estimate that 70% of households with five-year fixed rate mortgages...
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