Never before has Canada’s banking regulator received so much pushback on a mortgage rule. OSFI has felt such heat from its controversial “B-20” stress test, that it’s started a campaign to defend its position—e.g., this speech last Tuesday (video) and this one last Thursday. From that and from what we know of regulators’ non-public comments, one thing appears clear. The government has...

And that’s as the government intended. Albeit, the deceleration may be less pronounced than some might expect, given all the recent headlines about this year’s real estate slowdown and mortgage rule tightening. Here are fresh new mortgage stats from CMHC and Equifax (as of second quarter of 2018): Number of active mortgages: 5.98 million This number essentially stayed the same...

Something unusual has happened in the high-ratio mortgage world. Homebuyers with less than 20% equity are gravitating to floating-rates — more than ever in recent history. New data from the country’s top default insurer (CMHC) shows that almost a third of transactionally insured borrowers (31.3%) chose a variable- or adjustable-rate mortgage from July 1 to September 30. Jargon-Buster: “Transactionally insured” just...

Many don’t realize that there are two flavours of floating-rate mortgages: The adjustable-rate mortgage (ARM) Its payment rises and falls with prime rate The variable-rate mortgage (VRM) Its payment doesn’t change when prime rate changes The only exception is when rates soar so much that you’re not paying all the interest. Then the payment generally rises to cover the interest...

When you go online, you leave a trail of digital bread crumbs. And if new research catches on, mortgage lenders could someday use those crumbs against you (or for you). The U.S. National Bureau of Economic Research (NBER) has published a study showing that creditworthiness is linked to a borrower’s “digital footprint.” NBER studied nine digital footprint variables: the borrower’s...

There’s still way too much inefficiency in the mortgage research process. That is, if we’re to believe the latest CMHC data. Three out of four homebuyers used websites to gather mortgage-related information, says Canada’s housing agency. But, among those, only 20% of first-time buyers, 24% of repeat buyers and 23% of renewers used “interest rate comparison” websites. It’s bad enough...

Oh the lengths people will go to squeeze themselves into a new property. That includes putting their home, or at least part of it, on their credit card. Yep, believe it or not, some lenders are more than happy to let you borrow your down payment off a credit card. And government-backed default insurers support it. That’s despite Ottawa outlawing...

Two-thirds of consumers expect interest rates to rise in the next 12 months, according to a new report from Mortgage Professionals Canada. Only a measly 2% expect rates to fall. But that’s not as surprising as it seems. There is a built-in bias towards higher rates and there has been for years. “Through the entire history of this question, Canadians...

Rising rates and new mortgage regulations aren’t enough to scare nearly 1 in 4 Canadians. That’s how many plan to buy a home within the next year. This comes from a new BMO survey, which also found the national average price buyers expect to pay is about $474,000. That jumps to $580,000 in Toronto and $603,000 for Vancouver buyers. Most concerning...

If Jimmy Fallon’s “puppy predictors” ever start forecasting interest rates, some economists could be out of work. These four-legged furballs may very well have just as much forecasting ability as your typical Bay Street analyst. To “prove” it, we use 20/20 hindsight to our advantage (and economists’ disadvantage). Taking a trip back to 2015 shows just how reliable economic forecasts...