Categories for Rate Regulation

Will Mortgage Deferrals be Extended?

—The Mortgage Report: July 8— Avoiding the Cliff: If six-month payment deferrals end as planned in September, tens of thousands of homeowners will default on their mortgages—no question about it. CMHC calls this the looming “deferral cliff,” and analysts want to know what the government will do about it. If Australia is any guide, deferrals could very well be extended....

Industry Leader Calls for Stress Test Fixes Now

—The Mortgage Report: June 29— Stress Test Fix Overdue: Ottawa was sensible to pause the mortgage stress test changes “given the marketplace uncertainty in March,” says Paul Taylor, President and CEO, Mortgage Professionals Canada (MPC). “However, as we begin to open businesses again, and as economists are generally expecting a housing price downturn, now is the time for OSFI and...

Internal Emails From OSFI Document its Stress Test Tweaks

—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 8

A Recovery for the Ages: Against all odds, and despite the biggest unemployment surge in a 3-month span ever, stocks have erased 2020 losses. ICYMI: Private default insurer Genworth Canada saw no need to follow CMHC and tighten its mortgage rules. Canada Guaranty, which has the lowest loss ratio in the mortgage insurance industry, made the same determination, saying, “Given...

Genworth Doesn’t Follow CMHC Changes

The Mortgage Report – June 8 2:35 p.m. Update CMHC on Its Own: If you’re buying with less than 20% down and can’t qualify under CMHC’s stricter insured mortgage rules, you still have options. Effective July 1, CMHC is lowering the maximum debt you can carry, raising its minimum credit score to 680 and banning certain borrowed down payments. But...

BREAKING: CMHC Mortgage Rules Get Tighter, Impacting First-time Buyers

Normally, you don’t rock the boat when you’re already taking on water, but that’s what CMHC has done. Despite a weakened housing market, the nation’s largest default insurer is making it tougher for people to get a mortgage. That is, for borrowers with higher debt loads, lower credit scores and borrowed down payments. Here’s CMHC’s official announcement. Its changes take...

OSFI’s Mortgage Update Raises Questions

Don’t worry about the nagging side effects from the federal mortgage stress test. You might have heard about them in the media, but based on recent stats shared by the banking regulator, they’re overblown. Nothing to see here… Well, actually, there is more to see. OSFI’s latest assertions raise just as many questions as answers. Here were six points from its January...

The Mortgage Stress Test May Get More Reasonable

Here’s some good news for people who’ve been blocked from qualifying for a mortgage due to the government’s “stress test.” Canada’s banking regulator (OSFI) is taking a second look at the mortgage stress test calculation, which requires borrowers who are not default insured to prove they can afford a monthly payment at the greater of: (A)  Their actual mortgage rate...

We May Again See Mortgage Insurance for Properties Over $1 Million

In 2012, Canadians lost the ability to buy $1 million+ homes with less than 20% down. The Finance Department put the kibosh on it, in its hotly debated quest to “reduce taxpayer risk.” But now, there’s hope that well-qualified borrowers will once again be able to buy a 7-figure shack with just 10% down. Genworth Canada, the nation’s biggest private...

10-Year Rates Can’t Close the Gap

The difference between a lender’s cost to lend for 10 years versus five years is near an all-time low. Yet, 10-year rates remain too high to attract much interest. This chart below is one example of how competitive basic 10-year funding costs have become. It shows a long-term view of Canada Mortgage Bond (CMB) yields. Lenders use CMBs to fund insured 5-...