Expected wave of mortgage renewals contributed to latest rate hold: Bank of Canada
The large number of mortgages coming up for renewal at higher rates is one reason why the Bank of Canada decided to leave its target rate unchanged at 5.00% last month. Bank of Canada Governor Tiff Macklem made the comment Wednesday while testifying before the Standing Senate Committee on Banking, Commerce and the Economy. “One of the important reasons why we held our policy rate at 5% is that we know that those renewals are coming…we know that there’s more to come from what we’ve already done,” Macklem said. “Is there a risk that it bites more than we think? Yes, …
Why education is critical in Canada’s private mortgage space
The recent introduction of new educational and regulatory requirements for Ontario’s private mortgage brokers is a welcome development that should herald more changes in this direction, according to Joe White, president and owner of the Real Estate and Mortgage Institute of Canada. Especially when compared to the relatively scattered regulatory landscape of decades past, “over time, things have gotten much better,” White told CMPTV. “The environment, the regulators, they have done a very good job at protecting consumers.” At the same time, “there’s a lot more that needs to be done, a lot more education,” White stressed. “Is there a …
What does the latest Bank of Canada decision mean for homeowners?
Scores of homeowners across the country will have breathed a sigh of relief with the Bank of Canada’s announcement that it had once again decided to leaveinterest rates unchanged on Wednesday – but borrowing costs remain high with little sign of falling anytime soon. That’s the crux of the “good news, bad news” feel of the central bank’s latest decision, Ratehub.ca CEO James Laird (pictured) told Canadian Mortgage Professional, with the possibility of future rate hikes still looming over the mortgage and housing markets following that announcement. “The good news is they didn’t raise rates. The bad news is the …
Posthaste: 3.4 million Canadians will renew their mortgages by 2025 — and they’re worried
The days of “rock-bottom rates” are over and mortgage borrowers will have to adjust to the new reality. That’s the message from real estate brokerage Royal LePage, which released a poll Oct. 26 showing elevated homeowner anxiety about the coming wave of mortgage renewals. Over the next 18 months, the firm estimates that 3.4 million Canadians will renegotiate their mortgages — almost all at a higher interest rate. The poll, conducted from Sept. 8 to 14, found nearly three quarters of them are worried about the looming transaction. People are contemplating a series of financial changes to manage the anticipated extra drain …
Variable-rate holders have room for optimism on next BoC move: CEO
Canadians with variable-rate mortgages or home equity lines of credit can expect a rate hold from the central bank this week, which would fuel their “cautious optimism” that there will be no further rate hikes this year, according to Ratehub.ca. “It is widely expected that the Bank of Canada will hold rates [this] week due to [the latest] lower-than-expected inflation numbers,” said James Laird, co-CEO of Ratehub.ca. “It is possible that there will be no further rate hikes in 2023.” On the other hand, Canadians who are looking for fixed-rate mortgages should hope harder, “because depending on the bank’s policy …
Canadians continue to struggle with rising housing, mortgage costs
Canadians continue to struggle with rising housing and mortgage costs, with the number of those who exceeded the national housing agency’s recommended limit for housing expenses on the rise. A new survey by ratefilter.ca showed that while the recommended limit set by Canada Mortgage and Housing Corporation (CMHC) on housing expenses was 30%, 62% of Canadians have exceeded this with the average household spending 37% of their pre-tax income on housing costs. Renters spent more money on housing compared to homeowners as they spent an average 43% of their pre-tax income. Homeowners only spent an average of 34%. However, just …
CREA downgrades 2023 home sales forecast
The Canadian Real Estate Association (CREA) had updated its forecast for homes sales and activity and average home prices for 2023 and 2024 through the Multiple Listing Service (MLS) systems of Canadian real estate boards and associations. With new listings not sparking an increase in sales, and interest rates continuing to weigh down the economy, CREA said it expected 449,614 residential properties to change hands by the end of the year, a decline of 9.8% from 2022. That figure was revised downward from its July estimate as a result of lower expected sales in Ontario and British Columbia. Following a …
Industry CEO on finding opportunities in the current environment
With the saturation of high-quality information available to consumers, mortgage professionals need to work harder than ever to find the niches where they will thrive in. For Pineapple CEO Shubha Dasgupta, there will always be opportunities for brokers – if they’re willing to look further than they used to. “I think there is opportunity, but unlike the past few years where opportunity has been at the surface level, opportunity in today’s environment is available, but only for those who are willing to dig beyond the surface,” Dasgupta told Canadian Mortgage Professional. “So we have to look beyond what we traditionally look, …
Canada housing market slowdown likely to last for a prolonged period – analyst
The Bank of Canada’s rate hikes played a major role in the market’s significant deceleration Taking the Canadian economy’s likely trajectory into account, the housing market’s sluggishness will almost certainly persist for the foreseeable future, according to Dawn Desjardins, chief economist at Deloitte Canada. “I think we’re seeing the impact of higher interest rates on the economy, especially during the second quarter,” Desjardins said in an interview with the Financial Post. “We did see a decline in GDP output – a very small decline, but nonetheless, much leaner than what we saw in the first quarter of the year.” Desjardins …
Rental market becoming competitive amid rising interest rates
Economist notes population growth plays key role in housing market The Canadian rental market is becoming increasingly competitive with high interest rates and rising inflation continuing to deter buyers, it has been revealed by Rentals.ca. Increasing demand in the rental market and population growth has fuelled the undersupply of purpose-built rental units, it was suggested in a Canadian Press report. As a result of this mix of factors, renters are growing more frustrated than usual. “It’s definitely been stressful,” said Marissa Giesinger, a 23-year-old Mount Royal University student who, alongside her boyfriend, is looking for an affordable place to …
