The Bank of Canada (BoC) has been telling us that it needs to increase rates. The frequency and amplification of their message has been steadily rising. As their message becomes louder, the market begins to make its own noise.
The Bank of Canada (BoC) has been telling us that it needs to increase rates. The frequency and amplification of their message has been steadily rising. As their message becomes louder, the market begins to make its own noise.
(I will be using Trump book titles throughout this newsletter.)
The USA has negotiated a new trade agreement with Canada and Mexico. It’s called the USMCA and for starters here are 5 points that we can take away from this agreement as Canadians.
The Bank of Canada (BoC) is probably going to increase the overnight rate by 0.25% on Wednesday. This will mean Variable Rate Mortgages will get a little bit more expensive.
Actions taken by the Canadian Banks and the Canadian Government will make renewing your mortgage more costly than ever before. Homeowners looking to access the equity in their homes will discover that new underwriting guidelines now limit their ability to borrow regardless of how much equity they have in their homes.
Today’s newsletter will focus on four factors that will make shopping at mortgage renewal time harder than before and what we can do to help.
Consumer watchdog is suggesting there are serious problems with the way Canadian Banks are misleading their clients. At MorCan Direct, our watchdog continues to be pleased with our 5 star customer rating with over 100 reviews. The MorCan Direct watchdog is however still terrified of cats.
Canada’s unemployment rate has fallen to its lowest level in over 40 years. In December 78,600 jobs were created. As a result every Canadian Bank is predicting the Bank of Canada will increase the overnight lending rate by 0.25% on January 17th, 2018. This means we will likely be starting the year off with an increase in our Variable Rate Mortgage payments.
Friday December 29th, 2017 is the last day Canadians will be able to qualify for a mortgage at their contract rate. As of January 1st, 2018 all mortgagors will need to qualify at the Bank of Canada’s prescribed 5 year rate, or 2% higher than their contract rate, whichever is greater. This means about 20% less money available to qualified borrowers across the board.
Canada’s new mortgage rules are designed to make it harder for you to qualify for the mortgage you have right now and they are being introduced on January 1st, 2018. The new rules will affect at least 15% of Canadians. Whether you are looking to borrow more money against your home or simply want to move to a different lender for a better rate, you will be affected. Canadians will be forced to borrow less money as the income required to qualify for a mortgage will increase by about 20%. The Government of Canada is making it harder to shop for a better mortgage and more difficult to access the equity in your home, we believe that this will result in higher mortgages rates for some consumers.
In the 15 years that I have been brokering mortgages it has never been harder or more expensive to get mortgage financing for consumers who are even slightly on the fringe of being classified an “A” Borrower. Who falls into this category? As long as it isn’t you or I, who cares, right? But wait, it is me, and it might be you too!
Newton’s third law states that for every action there is an equal and opposite reaction. Newton can probably help us figure out how many more interest rates hikes we have in store for us. His law may also be useful in countering the claim the interest rates will continue to increase in the next two years without pause.