Notable News of the Week: May 18th, 2012

Posted on May 18, 2012 by ratehub

At the end of the work week, Ratehub will summarize the most notable news, to keep you up-to-date with the latest info from the Canadian mortgage and housing industry.

Condo builders unfazed by fears of Toronto condo bubble – The Globe and Mail

Condo construction continues its torrid pace in Toronto as a record 6000+ units sold in the first quarter of 2012. With the rise in the number of development projects comes the risk of a growing number of unsold condo units, which some fear could contribute to a housing burst.

But the chief executive officer of real estate developer Diamondcorp is unfazed. He believes the government should change tax incentives to encourage developers to build more 3-bedroom condos. The result wold be a much needed drop in house prices for single family homes. He says, “If we did that, then I don’t think there’s any bubble in the city of Toronto at all, because we need to accomodate the population.”

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Early Payoff Penalties

Posted on May 16, 2012 by ratehub

The following article is by Robb Nelson from Family Lending, who discusses early mortgage payoff penalties and how they are calculated. You can view Family Lending’s Ontario mortgage rates on RateHub.ca.

The hidden costs of paying down your mortgage

If you’re like most Canadian mortgage holders, chances are you have one goal in mind when it comes to managing your mortgage debt – getting rid of it! According to a 2012 RBC Home Ownership Poll, 14 percent of Canadians have made double-up mortgage payments recently (i.e. their regular payment plus an additional amount equaling as much as one extra payment), while another 13 percent have made a one-time lump sum payment in order to decrease their outstanding mortgage principle.

But what if all your hard work and dedication could end up costing you more money in the long run?

Just when you thought you were done paying the bank for good, they could slap you with a hefty “early payoff penalty,” essentially punishing you for your years of financial diligence. According to the Canadian Bankers Association, early payoff penalties are put in place so that the bank can manage risk and cover costs. However, as per the Financial Consumer Agency of Canada (FCAC), a government body dedicated to educating consumers of their financial rights, banks are far from conservative when assessing this premium penalty. In fact, over the past few years, the Agency has “observed a significant increase in the number of complaints related to mortgage prepayment penalties.”
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Monday Mortgage Update: May 14, 2012

Posted on May 14, 2012 by ratehub

Mark Carney to raise the key interest rate?

Not anytime soon thinks Francis Fong of TD Bank. The economist then referenced a stat by CAAMP, who estimated one in five mortgage holders would be in serious trouble with a key interest rate of 3.00% (the current rate is 1.00%). The key interest rate drives the prime rate which is important to variable rate mortgage holders (the current prime rate is 3.00%). Mr. Fong believes Mark Carney has no intention of raising rates to that level anytime soon. However, TD does anticipate a small rate hike, likely 25 to 50 basis points before the end of the year. Though the central bank will likely tread softly until the Eurozone and US economies regain their momentum. It’s not until the end of 2013 that TD forecasts the Bank of Canada moving the key interest rate to 2.0%.

Toronto Housing Market

According to an article by Troymedia, the measures of supply and demand do not indicate over-supply in the Toronto market. The ratio of completed and unoccupied homes to constructions starts actually suggest the inventory of new unsold condo housing in Toronto is normal and declining relative to the level of construction. The article then goes on to state two factors which suggest condo construction in Toronto will remain high: rental vacancy, which is just over 1 per cent, is trending downwards and Toronto mortgage rates which are widely expected to remain low for at least another year.
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Notable News of the Week: May 11, 2012

Posted on May 11, 2012 by ratehub

At the end of the work week, Ratehub will summarize the most notable news, to keep you up-to-date with the latest info from the Canadian mortgage and housing industry. Canada made international noise this past week as we were rated the 7th hottest real estate market in the world as well as dominating the top ten list for the strongest banks in the world.

Canada Ranks 7^th in World’s 10 Hottest Property Markets – MSNBC.com

According to MSNBC, Canada ranks in the top ten of the World’s Hottest Property Markets. Tied with Norway for 7^th, Canada experienced a five-year price growth in housing of 28.7%. National housing starts exeeded expectations this year largely due to a surge in condo construction. The average Canadian home price is $358,261, according to CREA, however, the International Monetary Fund feels that Canadian homes are overpriced by an average of 10%.
China took the top spot with an incredible five-year price growth of 110.9%, followed by Hong Kong and Israel. Asian cities made up half of the top ten.
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5 Questions you should ask yourself before selling your home

Posted on May 9, 2012 by ratehub

When thinking about selling your home and before going through the joys of hiring a realtor and all that fun stuff, there are 5 questions you should ask yourself. The answers to these questions, and remember to be honest with yourself, will be a great indicator if you’re even ready or willing to sell.

So let’s break it down….

1. Why Am I Selling?

A simple and obvious yet very important question! Are you selling because you NEED to due to a job relocation, changes in your finances or a growing or shrinking family or because you WANT to, to have the home of your dreams with a great location, closer to work and something that will wow your friends and family?

2. Is It The Right Time To Sell?

What are the current market conditions? Is it a buyer’s or seller’s market? You want to receive top dollars for your investment and therefore want to sell in a seller’s market. But this will all depend on your needs vs. wants
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Win an iPad 3 when you register for the new Home Buyers app!

Posted on May 8, 2012 by ratehub

To celebrate the launch of its new iPad app, New Home Buyers Network (NHBN) is offering one lucky user who completes a free app registration the chance to win a brand new iPad 3!

The brand-new Home Buyers app lets homebuyers search over 6,000 new homes and condos in Ontario, view floor plans, calculate mortgage payments, and more.

While there is a wealth of home buying information online, very little of it is tailored to home buyers on the go and mobile search. The Home Buyers app pulls information from NHBN’s well-known website – NewInHomes.com – and presents it in a convenient and easy-to-use format for home buyers using their mobile device.

“Today’s new homebuyers are technically savvy and on the go, or even outside the country,” says Sam Reiss, President and CEO, New Home Buyers Network Inc. “If they’re out and about and see a development they like, they want to find out about it right then and there – so we built an iPad app to let them do that.”
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Monday Mortgage Update: May 7, 2012

Posted on May 7, 2012 by ratehub

Vancouver Housing Market

“Although April sales were below what’s typical for the month, we continue to see…a balanced relationship between buyer demand and seller supply” – Eugen Klein, REBGV President

Vancouver, Canada’s most expensive city to purchase a house saw a major drop in home sales activity this April. According to MLS numbers, total sales dropped 13.2% year-over-year. The number of sales for the Greater Vancouver Region was the lowest monthly total since 2001 and 17% below the 10-year average. Residential home prices have climbed 3.7% (year-over-year) to $683,800.*

Due to the sky-high prices for detached homes, a large majority of Vancouverites seek condo buildings as living options because they represent the most affordable choice for home buyers.

Persistent low mortgage rates in Vancouver have made it possible for home buyers to get cheap mortgage financing.

Collateral Charge Mortgages

Many Canadian mortgage brokers will be discussing collateral charge mortgages and what they mean to the market in an upcoming Mortgage Summit. An important issue lies with lender disclosure. Banks such as TD and ING Direct register all their mortgages as collateral charges which can be problematic since a majority of mortgage consumers aren’t aware of the differences between collateral and traditional mortgages. There is a benefit however, as collateral charge mortgages make borrowing future equity in your home very easy. Although, it hinders a mortgage owner’s ability to secure a second mortgage against their property since the collateral charge is registered as 125% of the value. It also makes changing lenders during renewal very difficult for the home owner. The Mortgage Summit will take place May 31 to June 1 and will be attended by over 300 brokers, lenders and financial planners.

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Notable News of the Week: May 4, 2012

Posted on May 4, 2012 by ratehub

Ratehub not only aggregates mortgage rates in Canada, but mortgage and housing news from across the nation as well. Every Friday we sum up the most interesting headlines to keep you in-the-know.

Scotiabank to use NHL partnership to lure new customers - The Financial Post

Richard Waugh, CEO of Canada’s third largest bank – Scotiabank, is expecting their new marketing partnership with the NHL to bring in one million customers. Scotiabank scored success with their Scene movie campaign that is now used by 3.5 million Canadians. The Big Five are no strangers to leveraging sports sponsorships for marketing and branding. RBC was heavily involved with the Vancouver Winter Olympics and the PGA, while TD has purchased the naming rights to two NBA teams, Boston and formerly Orlando. Scotiabank has placed a lot of resources into their hockey marketing strategy in hopes of scoring a hat trick in customer acquisition – credit cards, debit cards, and mortgages.

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Move your mortgage to the fast lane with accelerated payments

Posted on May 2, 2012 by ratehub

The following article is by Family Lending’s Robb Nelson, who discusses how borrowers can accelerate their mortgage payments and become debt-free faster. You can view Family Lending’s Ontario mortgage rates on RateHub.ca.

Accelerating your mortgage payments is the easiest way to build equity and pay down your debt faster. So what are you waiting for? Today’s low mortgage rates offer the perfect opportunity for Canadian homeowners to speed up their payments and tackle a larger chunk of their mortgage principle – without taxing their current budget.
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Monday Mortgage Update: April 30, 2012

Posted on April 30, 2012 by ratehub

At the beginning of the month, we shed some light on the rise of 5-year Government of Canada (GoC) benchmark bond yields over the last few months. This time, we’ll highlight 3-year GoC benchmark bond yields which have also seen a steady incline since the beginning of the year. Tracking bond yields are important because they help drive fixed mortgage rates; in this case, 3-year GoC bond yields drive 3-year fixed mortgage rates.

From January 6^th to April 30^th, 3-year GoC bond yields have increased 55 basis points (bps). During the first three months of the year, two major Canadian lenders, Scotiabank and National Bank, offered a 3-year fixed rate at 2.79%. That interest rate was among the best mortgage rates in Canada until the end of March. By that time, the 3-yr GoC bond yield was up 31 basis points since the start of January. With that increase, Scotiabank felt the need to remove their big discount and increase the rate to 3.99%. National Bank hung onto the 2.79% rate for a couple more weeks before hiking it to 3.95%. However, a 3-year fixed rate on Ratehub.ca can still be found for 2.89% through a couple of our esteemed mortgage partners.

CMHC news

According to the Financial Post, Jim Flaherty would consider removing the CMHC from the mortgage default business. One of his concerns was that a government financial institution was providing mortgage insurance. He goes on to say, “I think there is a role to regulate but whether we, the Canadian people, have to be the owners and shareholders of a financial institution to do this is a question. I don’t think it’s essential in the long run.”

Last week, we already saw two major announcements: there are no plans to increase CMHC’s $600-billion limit and the CMHC will now fall under the authority of OFSI, Canada’s banking regulator.
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