The Changing Legal Landscape for Landlords and Investment Property Owners

toronto-condo-for-rent

This is a guest post from Condos.ca, a Toronto condo database and brokerage.

If you’re one of the many Canadians who own and rent out investment properties, you’ve already navigated through the more complex process of taking out an investment property mortgage with a lender. But what about the legal specifics of renting it out? If you’ve recently purchased a home or condo as an investment property, there are a long list of rental regulations to get up to speed on.

What you can and can’t do as a landlord varies from province-to-province. In British Columbia or Alberta, for example, a landlord may request that a tenant provide post-dated cheques for future rental payments; in Quebec, however, this isn’t allowed. Other common issues include whether or not a tenant can sublet the property, whether a landlord can request a security deposit, and how much notice a tenant must be given in instances of developments such as rent increases or evictions.

One thing to note is that landlord-tenant laws can change over time. Continue reading

The Pros and Cons of Reverse Mortgages in Canada

reverse-mortgage-home

There’s been a lot of talk about reverse mortgages in the media lately. With a new survey showing that 50% of Canadians aged 50+ worry they’ll run out of savings within the first 10 years of retirement, it’s understandable why reverse mortgages are being presented as a viable option to supplement their income. Unfortunately, they come with a longer list of cons than pros – and there are some alternatives to consider. Here’s everything you need to know about reverse mortgages in Canada.

What is a reverse mortgage?

A reverse mortgage is a mortgage product that allows senior homeowners (55+) to borrow up to 50% of the value of their home. A reverse mortgage is secured by the equity in your home and, unlike a home equity line of credit (HELOC), it does not require any income proof verification. If you take out a reverse mortgage, you can use the money to pay for anything you want (home repairs, bills, travel, etc.), and you don’t have to pay back the loan or interest until you sell your home or pass away.  Continue reading

How Much Will it Cost to Break My Mortgage with TD Bank?

TD Mortgage Rates

We’ve reached the end of our blog post series on mortgage penalties. If you haven’t been able to relate to any of the ones we’ve posted so far, that may be because your mortgage is held with the last of the big banks: Toronto-Dominion (TD).

If you find yourself in a situation where you have to break your mortgage term early – either to refinance your mortgage, transfer it to another lender or sell your home – you’ll likely have to pay a penalty fee (otherwise known as a prepayment charge). While the bank’s all host their own penalty calculators on their websites, they’re often convoluted and don’t explain exactly how they determine the amount you will owe them.

To help you understand how your prepayment charge is calculated, we decided to create a mortgage penalty calculator of our own. To do so, we called all the banks to find out exactly how their calculations work, and built a list of other fees you may have to pay during the process. So, if you’re a TD mortgage customer who is in this situation, here’s how your penalty will be calculated. Continue reading

Bank of Canada Interest Rate Announcement: July 16, 2014

Interest Rate Annoucement

This morning, Bank of Canada (BoC) Governor, Stephen Poloz, announced its overnight lending rate would remain at 1.00% for yet another six weeks. While this announcement does not come as a surprise, it does allow variable rate mortgage holders whose mortgage rates are attached to Prime rate to breath a sigh of relief – at least, for now.

In the past two weeks, two different agencies – Fitch Ratings and Morningstar – announced concerns that the Canadian housing market is overvalued by as much as 20-30% respectively. Fitch believes Canada’s household debt levels make “the market more susceptible to market stresses like unemployment or interest rate increases” and fears a 20% correction is in our future. Morningstar thinks that number will be closer to 30%, and notes that interest rates have fallen for the past 30 years, which has been the biggest driver in housing affordability across the country. Continue reading

How Your Down Payment Really Affects Your CMHC Insurance

canadian-savings-down-payment

Flickr: dolmansaxlil

On May 1st of this year, the Canada Mortgage and Housing Corporation (CMHC) increased their mortgage default insurance premiums. Mortgage default insurance, which is more commonly known as CMHC insurance, is required of buyers who make a down payment of between 5-19.99% when they purchase a home. The new premiums went up by approximately 15% on average for all down payment scenarios, as follows:

cmhc-rates-may-1-new

Unfortunately, this information doesn’t do much in terms of educating future homebuyers. The biggest question we hear from readers, friends, and even real estate agents is that buyers want to understand how their down payment really affects their CMHC insurance – and the monthly payments and interest costs that follow. To answer that question, we plugged the current national average home price ($416,584) into our mortgage payment calculator. Here’s what we can tell you: Continue reading