Monthly Archives: July 2011

The Average Home in Saskatchewan

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With talk of the Euro (€) breaking up on the verge of the financial collapse of Greece, we should consider ourselves lucky in Canada. Our housing market has a healthy pulse. The average Canadian home price is about $365,000 which is up almost 9% from last year1.

As we continue our series detailing the “average home” in each province, our sights have set on Saskatchewan. The last time we talked about this province we made fun of it -this time will be no different. The average home price in the prairie province is $251,000 and a stalk of corn.

Using our Saskatchewan mortgage calculator, we’ll determine what the affordability of a home in Saskatchewan will look like using the ‘average home price’ as the reference amount. The best 5-year fixed rate was 3.49% when we compared Saskatchewan mortgage rates*. We chose a 25-year amortization period and assumed a 20% down payment.

$1,002 is the monthly mortgage payment.

The Saskatchewan Land Transfer Tax is one of the smallest title transfer fees in Canada. The amount due is only $753 on the $250,000 property.

What kind of home can you get in…

The Most Affordable City in Saskatchewan: Swift Current2

The Average Home in Saskatchewan

MLS®: 401318, 4 bedrooms, 2 bathrooms

This sleepy town has a population of 15,000 and the mean household income is $40,711, so purchasing a $251,000 home should get you enough property to store your wheat. This home is described as having an open view to the east. The same can be said for the entire province.

The Most Expensive City in Saskatchewan: Saskatoon2

The Average Home in Saskatchewan

MLS®: 382780, 2 bedrooms, 1 bathroom

For the same price, you can purchase this condo in downtown Saskatoon. It features maple cabinets, granite countertops and dark laminate flooring. This condo offers spectacular views of Saskatchewan – all of it.

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The Average Home in Manitoba

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Canadian home sales have been breaking records lately and house prices continue to rise. Although it hasn’t quite reached Australian levels yet, it still represents a very healthy market. As reported by CREA (The Canadian Real Estate Association), the Canadian average house price is $365,000, which marks an 8.8% jump from 12 months ago.

The average home price in Manitoba is $222,000, which is well below the national average. At these prices, we’re thinking you might be able to find a decent sized property, even in the province’s most expensive city.

We’ll take a look at the type of housing you can obtain using the provincial average ($222,000) as the reference amount. For our scenarios, we opted for a 5-year fixed rate selected from the best Manitoba mortgage rates, at 3.49%. We’ll assume a conventional mortgage (20% down payment) and that amortization period is over 25 years.

The monthly works out to a very palatable $886, whereas the Manitoba Land Transfer Tax comes to $2,090.

What kind of home you can get in…

Manitoba’s Most Affordable City: Portage la Prairie 2

The Average Home in Manitoba

MLS®: 1101949, 4 bedrooms, 2 bathrooms

This bungalow is actually much larger than it appears; the property is over 2,000 square feet. This home features vaulted ceilings in the living/dining room, a large kitchen with lots of cabinet space, and a four-piece main bathroom.

Manitoba’s Most Expensive City: Winnipeg 2

The Average Home in Manitoba

MLS®: 1110797, 2 bedrooms, 2 bathrooms

This charming home was built before the Great Depression. It’s a cozy 900 square feet featuring maple cabinets and stainless steel appliances in the kitchen. The property has seen $20,000 in renovations over the last three years.

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Mortgage and Divorce

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Mortgage and Divorce

Two of the most legally binding documents that you will sign in your life are your marriage certificate and your home property agreement. Unfortunately, when you want out of the former, the latter tends to follow suit.

The sad reality of the fact is that there are over 70,000 divorces in Canada every year [1]. A 2010 report stated that 4 in 10 first marriages end in divorce [2]. Whether or not you like statistics, it’s difficult to hide from the fact that it’s a possibility – even with the best of marriages. So here are a few mortgage options and pointers to keep in mind when it comes to crunch time.

If you are legally married, then you continue to be so until the court recognizes otherwise. So, without another legal document stating that you are separated or divorced, you are still technically married and this means that you need your spouse’s permission if you wish to buy another property or sell the current one. Welcome to family and property law.

A divorce is an emotionally trying time for everyone involved. The paperwork behind it can be just as frustrating. Keeping track of your finances is essential during a time like this. Remember that you can seek help if necessary.

A qualified mortgage professional can help you get your financing in order. There are numerous questions that need to be resolved. Is the property being sold? Will one party be able to refinance the house to buy out the other person? To avoid dragging out a long and messy divorce, ensure that you get your home financing resolved as soon as possible. Disputes over the home are one of the main causes for the delays in finalizing a divorce.

There are some options to consider:

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Mortgage insurance for first-time home buyers

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Simon Rusinek is a leading independent financial and insurance advisor with the Wealth Investment Executives group and has over 14 years of experience in the finance and banking sectors. Below he outlines the insurance options for first-time home buyers and offers his recommendation on an innovative new ‘all-in-one’ combined coverage product.

mortgage insuranceTypically mortgage owners are underinsured and not insured in the appropriate manor. The majority of them have lender mortgage insurance, which is an inferior product. The lender insurance is owned by the lender and not by the client. The client, therefore, does not have a proper contract and a proper transfer of risk onto the insurance company.  Most lenders also engage in post claims underwriting.   That means they approve everyone and, at the time of claim, they will then determine if you are eligible.   All they have approved you for up front is the right to pay them premiums. Another key downside is that lenders do not have to renew your insurance when your mortgage renews, and that may leave mortgage owners without insurance in a time of need.

There is smarter option available to home buyers, one that combines Life, Disability and Critical Illness into one policy. This product can be acquired at the time you purchase your home, when you are taking on a substantial financial liability, which will cover your mortgage and beyond up to your maximum coverage level. This product is very cost effective and savings are approximately 33% less expensive than acquiring them individually. Did you know that less than 60% of Canadians have an individual insurance policy, 13% have a critical Illness policy and only 21% have an individual disability plan? Ultimately, less than 8% have all three products. With the combined product, the insurance company does the underwriting up front, gives clients a guaranteed contract, insures for all three and makes it cost effective.

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The Average Home in Quebec

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The housing market in the United States is on life-support. There were 4.77 million U.S. home sales this past June which represents an 8.8% decrease from where they were a year ago1. Conversely, Canada has seen home sales increase by that exact amount (8.8%) over the same time period.  The difference in the average home price between the two countries is about $200,0002. The Canadian average is about $365,000, according to CREA (The Canadian Real Estate Association)3.

The province of Quebec saw a 5.0% increase in their average home price over the past 12 months where it currently sits at $252,000. Using this amount as a benchmark, we’ll determine the affordability with today’s current mortgage rates.

Looking at Quebec mortgage rates, we selected a 5-year fixed mortgage rate at 3.54% over a 25 year amortization period*. We also assumed a 20% down payment to avoid the cost of CMHC insurance.

The mortgage payments are $1,011 a month and the Quebec Land Transfer Tax is $2,280.

What kind of home can you get in…

Quebec’s Most Affordable City: La Tuque 4

MLS® 8554025, 6 bedrooms, 2 bathrooms

The Average Home in QuebecThe Average Home in QuebecThe Average Home in Quebec

You know you’re in the middle of nowhere when the local economy centres on pulp and paper. This home in the small town of La Tuque, Quebec, offers hardwood and ceramic tile flooring, a fully finished basement and a large deck. Oh, and lots of trees in the neighbourhood.

Quebec’s Most Expensive City: Montreal 4

MLS® 8514506, 2 bedrooms, 1 bathroom

The Average Home in QuebecThe Average Home in QuebecThe Average Home in Quebec

Montreal is one of the most vibrant cities in Canada and for the average provincial home price – you’ll be able to get this stunning modern loft. There’s exposed concrete and wood beams throughout. And although the unit has no balcony, there is a common rooftop terrace. Oh la la.

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Mortgage Monday Update: July 25, 2011

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Last week, the Bank of Canada made the announcement that it was keeping the key interest rate unchanged at 1.00%. As predicted in last week’s mortgage update, the global economy made it too risky for Canada to increase the overnight lending rate, despite being in the position to do so financially.

On Wednesday, the BoC’s Monetary Policy Report mentioned several strong factors acting against our economy: the increased strength of the Canadian dollar; growing sovereign default risks in Europe and a deceleration in consumer spending in Canada.

The market reacted as Mr.Carney must have expected and the report served as a reminder to the public not to be complacent about low borrowing rates while not inciting any risk to the economy’s recovery [1].

On Friday, Statistics Canada released its CPI which plummeted from 3.7% to 3.1%. Additionally, core inflation dropped from 1.8% to 1.3%. The BoC generally likes this figure around 2% [2].

The CPI (Consumer Price Index) is a good indicator of inflation at the consumer level. So, the slowdown in Canadian consumer spending indirectly affects mortgage rates. Inflation can be kept in check by controlling consumer spending – which is achieved by increasing interest rates. However, if Canadians aren’t spending as much and inflation decreases, interest and mortgage rates are decreased to promote spending and avoid recession-like circumstances.

Fixed and variable mortgage rates have remained steady over the last week although Government of Canada bond yields continued their backstage game of fluctuating. Five-year bonds surged early in the week, only to be turned around by Friday’s CPI numbers. So although the week finished 6.5 basis points up, it seems that fixed rates are still pointing down. The CPI and inflation numbers indicate that the predicted short-term rate hikes are unlikely [1].

So if you’re a buyer looking for a fixed rate mortgage, the ball is in your court, at least for the moment.

There’s some interesting news for buyers looking for a variable mortgage as well. The qualifying rate has now changed and it is possible to use the 3-year posted rate (as low as 3.55%) as opposed to the 5-year rate (5.54%) to qualify [1].

The Qualifying Rate is the benchmark that variable mortgage borrowers need to meet to qualify. This accounts for the risk that is incurred by choosing a fluctuating mortgage rate.

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The Average Home in British Columbia

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The Canadian housing market is very healthy and is outperforming some notable international housing markets. Currently, the average Canadian home price is $365,000, according to CREA (The Canadian Real Estate Association) – an 8.8% improvement from last year.

The average home price in BC is an incredible $588,000 – which single-handedly drives the national average upward. The first eight most expensive cities in Canada all reside in BC1. And they are in order: Vancouver, Richmond, Kelowna, Burnaby, North Vancouver, Victoria, Coquitlam, and New West Minster. Foreign investors, mostly from China, have been keeping the housing market hot in BC.

Let’s take a look at what a monthly mortgage would look like using the ‘average house price’ in BC.

We selected a 5-year fixed rate at 3.59% from the best mortgage rates in BC, using a 20% down payment to avoid CMHC insurance, over a 25-year amortization period.

The monthly payments amount to $2,371.

The Land Transfer Tax in BC, which is considered part of the closing costs, will cost you $9,760.

What kind of home can you get in…

B.C.’s Most Affordable City: Quesnel2

The Average Home in British Columbia

MLS®: N203050, 4 bedrooms, 3 bathrooms

British Columbia`s most affordable city isn`t exactly “affordable” when compared to other provincial cities of the same standing, but it is astonishing the kind of property you can still get. This home sits on 2 acres of land backing out onto a lake. It features a pool, walkout basement, and oak flooring.

B.C.’s most expensive city: Vancouver2

The Average Home in British Columbia

MLS®: V879044, 1 bedroom, 1 bathroom

As Canada’s most expensive city , it’s no surprise that for the provincial average, the most you can muster up is a 750 square foot, one bedroom condo. This property is located right on the harbour in downtown Vancouver boasting such features as granite countertops, radiant in-floor heating, and a gas fireplace.

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First-Time Home Buyer Profile: Live-in Landlord

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First-Time Home Buyer ProfileThis week, a friend of RateHub, who will remain nameless, shares his unique first-time home buying experience with us. We are keeping his identity hush-hush due to the high value nature of his property and the fact he shares this property with other tenants.

Our home buyer purchased a single family home in Toronto’s Annex neighbourhood with the intention to convert the dwelling in to three units: one unit to be occupied by him and the other two by renters.

If you are looking to rent a room in a house or to be a live-in or first-time landlord, read on to get some amazing pointers from someone who’s recently gone through the motions.

Meet our home buyer

Age: Early 30s

Occupation: Self-employed

Marital status: Single

Kids: No

Home value: Paid $900,000 but worth $1.2-$1.3M after renovations and appreciation

Mortgage value: $855,000

The home buying process                                                                      

What made you decide to enter the housing market? What were you looking for?

I had a somewhat unique requirement in that I was looking not only for a place that would hold multiple units, but something I could convert myself. I enjoy working with my hands and the renovation aspect. So, I was seeking an investment property with a time investment too.

Did you have a checklist? Did you distinguish between needs and wants? Any ‘odd’ requirements?

I looked for something that would be easily divisible into units. In the basement there was already a ‘granny suite’, so I did most of the converting on the main floor and upper unit.

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Manitoba Land Transfer Tax

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Manitoba is one of the eight provinces in Canada that charges land transfer taxes on land being sold. When you purchase a property, not only do you need to compare Manitoba mortgages rates, you also need to keep in mind closing costs. Land transfer tax falls under the category of closing costs, and can add up to a significant amount.

So, Manitoba land transfer tax is determined by the market value of the property, on the date of registration of a title transfer. It can be calculated according to the following table:

Property value Marginal Tax rate
First $30,000 No tax
On $30,001 – $90,000 0.5%
On $90,001 – $150,000 1.0%
On $150,001 – $200,000 1.5%
On over $200,001 2.0%

Source: Government of Manitoba, “Land Transfer Tax”

Let’s say that you purchase a home valued at $300,000. Using the table above, a rough calculation may look as follows:

0.5% x ($30,000) = $150

1.0% x ($60,000) = $600

1.5% x ($50,000) = $ 750

2.0% x ($100,000) = $2,000

The total land transfer tax is approximately $3500. You can use our Manitoba land transfer tax calculator to estimate your tax. It’s quick and easy. Our calculator more accurately lists the land transfer tax at $3,650.

Get in touch with a Manitoba mortgage broker who can connect you to a good mortgage rate in your province.

The Average Home in Ontario

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The Canadian housing market has been quite fortunate as of late, unlike our friendly neighbours to the south who are dealing with the repercussions of the worst housing crash in their history. Here in Canada, the average price of a home is $365,000, which is up 8.8% from a year ago1, indicating a very healthy housing market.

According to a 2011 report by CREA (Canadian Real Estate Association), the average house price in Ontario is $360,000. We’ll breakdown what a monthly mortgage would look like using current mortgage interest rates and the type of home you can get using the average ‘Ontario house price’ of $360,000.

For our scenarios, we selected from the lowest mortgage rates in Ontario and opted for a 5-year fixed mortgage at 3.51%*, over a 25-year amortization period with a 20% down payment.

The monthly payments work out to $1,483, with $5,200 going towards Ontario Land Transfer Tax

What kind of home can you get in…

Ontario’s Most Affordable City: Timmins 2

The Average Home in Ontario

MLS®: 111513, 3 bedrooms, 2 bathrooms

This bungalow is 1550 square feet featuring cherry hardwood floors, a backyard deck, and heated flooring in the master bath. Perfect for a small family.

Ontario’s Most Expensive City: Toronto 2

The Average Home in Ontario

MLS®: C2114815, 1 bedroom, 1 bathroom

This condo is 616 square feet and can be found on the 52nd floor with views of Lake Ontario. It is located in central downtown Toronto, only steps from the CN Tower. Perfect for a small person.

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