IMPENDING MORTGAGE RULE CHANGES


OSFI (Office of the Superintendent of Financial Institutions) has propose a change to the uninsured stress test rate. OSFI regulates and supervises more than 400 federally regulated financial institutions (80% of all mortgage lenders). They do not watch over provincial credit unions and private lenders. OSFI reports to parliament through the Minister of Finance and regulates the conventional space.


Proposed change - Effective June 1st the qualifying rate for conventional (uninsured) mortgages will be based on a stress test of 5.25%


Note that Department of Finance regulates insured mortgages who currently have a stress test rate of 4.79%


Timeline - On May 7th the public was invited to provide feedback to the change. By May 24th the feedback will be taken into consideration and the final amendments will be made. As of June 1st the changes will take effect.


What does this mean to clients?


• If you have a signed accepted offer dated prior to June 1, 2021,...

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For the past year, soaring home prices and a desire for more space have sent homebuyers flocking beyond the suburbs and into beautiful cottage country.


It’s a trend that is playing out right across the county, and one that’s expected to continue throughout 2021. High demand is expected to push average recreational property prices higher by 15% to $502,730, according to an updated forecast from Royal LePage.


Recreational properties in Ontario and Atlantic Canada are expected to see average prices rise 17%, while Quebec and B.C. should see prices increase by 15% and 13%, respectively. That would be on top of the 16% national price gain seen for this segment between 2019 and 2020.


“From coast to coast, the line between primary residence and recreational property is blurring,” Phil Soper, president and CEO of Royal LePage said in a release. “The trend began last summer when the option of travelling abroad was taken away, and continued to gain popularity as it became...

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Mortgage rates have spent the better part of the past year in near-freefall, with numerous terms setting fresh record lows.


But a couple of weeks ago, rates pulled a U-turn and have been starting to climb higher ever since. And here’s why. Since the beginning of February, 5-year Canada bond yields, which typically lead fixed mortgage rates, have surged. They’ve risen nearly 60 basis points over the past month to a 12-month high.


With funding costs being pushed up and margins being squeezed, lenders could no longer hold rates at those record-low levels.


As for why bond yields are rising—which often coincides with market optimism—the answer is multi-fold.


For one, yields have been soaring south of the border, and when U.S. bond yields move, Canadian yields often follow. Given expectations for rising vaccination rates and ultimately an end to lockdown measures and a return to normalcy, many see greater inflationary pressure ahead, which usually leads to rising interest...

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A COMMON QUESTION – OTHER THAN DOWN PAYMENT, WHAT OTHER COSTS WILL NEED TO BE PAID TO PURCHASE A HOME?


There are a few different areas of costs when it comes to purchasing a home…costs before you complete the agreement to purchase a new home, costs before you move into your home and ownership costs.


Before you have a firm purchase…


Home Inspection Fee – A home inspection is often a condition of the offer, particularly if it is a pre-owned home. The home inspector goes over the house and provides a report on the condition of the home. The cost of this service can vary.


Deposit – The deposit is required when you make an offer on a property. Once the offer is accepted, the deposit is held in trust until the closing of the sale. At this time it gets applied to the down payment. The deposit amount required is determined usually by the value of the property and what your real estate agent thinks is appropriate.


Appraisal Fee – an appraisal estimates the fair...

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