3 Dec

Minimum Downpayment Could Rise Under Liberal Plan


Posted by: Cory Kline

The Liberal government could be about to impose tougher restrictions on homebuyers by raising the minimum downpayment for a government-insured mortgage. Mortgage expert Robert McLister says that there could be a sliding scale of downpayment requirements depending on the price of the home. The Huffington Post reports that it could mean a 10 per cent minimum for those buying a home of $700,000 or more; which would particularly hit those in Toronto and Vancouver where average prices are already above that level. Those buying a home above $501,000 would have to find 7 per cent as a minimum. The Finance Department told HuffPost Canada that it does not comment on unconfirmed policy options but that it regularly reviews policies in consideration of the housing market and wider economy.


Thank you Mortgage Broker News.ca for your insight. ‘Minimum downpayment could rise under Liberal plan’ by Steve Randall | 03 Dec 2015


3 Dec

No Surprises Here!


Posted by: Cory Kline

The Bank of Canada kept the key overnight interest rate unchanged at 0.5 percent as expected, as the Federal Reserve is poised to hike rates for the first time in nearly 10 years. The Bank’s decision did not, however, reflect complacency with the state of the Canadian economy, but rather a hand-off to the much ballyhooed fiscal stimulus in the coming year by the new Liberal government. With interest rates so close to the zero lower bound, it’s a good thing that firepower will be coming from another source. This is no time for misplaced fiscal austerity. If anything, the risk is that the government won’t do enough to reboot economic activity, paranoid about looming deficits and the erroneous assumption that tax hikes for the rich will somehow help the economy or address income inequality.

The Canadian economy, though improved from the first-half rout, is on very shaky ground. The third quarter GDP figures released this week showed a rebound to a 2.3 percent annual growth pace, largely the result of an improvement in exports–not surprising given the robust demand for autos in the U.S. and the weakness in the Canadian dollar. But the September data for GDP by industry was very troubling as real gross domestic product fell 0.5 percent following three consecutive monthly increases, primarily as a result of declines in mining, quarrying and oil and gas extraction and, to a lesser extent, manufacturing weakness. 

Another pocket of vulnerability in the recent data was in the finance and insurance sector, which has declined for two consecutive months. This is particularly troubling as the major Canadian banks have announced expected layoffs in their Canadian operations for this year and next. With interest rate-spread compression and a weak economy, all the banks are in cost-cutting mode in this country. Mortgage rates have clearly bottomed despite the Bank of Canada’s inaction.

Oil and other commodity prices have continued to fall, to the surprise of the Bank of Canada. This marked further deterioration in Canada’s terms of trade is depressing net exports and the damage done to our labour markets and cancelled investment projects–not to mention the Canadian stock market–is far from over. The negative backdrop in Alberta, Saskatchewan and Atlantic Canada is now quite evident in the slowdown in housing activity in those regions. Not only have home sales and house prices edged downward, but a telling leading indicator–rental vacancy rates–have risen sharply in some key resource centres (see chart below). 




Note that despite the strong pace of condo construction in both Toronto and Vancouver, rental vacancy rates remain extremely low in both cities.

The Bank of Canada expects GDP growth to moderate in the fourth quarter and to grow at a rate “above potential” in 2016. Given that the Bank’s estimate of potential GDP growth in Canada is just under 2 percent, this is hardly a positive outlook. I expect Q4 GDP growth of only about 1 percent, which will not be enough to prompt a rate cut, but will certainly weigh on the Canadian dollar as the U.S. moves to hike interest rates at the next Fed policy announcement on December 16. Canadian growth next year will likely be around 2 percent, compared to an estimated mere 1.1 percent this year.

Friday’s employment report for November in both the U.S. and Canada will be telling. Clearly, as the Bank said, “policy divergence is expected to remain a prominent theme.”  Easing by the European Central Bank tomorrow; tightening by the Fed in two weeks; and, the Bank of Canada on hold for the foreseeable future.


Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

1 Dec

Purchase Plus Improvement Program


Posted by: Cory Kline

This one time advance will allow you to make the changes you need to make your home perfect!

Have you been trying to find that almost perfect home? All homes have their flaws and imperfections. Some consumers can deal with these deficiencies in a home, but for others this can be a deal breaker.

Maybe the kitchen needs an update, the bathroom is in desperate need of a makeover or maybe the home just needs a fresh coat of paint with the enhancement of hardwood floors, the quickest, cost effective and most powerful impact on a home!

The purchase plus improvement product is for consumers looking to purchase a home that has great potential but needs a little TLC. With the purchase plus improvement program you can make those needed improvements on your home immediately after taking possession and you can have these improvement costs rolled into your home loan for one easy payment. All of these projects can increase functionality, beauty and potentially add value to your dream home.

Written By: Josee Picco

Click HERE To Read More