30 Aug

Residential Market Commentary


Posted by: Cory Kline

The federal finance minister seems convinced that Ottawa’s efforts to cool the housing market are working. In a letter to the House of Commons finance committee Bill Morneau says, “A decline in the share of new insured loans issued to highly indebted borrowers suggests that the quality of credit is improving in the high-ratio mortgage market.”

This does not appear to take into account the abundance of homes priced at more than $1 million in the biggest and busiest markets of Toronto and Vancouver. These homes are not eligible for government sponsored, high-ratio mortgage insurance under federal policy changes put in place back in October.

The latest numbers out of the GTA may force the minister to take another look at his comments. The figures show the average price for an existing detached home dropped below the million-dollar threshold in the first two weeks of this month. That will make a lot more high-ratio mortgages eligible for CMHC insurance once again.

Economists and other market watchers are not rushing to call the slide in Toronto prices a “correction”. Many believe it is likely do to a change in the composition of the market; with more, lower priced, homes finally going up for sale.

It may be worth noting that only three of the four major policy changes announced by the federal government back in October have actually been implemented nearly a year later. More stringent stress tests for mortgage qualification, restriction of mortgage insurance to homes costing less than $1 million, new reporting requirements for the principal residence capital gains exemption – all aimed directly at consumers – are firmly in place. A plan to get lenders, in particular the big banks, to share in the risk of insuring against mortgage default still languishes in the consultation stage.

Aug 28, 2017
Thank you First National Financial for your insight.

28 Aug

Spousal Buyout Mortgage?

Mortgage Tips

Posted by: Cory Kline

If you happen to be going through, or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property in order to buyout your ex-spouse.

For most couples, their property is their largest asset and where the majority of their equity has been saved. In the case of a separation, it is possible to structure a new mortgage that allows you to purchase the property from your ex-spouse for up to 95% of the property’s value. Alternatively, if your ex-spouse wants to keep the property, they can buy you out using the same program.

Here are some common questions about the spousal buyout program:
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22 Aug

Avocado Toast & Budgeting

Mortgage Tips

Posted by: Cory Kline

There was an article reprinted in the National Post recently about an Australian millionaire’s opinion on millennials not being able to afford a home because they’re wasting money on avocado toast, at $22 per plate. The article was quickly mocked but it was an interesting article on two fronts: 1) the irresistible urge for avocado toast and 2) the importance of budgeting.
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10 Aug

Did you know…

Mortgage Tips

Posted by: Cory Kline

In Canada, 6 out of 10 households break their existing 5-year fixed mortgage by the 38 month? Make sure you talk to your Mortgage Broker about the penalty structure when starting a new 5-year term.



9 Aug

Home Equity Line of Credit in Canada vs. Reverse Mortgages

Mortgage Tips

Posted by: Cory Kline

In our business, we are constantly approached with questions about how reverse mortgages work and how they compare to Home Equity Lines of Credit (HELOCs). HELOCs are the most closely comparable products in Canada and many believe them to be superior to reverse mortgages. But many Canadians look at only two things and assume HELOCs are better in every situation: (1) lower interest rates; and (2) the flexible access to cash. Most are forgetting some of the other features and benefits that they should compare before deciding. Below is a chart that lets you see the bigger picture between these two rival products.
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