The IMF has recently issued another warning about Canada’s high housing prices and the levels of consumer debt, and has urged the Canadian Government to introduce more tightening to mortgage lending. The upcoming Federal election may save us from the Government acting too quickly, but don’t hold your breath. If the price trends in Vancouver and Toronto continue, I suspect they will act now and not wait until after the election. It is possible that we may see a ‘qualifying’ requirement upon your mortgage renewal.
In the meantime, below are some solutions that may help with your next home purchase or refinance:
• 90% rental offset: This treatment of unauthorized or legal suites can make a huge difference to obtain the financing required or obtain a variable rate mortgage.
• New low fixed rate with cash back: Currently I have a lender willing to provide cash back with 5 year fixed rates as low as banks rates. Requirements are more difficult, but this is a great offer for those who qualify.
• Construction draw mortgages: A great product for customers looking to build their home and allows great flexibility to meet your builders draw requirements.
• Private lending options: This can be a great solution to access up to 90% of the equity in your home to bridge time to allow customers to qualify back to discounted rates or to pay off debts which are at much higher rates.
The Bank of Canada kept rates on hold last week but fixed term bond yields have increased over the past three weeks. This may indicate that a jump in fixed term mortgage rates is on the way.