Conexia Mortgage

Today's Bank of Canada announcement of a 75 basis point increase is going to increase borrowing costs on lines of credit and variable rate mortgages. However, fixed mortgage rates are NOT directly impacted by Bank of Canada rate changes. The fixed rates are priced primarily off of the bond market. The bond market responded to market conditions faster than the Bank of Canada has this year. Due to this, fixed rates increased considerably earlier this year. We have seen times in the past when Bank of Canada increases rates and fixed rates do not change or even drop slightly. We do not expect fixed rates to drop in the short term, just highlighting that the Bank of Canada changes and fixed rate mortgages are not tied together. If you have questions on mortgages and rates, please contact us.

In light of the unprecedented situation with the Covid-19 pandemic, banks are allowing mortgage holders to defer mortgage payments for potentially up to 6 months. To take advantage, you will need to call your lender and request a deferral of your mortgage payment.
We encourage anyone who is experiencing financial difficulty due to the current circumstances to take advantage of this by contacting their mortgage lender.

Canadian banks move to help customers, allow deferral of mortgage payments Canada's big banks are moving to provide financial breathing room to customers hurt by disruptions from the steps taken to slow the spread of COVID-19.

The Bank of Canada cut its interest rate .50% this morning. Major Canadian banks followed this by reducing their prime lending rate from 3.95% to 3.45%. This rate cut will directly affect variable rate mortgages and lines of credit, which are tied to the prime lending rate.
We are seeing decreases in fixed mortgage rates and expect more decreases in rates will be coming.
https://business.financialpost.com/news/economy/bank-of-canada-cuts-rate-by-half-a-point

The full details on this change to qualifying are not clear yet. However, we believe this change will lower the qualifying interest rate on insured mortgages - making qualifying easier for borrowers with less than 20% down payment.

Mortgage stress test changes coming, Morneau announces, in move that may make buying a home easier Changes that take effect on April 6 aimed at adjusting the benchmark rate

Happy New Year!

Regarding the first time buyer program, the details were released last week. To clear up some of the confusion and specify the requirements and guidelines, below are key dates for program role out and points to be aware of:

Important Dates:

The first date purchases are eligible to qualify for the home buyers incentive are September 2nd. The first closings on the program are November 1st.
Buyers who purchase a property prior to September 2nd are not eligible for the program, even if the closing happens after September 2nd.

Buyers that are eligible:

First time buyers must have saved at least the minimum 5% down payment.
To count as a first time buyer, client, or their spouse cannot have owned a property in the last 4 years. Technically they could have owned a home before to qualify for the program, but not within the past 4 years.
Qualifying buyers can get a loan for 5% of the purchase price on an existing home, or 10% if purchasing a new home.

How the program works:

The loan is paid back when the property is sold or 25 years after purchase date, whichever comes first.
The loan is interest free.
The Government will share in the equity increase or decrease
Maximum amount of the mortgage is 4 times household yearly income. For a couple earning combined $100K a year, maximum mortgage amount eligible is $400,000.
Maximum family income to qualify is $120K. First time buyers earning more than $120K are not eligible for the program
The loan amount from the government is registered as a second mortgage on the title of the property

An example of how the program works is, buying an existing property for $300,000, receiving 5% incentive, $15,000. Property appreciates in value to $400,000 and is sold. The owner has to repay the government 5% of the sale price of the home. In this example, they have to pay back $20,000 to the government upon sale of the home (5% of $400K)

Same requirement if the property loses value. Buy for $300,000, receive a 5% loan, $15,000. Property depreciates in value to $250,000 and is sold. The borrowers owes the government 5% of the sale price $12,500 (5% of $250K). Less than the original amount they borrow, due to the property value decreasing.

Please contact us with any questions.

Aspen is the first new oil sands development to be approved since 2013 - maybe this will help the Alberta economy and real estate too.

Imperial braves Canadian price slump with new $2.6 billion oilsands project Aspen is the first new oilsands development to be approved since 2013

Are you looking to buy a home and are self employed? CMHC is making it easier to qualify as self employed this fall - Ask us how this might help you get into the house of you dreams call today 403-214-0444 or www.conexia.ca

CMHC on Deck to Make Things Easier for Self-Employed Borrowers Are you self employed ? Mortgage rules getting you down? In September 2018 the rules are changing will become more relaxed. See how this might help you with your Alberta real estate purchase.

A pic from the in 2013 - hoping it won't happen again with all the