Welcome to the Ontario Mortgage Loan Blog. The site is for consumers, real estate and mortgage professionals or anyone who wants to keep up with the ever changing mortgage market. Thank you for visiting Please feel free to post questions, comments or concerns about the mortgage or real-estate market. scott@OntarioMortgageLoan.com
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The CAAMP Foundation and Canada Credit are joining forces to help increase financial literacy for Canadian home buyers. By providing more resources Canadians will be empowered to make more informed decisions and better financial choices.
According to the Canada Mortgage and Housing Corporation housing starts fell in May to 189,100 units down from 201,800 units in April. The biggest decreases were seen in the prairie regions where urban starts decreased 21.8%, conversely starts increased 23.3% in Atlantic Canada.
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With an aging population one of the most difficult challenges we face in the future will be caring for seniors. Many seniors live longer and happier lives when they are able to stay in their own homes. Community Care Access Centres can help provide the in home care that may be required in many situations. For seniors on a low income who have difficulty and need minor changes the CMHC-Home Adaptations for Seniors Independence program may help.
As expected the Bank of Canada raised its key lending rate by 1/4 of a percent today. The move represents the first increase since July of 2007, since than rates have been steadily falling. Earlier in the year the Bank of Canada had indicated that the era of record low Canadian interest rates was over and that Canadians should prepare for higher interest rates in the future.
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The Canadian economy grew 6.1% in the first quarter of 2010, compared to 4.9% in the fourth quarter of 2009 according to Statistics Canada. The increase will no doubt put more pressure on the Bank of Canada to raise rates when they meet tomorrow. Most analyst are expecting a 25 basis point hike and a series of small hikes that would see Canadian interest rates rise about 2% by the end of 2011.
Last week Garry Marr, of the Financial Post wrote one of the more interesting articles on what effect there might be on those who have been funneled into a 5 year fixed rate mortgage due to the changes that came into effect on April 19, 2010. I can’t help but think this might end badly as it seems when ever people are herded into a particular term or product the clients end up being the losers. More troubling is the fact that most research indicates that shorter and more flexible terms are often better for the client. Below is a link to the Financial Post article which is a must read for anyone considering a 5 year fixed term.
After hitting 6.25% the 5 year fixed rate has been easing and effective Friday May 21’st, the RBC will lower its posted 5 year fixed rate to 5.99%. Expect other banks and lenders to follow with a rate drop. Canadian bonds and equities have both been falling as the economic outlook has become a little more cloudy both globally and domestically.
After a recent TD report expecting Canadian real estate to cool in 2010-2011, the CMHC has issued a press release and its forecast for the housing market in 2010 and 2011 is very similar to the TD’s outlook. With housing starts expected to be up over the next two years and the changes to rules for government backed mortgage insurance that took effect on April 19, 2010, the CMHC forecast that growth in real estate should be more stable and inline with the historic long term growth rates after the market had strong gains in 2009, rebounding the lows early in the year.
Often getting a mortgage can be a challenge for any self employed individual, especially for those who are newly self employed. Merix Financial, Business for Self Simplified is designed to help those who have been self employed 3 years or less and show little income. To qualify the applicant must have at least 2 years previous experience in the same industry; for example someone owning a restaurant 2 years may have previously worked 5 years managing a restaurant before deciding to open their own.
With interest rates rising and the high margin between fixed and variable rate mortgages in Canada, it seems that more Canadians are interested in hybrid or combination mortgages. According to RBC’s 17th Annual Homeowners Survey 40% of Canadians who are likely to buy a home within the next 2 years plan on taking out a combination mortgage. Only 32% of those surveyed in 2009 planned on taking a combination mortgage.
Banks have been quick to capitalize on the demand for combination mortgages as the product has become more widely available and actively promoted. Many clients enjoy the diversification that hybrid mortgages give them, having 50% of their mortgage fixed and 50% variable allows some exposure to lower variable rates while giving them added security that fixed rates offer.
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