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Chris Simpson
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109 - 3550 Saanich Road, Victoria, British Columbia
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BLOG / NEWS Updates
What is your Best Rate?
Recently I had some good friends of mine ask what the going interest rates are and more
importantly what is the best rate could I get them. Obviously not an uncommon question in my
line of work but this is no longer a quick and easy question. Last year if I wanted to be a little
cheeky (depending on who was asking) Id respond with a question of my own, like whats your
credit score? 9 times out of 10 there would be an awkward pause and blank stare followed by a
does it matter? Yes, yes it does. Once we got through that portion of the conversation Id then
begin talking about the rates. But that was 2016, and now that it is 2017 the rate game has
become a little like the did you see what Trump just tweeted conversation that is making people
yearn for the days of old.
Last October Finance Minister Bill Morneau announced significant changes* to our industry
which included new securitization rules and qualification requirements. These changes forced
lenders to adjust their pricing models to account for the increased costs of doing business and
those costs have been handed down to you the borrower. Prior to that announcement I had a
nice simple rate sheet that told me what every lender was offering. Now my rate sheet could
easily be 5 pages long and it would still be incomplete. Credit scores were once the driving
factor in your interest rate, now Mortgage Brokers should be asking you a laundry list of
questions to determine what mortgage is best suited for you long before they tell you the best
rates.
Here are some questions you need to be prepared to answer before you can start asking about
the interest rate. Is this a purchase or refinance? What is the loan to value percentage? What
term and amortization would you like? What type of property are you wanting to
mortgage? Can you prove your income? Can you stomach the idea of a very large penalty if you
need to break the term? These are just a few of the questions your Mortgage Broker needs to
ask when you to properly evaluate what the best rate for you is.
Do you want to know where you fit into the new world of mortgage rates? Please give me a call
or send me an email and I would be happy to help.
*Industry Changes: Department of Finance and Article from the Globe and Mail
Mortgage Tip: Do you know what is on your credit report? Check your report for free.
Housing market continues to moderate in June
Statistics released today by the Canadian Real Estate Association (CREA) show national home sales were down between May and June 2021.
Home sales recorded over Canadian MLS Systems fell by 8.4% month-over month in June 2021, marking the third straight monthly slowdown since activity hit an all-time record back in March. While sales are now down a cumulative 25% from their peak, and below every other month in the last year, June transactions still managed to set a record for that month.
Month-over-month declines in sales activity were once again quite broad-based, with sales moderating in around 80% of all local markets, including almost all large markets across Canada.
The actual (not seasonally adjusted) number of transactions in June 2021 was up 13.6% on a year-over-year basis and marked a new record for that month.
While there is still a lot of activity in many housing markets across Canada, things have noticeably calmed down in the last few months, said Cliff Stevenson, Chair of CREA. There remains a shortage of supply in many parts of the country, but at least there isnt the same level of competition among buyers we were seeing a few months ago. As these conditions continue to evolve over the summer and fall, your best bet is to consult with your local REALTOR for information and guidance about buying or selling a home at this stage in the cycle, continued Stevenson.
Record rise of home prices in May
In May the TeranetNational Bank National Composite House Price IndexTM was up 2.8% from the previous month, the largest monthly rise since the index series began in 1999. It was led by four of the 11 constituent markets: Ottawa-Gatineau (4.9%), Halifax (4.3%), Hamilton (3.7%) and Toronto (3.4%). Rises were more moderate for Vancouver (2.3%), Winnipeg (2.2%), Montreal (2.2%), Victoria (2.1%), Calgary (1.4%), Quebec City (1.2%) and Edmonton (1.2%). It was a third consecutive month in which all 11 markets of the composite index were up from the month before.
The May rise was consistent with the increase in number of home sales over the last several months as reported by the Canadian Real Estate Association. For a ninth straight month, the number of sale pairs entering into the 11 metropolitan indexes was higher than a year earlier. The unsmoothed composite index, seasonally adjusted, was up 2.1% in May, suggesting that the uptrend of the published (smoothed) index could continue.
The May composite index was up 13.7% from a year earlier, for a 10th consecutive acceleration and the strongest 12-month gain since July 2017. The 12-month rise was led by five markets Halifax (29.9%), Hamilton (25.5%), Ottawa-Gatineau (22.8%), Montreal (17.6%) and Victoria (15.3%). Toronto matched the countrywide average at 13.7%. Lagging that average were Vancouver (11.9%), Winnipeg (10.4%), Quebec City (9.8%), Calgary (4.5%) and Edmonton (3.6%).
Besides the Toronto and Hamilton indexes included in the countrywide composite, indexes exist for seven smaller urban areas of the Golden Horseshoe Barrie, Guelph, Brantford, Kitchener, St. Catharines, Oshawa and Peterborough. In May all seven were up from the previous month and from a year earlier. The 12-month gains ranged from 27.6% for Brantford to 31.4% for Barrie.
Source: https://housepriceindex.ca/2021/06/may2021/
