Welcome to a new way of getting a mortgage! My job is to work with your realtor and lawyer to make the mortgage process as straightfoward and stress-free as possible.
I bring over 10 years of experience in finance to the job, having started my career in Europe and Asia as an Investment Banker before returning to Canada in 2011 to become a Mortgage Agent.
I was raised in Kingston and attended Queen's University, graduating with a Bachelor of Commerce Honours degree in 2003. Both my father and brother work as Mortgage Agents and together we form the Matthey Mortgage Team, with a combined 60+ years of mortgage and finance experience.
5 Things You Need to Know about Investors Group’s 1.99% Mortgage
Investors Groups 3 year variable mortage at Prime 1.01% captured a great deal of attention this week. The fact is, this mortgage could be right for some borrowers, as long as they fully understand the terms and conditions. For a $250,000 mortgage, the interest savings versus a 5-year variable rate are approximately $3,000 over 3 years, which is pretty compelling.
Here are 5 things you should consider about IGs 1.99% Mortgage Deal:
Be very certain that you will not need to refinance within the term. You cannot refinance or add to this mortgage unless you sell your home and pay a penalty. So if there is a risk that your financial circumstances could change (loss of income, retirement, financial assistance for a child in post-secondary education, etc.) this may not be the right product for you.
Ensure that the 3.75% monthly payment is affordable payments are based on this much higher rate although your mortgage interest is 1.99%. This is a higher monthly payment than almost any other 3 or 5-year mortgage out there.
Understand what the penalty could be if you do sell your home. The penalty for this mortgage is not clearly stated on the website, which could mean it is pricier than the market average. Most likely it is 3 months interest based on the 3.75% interest rate, which is more expensive than the majority of variable rate mortgage penalties out there.
Check that you qualify at the qualifying rate of 4.79%. Yes thats right. The interest rate is 1.99%, the payments are based on 3.75% but you must qualify for this mortgage at the Bank of Canada qualifying rate of 4.79%. Talk about confusing!
Understand the fees you could be charged at renewal if you do not renew with Investors Group. They are likely to offer to renew you at their rates, but currently their 5 year fixed rate special offer is 3.35% and 5-year variable is 2.75% or Prime 0.25%. These rates are above market, and if you choose to leave Investors Group it is likely you will have to pay upwards of $1,300 in legal and appraisal fees to switch to another Lender. This is due to the way that Investors Group will register this mortgage, making it harder for you to switch without paying fees.
In summary, weigh the interest savings versus the potential fees and costs before you make your decision. Dont be afraid to ask questions to your banker or mortgage broker asking them to clearly define the penalties, fees and special conditions of any mortgage that you enter into. The rate can be a great deal paying thousands more in penalty or fees may wipe out that gain.
Feel free to give me a call or send an email with any questions.
Mortgage Agent, Lic: #M12001008
613 893 4139
Home sales plunged as interest rates continued to rise in May
On a seasonally adjusted basis, home sales slumped 8.6% from April to May, bringing the level of sales slightly below its 10-year average for the first time in 24 months. This decline also represents a third consecutive decrease, with sales down a cumulative 23.0% between February and May. The downward trend is now well established in the country as 75% of the markets have seen their number of transactions decrease during the month. We believe this market moderation should continue in the coming months as the tightening of monetary policy should push variable rates higher and make the stress test even more biting for buyers. Indeed, the stress test uses the higher of 5.25% or the contractual interest rate +2%. Until now, only customers opting for a fixed rate had to qualify with a rate of more than 5.25%. With the Bank of Canada policy rate increase expected in July, the qualification for a variable rate will also exceed 5.25%, a development that should cool the market further since over half of new mortgages are at variable rates.
According to CREA, new listings rose 4.5% in May, the first increase in three months. With the reduction in sales and the increase in new properties for sale, the number of months of inventory rose from 2.3 to 2.7 months in May, its highest level since July 2020. Based on the active-listings-to-sales ratio, market conditions loosened in almost every province during the month, but the housing market continued to be tight in the country as a whole. There are now 3 provinces out of 10 in balanced territory; B.C., Saskatchewan, and Alberta (the latter switched this month). The others continued to indicate market conditions favourable to sellers mainly due to lack of supply.
On a year-over-year basis, home sales fell 21.7% compared to the strongest month of May recorded in 2021. For the first five months of 2022, cumulative sales were down 17.8% compared to the same period in 2021.
Housing starts in Canada increased for a second month in a row by 21.SK in May to 287.3K (seasonally adjusted and annualized), the strongest print since November 2021 (at 305.9K). Starts were well above consensus calling for a 255K print in May while building permits remained high on a historical basis and housing supply continues to be tight. As interest rates rise and demand in the resale market declines, we expect housing starts to also moderate in the coming year.
The Teranet-National Bank Composite National House Price Index increased 2.0% in April compared to March and after seasonal adjustment. On a year-over-year basis, home price increased by 18.8% in April. Ten of the 11 markets in the composite index were up during the month, with Edmonton being the exception.
Canada’s Housing Supply Shortages: Estimating what is needed to solve Canada’s housing affordability crisis by 2030
Were in a housing crisis. This report looks at the overall affordability for the entire housing system in Canada. The report has taken steps to estimate how much additional housing supply is required beyond current trends to restore housing affordability by 2030.
CMHC projects that if current rates of new construction continue, the housing stock will increase to close to 19 million housing units by 2030. To restore affordability, CMHC projects Canada will need an additional 3.5 million units.
Two-thirds of the 3.5 million housing unit gap is in Ontario and British Columbia where housing markets are least affordable.
Additional supply would also be needed in Quebec, a province once considered affordable. It has seen a marked decline in affordability over the last few years. Other provinces remain largely affordable for a household with the average level of disposable income. However, challenges remain for low-income households in accessing housing that is affordable across Canada.