For more than 9 years now I have been learning what is important to you. Then finding the best solution for you. Many of my clients were not sure if they needed to use my services as a Mortgage Professional, but once they experienced how this helped them with their Home Buying/Re-Financing project, they are happy they did. Mortgages are deceptively simple and endlessly complicated. You can only choose when you have a choice and have been fully informed. Many great Bank Specialists are providing service to their clients, but they can only offer their Banks solutions. As an independent professional, I work for you by informing you on all things mortgage, including who will be your Best Lender. My services are FREE (with OAC) to my clients. The lenders compensate my business to provide them a qualified Client.
I look forward to assisting YOU.
RATES: Here's the thing...I will connect you with the best rate for your BEST mortgage. You will not find better rates anywhere. I Guarantee it.
Residential Market Commentary - Qualifying rate conundrum
Credit: First National Financial LP
The Bank of Canadas Qualifying Mortgage Rate has popped back onto the real estate radar. Back in July, the central bank lowered the rate for the first time in nearly three years.
The idea behind the QMR is to ensure that home buyers will be able to afford their mortgage as interest rates rise in the future. It is a stress test that sets the lowest theoretical interest rate the buyer will be charged. That rate is significantly higher than any actual rates being charged by mainstream lenders.
The Bank of Canada bases the qualifying rate on the five-year rates posted by Canadas Big Six, federally regulated banks. The number is rather arbitrary, though, because the big banks do not actually charge their posted rates. The real rates are markedly lower. The posted rates tend to have more to do with the penalties charged when a home buyer breaks their mortgage before the end of its term.
There is no obvious standard for setting the qualifying rate. A well known Toronto mortgage broker uses this illustration: two years ago the yield on Government of Canadas five-year bonds was 1.42% and the QMR was 4.64%. Earlier this year, five-year bonds were back at 1.42%, but the QMR was 5.19%.
It is important for consumers to know that the current rules around the qualifying rate tend to favour the big, federally regulated banks. For example, the QMR stress test is not applied when customers renew their mortgage with their existing, federally regulated lender. This can have the effect of trapping customers who might otherwise be able to take advantage of lower rates with a different lender.
Many in the mortgage industry have been calling for more transparency and consistency in the QMR rules in order to make them fairer and simpler.
Unemployment rate unchanged in October
Following two consecutive months of growth, employment held steady in October. The unemployment rate was unchanged at 5.5%.
On a year-over-year basis, employment grew by 443,000 or 2.4%, driven by gains in full-time work. Over the same period, total hours worked were up 1.3%.
In October, employment increased in British Columbia and Newfoundland and Labrador, and was little changed in the other provinces.
Employment was down for men in the core working ages of 25 to 54, and grew for the population aged 55 and over.
Employment declined in manufacturing and construction. At the same time, employment was up in public administration and in finance, insurance, real estate, rental and leasing.
The number of self-employed workers decreased, while the number of employees in the public sector increased for the second consecutive month.
Canada: Household Credit Growth Continues To Climb in September
CANADIANS BORROWING HAND OVER FIST
Total Canadian household credit growth continued to accelerate in September, reaching a pace last seen in mid-2018. Despite a slight deceleration from the previous month to 4.3% at a seasonally adjusted annualized rate (m/m saar), trend growth remains at elevated levels. Both mortgage and consumer credit growth contributed to the 68 bps slowdown from the prior month (46 bps and 22 bps, respectively), but borrowing conditions remain favourable overall with trend growth still in strongly positive territory.
RESIDENTIAL MORTGAGE CREDIT EXPANSION CONTINUES ITS ASCENT
Residential mortgage credit growth continued on its upward trajectory in September supported by favourable borrowing conditions and strong labour markets. Mortgage loan growth accelerated by 4.9% m/m saar in September, pushing the year-on-year trend growth rate to 4.2% y/ythe fastest pace since mid-2018, marking a well-pronounced recovery in the mortgage-borrowing market.
Canadas real estate market looks to be rebounding following a turbulent couple of years due to various policy announcements from 2017 to 2018 designed to cool the market. Mortgage borrowing has picked up through the second half of 2019 with the uptick in demand following a reduction in the mortgage qualifying rate in July and a decline in 5-year mortgage rates. With the Bank of Canada under pressure to continue to provide a stimulative environment following sustained levels of uncertainty, residential mortgage credit growth is expected to remain supported in the foreseeable-future.
Strength in Canadian labour markets has also been conducive to a favourable borrowing environment. Septembers surge in job gains contributed to a fall in the unemployment rate to 5.5%.