Allen Chow - Mortgage Agent

Attention: Effective July 1st!

Canadians looking to borrow money for a home purchase will experience some extra challenges after the Canada Mortgage and Housing Corporation announced changes to its lending standards on Thursday. The country's national housing agency is increasing the qualifying credit score for mortgage insurance to 680 from 600 and limiting gross and total debt servicing ratios to their standards of 35 per cent and 42 per cent, respectively. "COVID-19 has exposed long-standing vulnerabilities in our financial markets, and we must act now to protect the economic futures of Canadians," CMHC head Evan Siddall said in a statement. "These actions will protect homebuyers, reduce government and taxpayer risk and support the stability of housing markets while curtailing excessive demand and unsustainable house price growth." Under the changes effective July 1, CMHC will also no longer treat non-traditional sources of down payment funding, such as a personal unsecured line of credit, as equity for insurance purposes. It will also suspend refinancing for most multi-unit mortgage insurance. The move comes just weeks after Siddall appeared before the Standing Committee on Finance in Ottawa to warn of trouble ahead for the housing market. "Our support for home ownership cannot be unlimited," he said. "Home ownership is like blood pressure: you can have too much of it. Housing demand is far easier to stimulate than supply and the result, as we’ve seen, is Economics 101: ever-increasing prices."
The majority of mortgages insured by the CMHC will not be affected by the more stringent qualifications.

Overall criteria:
-Maximum Total Debt Service (TDS) Ratio from 44 to 42
-Gross Debt Service (GDS) Ratio from 39 to 35
-Credit score MINIMUM 680

https://www.theglobeandmail.com/business/article-cibc-to-lower-credit-card-interest-rates-for-some-clients-seeking/

Canada’s biggest banks lower credit-card interest rates for some clients seeking relief CIBC quickly followed by RBC, National Bank, Toronto-Dominion Bank, Scotiabank in an unexpected shift in strategy

http://td.mediaroom.com/2020-03-17-Canadas-Six-Biggest-Banks-Take-Decisive-Action-To-Help-Customers-Impacted-by-COVID-19

Canada's Six Biggest Banks Take Decisive Action To Help Customers Impacted by COVID-19 - Mar 17, 2020 TORONTO, March 17, 2020 /CNW/ - Canada's six largest banks today announced plans to provide financial relief to Canadians impacted by the economic consequences of COVID-19.

We’ve been hearing this for years. Curious to see what will actually happen. The best time to buy (I feel) is always NOW.

Canada due for big drop in home prices, according to housing bubble index | The Star Canada, New Zealand atop Bloomberg economist’s list of nations at risk of price drop due to high house price-to-rent and house price-to-income ratios

The new First-time Homebuyer incentive from the government to officially start in September. Details in the article below:

Government lays out fine print of new CMHC program that could contribute 10% to price of first home | CBC News The government has released details of a program it announced during the last federal budget, an initiative that could see Canada's housing agency contribute up to 10 per cent of the price of a buyer's first home if certain conditions are met.

Toronto housing market starts buying season with a bang, sales up 17% Average selling price climbs 1.9% to $820,148

Homebuyers to get new mortgage incentive, Home Buyer’s Plan boost under 2019 budget The federal budget proposes a CMHC-funded contribution to insured mortgages and a higher limit on tax-free RRSP withdrawals for first-time home buyers.

Decisions, decisions! Fixed rate or variable? This article may help (potential) borrowers decide what’s best for them.

Variable rate mortgages are looking mighty good right now Plus how to calm that shopping impluse

An estimated 47% of Canadian mortgages will be renewing this year. Should you fall into this category, do NOT jump at the first offer you receive from your current lender. Despite the imposed stress test/B20 regulations (on all new mortgages), there may still be other cost-effective options I would love to help you explore. Renewal time is a great opportunity to re-assess your needs and to ensure that you have the right mortgage going forward ... potentially saving you thousands.

Contact me to discuss.

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https://www.mortgagecentre.com/allenchow

Allen Chow
Mortgage Agent
Lic # 14001024
Pilrock Mortgages - The Mortgage Centre
Brokerage Lic # 12707

Nearly half of existing mortgages face renewal in 2018: CIBC report TORONTO — Nearly half of all existing mortgages in Canada will need to be renewed this year, substantially more than in prior years, according to a new report, amid rising interest rates and new rules that make it tougher for some borrowers to shop around.