How are you affected? Making sense of what’s happening in the mortgage world.

Courtesy of Rakhi Madan, Mortgage Innovators

Let me begin with my heartfelt hope that you and your loved ones are in good health. We are all in this together and I want you to know that I am here for you to help de-stress your financial situation. Please get in touch if you have any questions.

The mortgage marketplace has been continually shifting since this coronavirus crisis began. Here is a summary of some of the most common questions to help you understand how you may be impacted.

Q. What do the mortgage payment deferrals mean, and should I consider this?

A. Mortgage insurers and lenders announced that eligible clients can delay mortgage payments. This is a compassionate option only for those who are in a serious financial hardship and unable to make their mortgage payments. You need to apply, with assistance determined on a case-by-case basis. In the meantime, please do not start skipping payments. If you urgently need help, please get in touch. I can help you find the right channels to apply.

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We Are Here For You!


We have been busy reaching out to Clients, Friends & Family to check on everyone!

We hope you & your loved ones are feeling ok and are staying safe at home!

How are you keeping busy & filling your days?

We’d love to hear about the books your reading, any yummy receipts you can share 稜? Have you started a new daily workout routine? Any recommendations for a TV Series or Movies?

We are here for you and your family during these challenging times, and as most of us we are watching the news and our investments. Please reach out with any Real Estate questions or concerns, we are here to help!

Home sales poised to moderate

The COVID-19 outbreak will likely moderate house sales in the near term, according to an economist.

Brian DePratto, senior economist at TD Bank, said the current market conditions due to the impact of the coronavirus paint a bleak picture for home sales in the next months.

“That said, sales are well-positioned to make a strong recovery once the impact of the virus dissipates, helped by an ultra-low interest rate environment,” he said in a report in The Canadian Press.

DePratto said the recovery in sales once the concerns surrounding the COVID-19 ease will likely translate to price gains.

Home sales increased by 26.9% annually in February. On a monthly basis, sales were up by 5.9%, driven by the strong turnout in the Greater Toronto Area (GTA). This came with a 7.3% growth in new listings.

The healthy sales activity and the gains in listings came with a 15.2% annual growth in the national average price for homes, which now stands at $540,000. Excluding the major markets of Greater Vancouver and GTA, the national average price during the month grew by 10.5% to $410,000.

Coming soon! Feds ease up on the stress test

Anyone looking for a mortgage in the last few years has been introduced to the “stress test”. In order to qualify for a mortgage, Canadians must prove they can withstand an increase in rates, which requires them to qualify for payments far above what they will actually pay. The good news is that the Canadian government has decided to ease up on the stress test.

Lower qualifying rate

Effective April 6, anyone applying for an insured mortgage (less than 20% equity) will see a fairer stress test used. It’ll be based on the median five-year fixed insured-mortgage rate, plus two percentage points. This makes the stress test more dynamic and inline with actual rates people are borrowing at and will be set every week.

It is expected that the same new benchmark rate will be used for mortgages that don’t require default mortgage insurance (more than 20% equity). Looks like the qualifying rate for uninsured mortgages will change to the greater of:

  • the actual contracted mortgage rate, plus 2%; or
  • the new benchmark rate described above.

This means the stress test for uninsured mortgages will still be a slightly tougher hurdle.

What’s the bottom line?

Any drop in the qualifying rate – with the new stress test or declining rates in general – will make qualifying easier and increase your purchasing power. So, the upcoming change on April 6 is good news.

Is the mortgage world still confusing? Yes absolutely, probably more so! That’s why great advice based on experience and access to multiple lending options is so important. While the stress test may be less stressful, my goal is to reduce stress from your entire mortgage experience and help you build wealth with the right mortgage now and excellent advice going forward. Get in touch at anytime, these are exciting times for buyers and homeowners!

The NO stress test option if you have more than 20% equity!

Some of our lenders have a mortgage that allows clients who have more than 20% equity to qualify for a mortgage without the stress test. This mortgage has a rate premium attached, which means it’s an option only for those that can’t qualify under the stress test. Benefits may include lower rates than B/private lenders, no fee and 5-year terms. If the stress test is too tough a hurdle for your situation, this is a great option to consider!

How to leverage your RRSPs to buy your first home

Are you in the market for your first home? Dreaming of a space you can call your own? If you are an eligible first time home-buyer, then contributing to your RRSP(s) before the March 1 deadline can help you increase the funds available for your home purchase.

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw from your Registered Retirement Savings Plan (RRSP’s) in order to purchase or build your first home. In 2019 there was a change to the HBP in an attempt to provide first-time home buyers with greater access to their RRSP savings by increasing the withdrawal limit from $25,000 to $35,000.

How do I know if I qualify?

In order to qualify, at least one homeowner must be a first-time homebuyer, which is defined as the following:

  • You are considered a first-time home buyer if;
    • You have never owned a home before
    • In the last 4 years, you did not occupy a home that you or your current spouse or common-law partner owned
  • You have a written agreement to buy or build a home
  • You are a resident of Canada
  • You intend to occupy the qualifying home as your principal place of residence within one year after buying or building it
  • You have gone through a breakdown of marriage or common-law partnership (even if the other first-time home buyer requirements are not met)

Buying my first home using The Home Buyers’ Plan (HBP)

Once you know you can take advantage of the HBP, and have topped up your RRSP(s) (if applicable), make an appointment with a mortgage professional to complete a financial health check to determine what you qualify for. This will make it easier for you to shop the market so you are able to look at real-estate listings within your budget.

Note * The down payment funds must be in your account for a minimum of 90 days for the withdrawal to qualify under the HBP.

Do I have to pay the government back?

You will have 15 years to repay the amount used from your RRSP(s), or you can pay in full at anytime during that period. Your repayment period starts on the second year after you first withdrew your RRSP(s) for the HBP. For example, if you withdrew $35,000 in 2020 to purchase your first home, you have until 2022 before your repayment schedule commences.

Each year, the Canada Revenue Agency (CRA) will send you an HBP statement with your notice of assessment in order for you to understand how much has been paid back to date, the amount you need to contribute to your RRSP(s) and your HBP balance. 

Are condos starting to lose their appeal?

Condominiums reported the fastest price appreciation amongst all housing types last year, but it seems their dominance could soon end as millennial homebuyers start to shift their preferences to established homes, according to a market survey forecast by Royal LePage.

Over the past year, the median price of condos rose by 3.3% to $487,525. The Greater Toronto Area witnessed the most significant growth at 7.8%, followed by the Greater Montreal Area’s 4.4%.

However, the national price gains were offset by the annual decline in Greater Vancouver, where the median price of a condo decreased by 3.4%.

While the average condo price in the Greater Toronto Area is expected to increase by 6% this year to $600,000, detached homes are quickly catching up — an average two-bedroom home is expected to post price gains of as much as 4.5%.

Royal LePage CEO Phil Soper said millennials are starting to look for bigger spaces for their growing families.

“With kids in hand and dog on leash, these parents are now eyeing the suburbs that their baby boomer parents so coveted. We predict that the period of disproportionately higher price appreciation in the condo segment is drawing to a close as interest in detached homes is reborn,” he said.