|6 Months||3.10 %|
|1 Year||2.99 %|
|2 Years||3.24 %|
|3 Years||3.09 %|
|4 Years||3.54 %|
|5 Years||3.24 %|
|7 Years||3.44 %|
|10 Years||3.99 %|
|Current Prime||3.45 %|
|5 Year Variable||2.40 %|
This past June, Mortgage Professionals Canada published their survey results on the Next Generation of Homebuyers; adults under the age of 40 who don’t currently own a home but expect to own in the future. If you are planning on buying, or help a child get into homeownership, these results can be an interesting comparison to your own situation. Here are some of the key findings:
- 52% are under 30 years old, 48% aged 30 to 39
- 55% singe, 39% married/living with a partner
- 81% have no children
- 72% agree that mortgages are good debt, and 76% agree real estate is a good long-term investment. 58% are optimistic about the economy in the next 12 months.
- The decision to buy is often influenced by key life events – start a family (33%), getting a promotion/raise (30%), getting married (29%), inheritance (8%).
- Primary downpayment sources are personal savings (73%), gift/loan from a family member (36%), TFSA (33%) and RRSP (29%).
- Average downpayment savings is $37,000 among imminent buyers.
- Neighbourhood (61%), safety (58%), and potential for increase in value (50%) are the most important home features. Features that are considered to be worth a premium are nice neighbourhood (33%), short commute (31%) and safety (29%).
In terms of where to source their mortgage, 59% said they will likely use a Mortgage Broker once aware of their services. The top five reasons cited for using a mortgage brokers are:
- They are experts/specialize in mortgages
- Getting the best rate
- Help you negotiate a better deal
- Access to more lenders
- Convenient, one-stop shopping
Wherever you are in your homeownership journey, I am here to answer your questions and help you find the right mortgage, with the rate and flexibility you need to be a happy homeowner.
Real estate and rates post Brexit and OSFI tightening
The uncertainty created with Brexit, in which Britons voted to leave the European Union, will keep interest rates low in the U.S. and Canada well into 2019 according to most economists. The impact on Canada for both its real estate markets and interest rates looks bright. Foreign money, in search of stable, safe havens for housing assets will naturally gravitate to Vancouver and Toronto now that Britain looks riskier. A continued low interest rate environment for many years will allow buyers outside of those areas to purchase with confidence, knowing that rates will remain low and affordable for some time.
The Office of the Superintendent of Financial Institutions (OSFI) on July 7th released a letter to all federally regulated financial institutions (FRFIs) to engage in prudent mortgage underwriting. They are clearly concerned these low rates will continue to fuel the housing market, and want FRFIs to place increased focus on verifying borrowers’ income (particularly for sources outside of Canada), have greater scrutiny of loans to borrowers with high debt or low credit scores, and ensure borrowers can make mortgage payments if rates rise. As a result, mortgage applications will become subject to more scrutiny and requests for increased documentation. It has never been more important to deal with an experienced mortgage professional who has access to as many options as possible, including lenders not subject to federal regulations, and will work with you to ensure your situation is clearly represented with your lender.