October 4th, 2016 Mortgage Industry Update

The Bank of Canada announced on September 7th that it’s overnight lending rate will remain at 0.50%. The prime rate remains at 2.70%. Almost all fixed rates remain stable ahead of the autumn season.

Additionally this week:
– Finance Minister: Federal government will no longer allow non-residents who buy homes to claim tax exemption on sales of those properties. Preventative measures = standardizing lending criteria for high- and low-ratio mortgages, including a mortgage stress test. All applicants required to now qualify at Bank of Canada posted rate when mortgage is high ratio (low down payment).

– National Bank: Bank of Canada will keep overnight rate low for years due to lower real neutral interest rate, declining potential growth.

– TD Bank forecasts the Bank of Canada overnight target rate will remain unchanged until 2019.

– Investor Economics and the Canadian Securities Institute: 7% of Canadian households will be considered high net worth by 2022.

– Former federal finance minister Joe Oliver: Toronto will have to implement a tax on foreign buyers of residential real estate, just like Vancouver.

Stay tuned for the next update!

For any questions and concerns please do not hesitate to call Harpreet Singh The Mortgage King at (416) 795-1919.

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