July 31st Mortgage Industry Update
July 31st, 2018 Mortgage Industry Update
The Bank of Canada announced on July 11th that it’s overnight lending rate will increase to 1.50% from 1.25%. The prime rate thus increases to 3.70% from 3.45% with most lenders. The common prediction remains that there will be no further rate increases for the remainder of the year.
Additionally this week:
– Canada’s annual inflation rate rose to 2.5% last month, boosted by consumer prices which grew at their fastest pace in six years. The boost follows a 2.2% reading in May, as energy prices and mortgage interest costs pushed the figure higher.
– Simon Fraser University study: Vancouver ranks as least affordable metro across North America. Compared a city’s median home price to median household income. Greater Vancouver took rank with a ratio of 11. Median home price of $800,220 11x the median household income of $72,662.
– Mortgage Professionals Canada: Recent government policies (stress test) will result in permanent generation of middle-class renters. 100k Canadians have already been priced out of buying a home. 18% of prospects who can afford to buy their preferred property unable to pass test.
– Canadian Bankers Association: More people in Saskatchewan are behind on mortgage payments than any other province in the country. One in every 126 homeowners in the province is three or more months behind in their payments, three times the national average.
– CMHC to give lenders more guidance and flexibility to help self-employed homeowners from October 1, 2018. 1) For those who have been operating their business for less than 24 months. 2) Broader range of documentation options to support “add back” approach for grossing up income.
– BC taking action to curb the reduction of available rental homes caused by owners opting for the surging short-term rental market with services such as Airbnb. New enforceable rules for strata corporations will hike fines to a hefty $1000 per day – 35 times the current limit.
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.