February 25th Mortgage Industry Update
February 25th, 2020 Mortgage Industry Update
The Bank of Canada announced on January 22nd that it’s overnight lending rate will remain at 1.75%. The prime rate remains 3.95%. The common prediction currently stands that the Bank of Canada will likely keep rates consistent for early 2020, with the next major move likely being a rate decrease.
Additionally this week:
– Toronto city council approved its $13.5 billion operating budget and its $43.4 billion 10-year capital budget. Residential property tax rates for 2020 will rise 4.24%. For the average homeowner, the property tax increases mean roughly an additional $130 this year.
– TRREB: A significant proportion of those planning to buy homes in the GTA this year are going for detached housing. The share of those seeking this type of property stood at 42% as of fall 2019. This was markedly lower than the 54% reading in fall 2015.
– Almost 300,000 jobs were added to the Canadian economy last year. Wage growth also accelerated to some of its fastest rates since the 2008-09 crisis, while the unemployment rate declined to nearly its lowest levels in four decades.
– CREA: January real estate transactions up 11.5% from 2019. Average price $504,350, up 11.2%. Best January sales figures in 12 years. Overall value of homes sold continues to rise, with MLS Home Price Index rising 4.7% year-over-year—the eighth straight month it has seen gains.
– OSFI announced it is considering implementing same benchmark rate of the weekly median five-year fixed insured mortgage rate from mortgage insurance applications, plus a 2% buffer for uninsured mortgages, will align minimum qualification limits for insured and uninsured market.
– Minister of Finance announced changes to the “stress test.” These changes will come into effect on April 6, 2020. The new benchmark rate will be the weekly median 5-year fixed insured mortgage rate from mortgage insurance applications, plus a two percent (2%) buffer.
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.