Daily Market Update

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Change in Interest Rates Unlikely

This Wednesday, homeowners and mortgage brokers will be among those awaiting the latest interest rate announcement from the Bank of Canada but experts aren’t predicting any movement. The cost of living will be higher this year as inflation is up to 2% largely due to energy prices but that is the Bank’s target, so the likelihood is that the base rate will stay where it is until the second half of next year. There have even been suggestions from some analysts that there could be a cut in the rate in the short term. The rate has stayed at 1% since September 2010. Read the full story.

 

CMHC Shares More Information

The industry has reacted well to news from the Canadian Mortgage and Housing Association that they will be issuing more data about its loans. When the Corporation publishes its quarterly reports there will now be a supplemental section with a significant amount of data to allow greater analysis of its activities in the housing market. Read the full story.

 

Private Sector Picking Up More Mortgage Insurance

CMHC figures show that the publicly owned company is losing market share to the private sector. There was a significant drop in the number of housing units CMHC insured in the first quarter of this year, partly due to a decrease in home sales at that time, but the year on year figure is also down and is due in part to a decline in market share. Private alternatives are not guaranteed by the government to the same degree (90% as opposed to 100% for CMHC) but these figures will be good news for Ottawa following the International Monetary Fund’s view in November that the risk in mortgage insurance should be shared more with the private sector. Read the full story.

 

Protect Yourself from Title Fraud

Few of us would risk not having insurance against damage to our property or its contents but there is another policy that is increasingly important. Title insurance protects home owners from fraudsters who obtain a bogus title deed and use it to obtain mortgage funds from a lender. When the lender doesn’t receive mortgage payments they begin steps to recover the debt and often the genuine homeowner’s first knowledge of the fraud is a notice that their home is about to be sold! Although lenders will usually insist on title insurance to protect themselves from real estate fraud, homeowners can have their own policy. Read the full story.

 

Affordability City by City

Following the recent report from RBC highlighting the issues of affordability of homes across Canada, how does the information translate into required income to cover costs? In Vancouver, buyers would need $162,900 to qualify for a mortgage for a standard two storey house, while in Ottawa the figure is a more modest $93,500. Read the full story.

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