This morning, Federal Finance Minister Jim Flaherty announced changes to mortgage insurance rules intended to ensure the stability of Canada's housing market.
These measures include:
Amortization period capped at 30 years
Reduction of government backing for home equity lines of credit
Maximum refinancing reduced to 85% from 90% LTV
The biggest impact will come from the amortization change as this will reduce the amount of mortgage purchasers will qualify for.
For example $300,000...
Finance Minister Jim Flaherty said he’s considering taking measures to make it harder to obtain a mortgage to avoid households taking on excessive debt.
In an interview with CTV, to be aired this week, Flaherty said he’s watching the booming property market closely.
“If we see further evidence that there is excessive demand in the housing market or that there's an indication that people are taking on obligations that they will not be able to handle in the future when interest rates...
STARTER CONDO VERSUS HOUSE
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Vancouver Sun, Jan. 12 '11 "I've had a lot of clients who've started out with a condo in downtown Toronto," says Paula Roberts, a mortgage broker for Mortgage Intelligence in Unionville. "It's a good starter home to build equity." But Ms. Roberts says the monthly outlay on a $300,000 condo, including fees and taxes is currently similar to the payments on a $375,000 mortgage for a house. "The $300,000 mark is going to afford you a large bachelor or a small one-bedroom with a den inside the city centre," says Andrew Bodnar, sales representative with Re/ Max Condos Plus brokerage in Toronto. "For a home, for $375,000, I would think that you're at least 45 minutes to an hour outside of the city." The similarities pretty much end at the basic monthly payments. "With the condo you don't have the maintenance for the exterior of the building, but you have condo fees. On the flip side, in a house you're not paying the condo fees, but you're entirely responsible for the condition of not only the interior but the exterior of the home as well," Mr. Bodnar says. "A lot of time the price, the payments, could be the same but when you break it down, condo versus home ownership, the biggest difference is going to be lifestyle." Ms. Roberts agrees that lifestyle is key. "It's like a puzzle. We just have to put the best options for that client together because everybody is a little different," Ms. Roberts says. "That's a key component whenever I work with first-time buyers, considering where they work, where their family lives, the places they'll be travelling to frequently. That can have a direct correlation to the affordability of the property they're looking for," Mr. Bodnar says. "If you have to pick up the expenses for a vehicle, vehicle maintenance, gas, travel, that suddenly takes all the savings you thought you had by living out of town versus living in town." Mr. Bodnar adds that clients opting for a condo are more likely to find a place in their chosen neighbourhood. "One city block in Toronto may contain condo buildings with an excess of 500 units," Mr. Bodnar says. "Looking for that type of selection in freehold homes could take them outside their preferred living area." Ms. Roberts and Mr. Bodnar urge clients to try to look ahead. "You need to know -- or anticipate -- where you're going to be in five years. The rates are great for five years, but in five years' time, you certainly want to still be able to afford that house," Ms. Roberts says. For many of her clients, she says the hope is that in five years their equity, and hopefully their income, will have risen. "For a lot of our clients, the first home is always a little stepping stone," Ms. Roberts says. "They're not going to be in that 700-square-foot condo or that smaller property for 35 years." |
More people wanted to buy houses than there were people willing to sell them in Vancouver during 2010, which had a big influence on the rising value of property assessments.
Vancouver homeowners saw their property assessments from BC Assessment rise by 12.17 per cent on average,...