Laking Financial

The Bank of Canada announced today that it is maintaining the benchmark rate, noting that our recovery is better than anticipated but that economic slack and uncertainty remain, particularly given the rise of more transmissible variants of COVID-19. The Bank has determined that the recovery continues to require extraordinary monetary policy support, and they will continue with quantitative easy until the recover is well underway.

The Bank did not comment on when they believe the economy will have recovered enough to raise rates.

The next rate-setting day is April 21st, 2021.

With rates still extremely low, this is a great time to get in touch for a review of your mortgage strategy. It's important to get advice and a professional assessment of your situation if you want to switch your mortgage for a lower rate, need a new mortgage, are renewing, or looking to refinance for debt consolidation, renovations or other large expenditures.

The Bank of Canada announced today that it is keeping the overnight rate steady at 0.25%. It is expected the Bank will keep this target unchanged until well into 2023 to aid our economic recovery. The Canadian economy is in recession with negative GDP growth, inflation is at zero, the Canadian dollar relative to the U.S. is stable at around $.76, oil prices are hovering around $40 - $43 U.S./barrel and unemployment is currently at 9%, another marked improvement from last month.

According to StatsCan and CMHC, 75% of the almost $200 Billion of mortgages that were deferred were from Canadians that are still working and took the deferral as a precautionary measure. This would support the argument that the massive wave of defaults on mortgages previously expected is likely to be avoided this winter. In addition, unemployment has been forecasted to rebound to 7.5% by the end of 2021.

Cam Strong, CEO of Invis Mortgage Intelligence stated “Most economists agree personal debt levels will likely worsen in 2021 and the hospitality sector will face record bankruptcies or closures. However, record low mortgage rates should continue to support our housing industry along with an improving employment outcome in 2021.”

Canadians have record high mortgage and consumer credit debt of $2.5 trillion according to Statistics Canada as of September, 2020 however, thanks to the Bank of Canada, the servicing costs on this debt is very low.

The next rate-setting day is Wednesday, December 9th.

With this stable, low interest environment it’s never been a better time for qualifying homeowners to refinance to consolidate debt to improve cash flow, save interest costs and protect their credit scores. Always get advice and a personal assessment of your situation if you need a new mortgage or want to change your current mortgage strategy.

Even though CMHC recently announced more strict criteria to be approved for insured mortgage financing their competitors Genworth and Canada Guarantee are not following suit. So for anyone who this would have impacted there is no need to worry!

Genworth and Canada Guaranty Won't Adopt CMHC's New Mortgage Rules - Mortgage Rates & Mortgage Broker News in Canada Following the announcement of CMHC's new mortgage rules last week, Genworth Canada and Canada Guaranty confirmed they will not be following CMHC's lead.

Breaking News: CMHC (Canada’s largest mortgage insurer) just announced tougher mortgage qualifying rules that will be effective July 1st for any new applications. They are also forecasting that due to the impacts of COVID-19 that the average home price in Canada will fall between 9-18% over the next 12 months.

The new rules include tighter GDS/TDS Guidelines which ultimately impacts the amount of monthly income that can go towards housing costs and total debt servicing.

Increase in minimum credit score so you’ll need to have stronger credit.

Please feel free to reach out if you have any questions

CMHC Reviews Underwriting Criteria Protecting the economic futures of Canadians: CMHC reviews underwriting criteria