In a press conference following yesterday’s interest rate announcement, Bank of Canada Governor Stephen S. Poloz and Senior Deputy Governor Carolyn A. Wilkins discussed the reasoning behind the rate decision as well as the updated monetary policy report, as well as the effect that a so-called “insurance cut” would have.
Tag: Stress Test
There was a 3.5% rise in Canadian home sales in July compared to June and unadjusted activity was up 12.6% year-over-year.
Canadian mortgage borrowers have been waiting years for this moment.
This week the Bank of Canada’s qualifying rate declined, something that hasn’t happened since 2016.
The rate fell to 5.19 percent from 5.34 percent the previous week.
The benchmark posted 5-year fixed rate, which is used for stress-testing Canadian mortgages, fell yesterday in its first move since May 2018.
The stress tests most mortgage applicants in Canada face are defective — but rather than scrapping them, policymakers should make changes.
At long last the Canadian housing market appears to be shaking off the effects of the mortgage stress test.
The stress test continues to be the focus of much research, with new data released recently on the full extent of its impacts on the housing market.
The stress test is back in the crosshairs of industry analysts.
With Canada’s hottest housing markets cooler and the rock-bottom interest rates that fueled a household debt binge a thing of the past, some may wonder if the federal government’s mortgage stress testing is still needed.
“The bottom line is that the Canadian government needs to find ways to support, even incentivize, homebuyers in Canada (especially first-timers who are facing challenges entering the market) rather than penalize them.”
The housing declines observed nationwide last month might be a disturbing indicator that the current mortgage rules are actually too heavy-handed, according to Ryerson University associate professor Murtaza Haider and real estate industry veteran Stephen Moranis.
For prospective homebuyers, there are several financial hoops to jump through on the way to property ownership: growing a healthy downpayment, securing a preapproval, and finding a home that fits within budget, to name a few.
Young Canadians are facing difficult financial decisions with the cost of living increasing and the cost of becoming a first-time homebuyers unaffordable for many.
2018 could have been the hottest year on record for Canadian home sales (if not for this policy change)
The Canadian housing market had a rough year in 2018: sales dropped by 11 percent while the 4.1 percent decline in average price was the worst performance seen since 1995.
The B-20 mortgage guidelines continue to be cited by Realtors for falling home sales and there have been countless calls for them to be changed or scrapped.
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