Bank of Canada

Up in the air

Gerald Vander Pyl Leave a comment

Impact of new mortgage rules on Calgary housing market remains uncertain entering 2018

A new Canada-wide stress test for people applying for uninsured mortgages is leading to uncertainty among experts about the possible effects on the Calgary real estate market in 2018.

The federal government’s new B-20 guidelines, introduced on Jan. 1, set out a new minimum qualifying rate or “stress test” for mortgages. Borrowers must qualify using the five-year benchmark rate published by the Bank of Canada, or the contractual mortgage rate plus two per cent – whichever is greater.

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Don’t delay, start saving

Natalie Noble Leave a comment

Putting together your first down payment is all about planning and prioritizing

With changes to mortgage regulations and the Bank of Canada’s qualifying rates, buying a first home might be tougher than expected, especially for those already carrying a large amount of debt. Currently, the total cost of a mortgage payment, property tax and utilities must be less than 40 per cent of a borrower’s gross income.

“The debt ratio makes a big difference to your purchasing power when buying a home,” said Calgary mortgage broker Monika Hägele. “Some people might work really hard, save up five per cent towards their desired home, and then that amount might not even be enough if they are carrying too much debt.”

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5 things about the Bank of Canada’s overnight rate

crebnow Leave a comment

By the numbers

Canada’s central bank carries out monetary policy by influencing short-term interest rates. It does this by raising and lowering the target for the overnight rate, which is the interest rate at which major financial institutions borrow and lend one-day (or “overnight”) funds among themselves. Not surprisingly, the overnight rate has a strong impact on the rates Canadians get from their lending institutions when they save or borrow money.

To help the average Canadian get a better grasp on the overnight lending rate, CREB®Now presents some of the key numbers.

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5 things about CED’s 2016 economic outlook

Cody Stuart Leave a comment

Speaking as part of Calgary Economic Development’s (CED) 2016 Economic Outlook, Bank of Canada governor Stephen S. Poloz laid out his forecast for Canada’s economy in the upcoming year.
With more than 1,500 on hand for the presentation, Poloz touched on some of the factors that have seen Canada’s economy get off to a less-than-stellar start this year.
CREB®Now takes a look at some of the key points from CED’s outlook.

GDP
Having seen two consecutive quarters of GDP decline, Canada’s economy currently fits the definition of being in a recession. Looking forward, TD forecasts call for an annual growth rate of
1.2 per cent in 2015, followed by two per cent gains in 2016 and 2017.

Employment
Speaking on downsizings in Calgary’s energy sector, CED president and chief executive Mary Moran said more layoffs should be expected, calling it the most challenging time for the city since the mid-1980s. ATB economist Todd Hirsch has predicted unemployment rate in the province could reach 7.5 per cent, which would be the highest rate seen since 2009.

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Looking beyond variable mortgages

crebnow Leave a comment

Short-term fixed re-emerging as alternative

nolanVariable rates are back in fashion after the Bank of Canada lowered the overnight  lending rate in January, and economists expect another decrease in the near future.

Yet, even though variable rates make sense, most borrowers are still leaning toward fixed-rate mortgages for no reason other than certainty. Consumers like to know what their mortgage rate is going to be.

The good news is there are options for risk-averse borrowers who don’t want to dive into the variable-rate waters, but still want the low rates that come with the floating products. (more…)

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