All tagged Mortgages
Many home buyers have heard that you can withdraw (or borrow) money from your Registered Retirement Savings Plan (RRSP) to use toward their down payment without paying taxes. While this is true there are conditions. It's not really a withdrawal because you have to repay it over a fixed period of time. This strategy falls under what Canada Revenue Agency (CRA) calls the Home Buyers Plan (HBP).
There have been some updates to interest rate forecasts since our last review of rates in December. The overall trend is upward but there are differing opinions on how high rates will rise.
A mortgage regulatory change that hasn’t been talked about much in the media but it will likely impact Toronto, Vancouver, Victoria, and Hamilton, especially if condo prices continue to climb. It asks lenders to loan less in markets with high property value risk.
The new mortgage stress test which came into effect January 1st makes it more difficult for Canadians to qualify for a mortgage, and the combination of rising rates and the new stress tests could force home buyers to come up with significantly higher down payments than 2017.
You will need to qualify for a 6.25% 5-year fixed mortgage by the end of 2019. The actual rate is forecast to be 4.25% but federal rules require lender apply a 2% stress test.
Impact of new mortgage rules on home buyers.
Impact of new mortgage rules on mortgage renewals.
A conservative forecast by CMHC in October predicted Montreal real estate prices would continue to rise at a healthy rate of 4% annually. If Montreal homes catch the attention of speculators and foreign investors then that growth rate could quickly hit 8%.
