8 Oct

Big Changes for ALL Mortgage Holders: More Competition & Better Savings!

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Posted by: Adam Sale

Big Changes for ALL Mortgage Holders:

More Competition & Better Savings!

Last week Canada’s Banking regulator (OSFI) announced they will be removing the stress-test on ALL mortgage renewals as of November 21, 2024.

The stress-test has been the main culprit in hand-cuffing many mortgage holders to their current lender.

The old rules require anyone switching mortgage lenders to requalify for their mortgage amount using the stress-test rate. The stress-test rate is the Mortgage Rate + 2%.

Over the last 2-years, many borrowers were unable to switch lenders because they were unable to income qualify for their current mortgage amount. The mortgage rate was too high, and the added 2% stress-test made it virtually impossible.

Borrowers in these circumstance were forced to accept whatever rate their lender provided them at renewal. Often times these rates were MUCH higher than the current market rates.

Unfortunately, this rule should’ve changed 2-years ago when interest rates were steadily rising.

The changes to this policy is an excellent step forward as it forces the banks to remain competitive with their renewal rates if they want to keep their mortgage portfolio.

For those of you who have a mortgage in the 6% range, there may be an opportunity to switch your mortgage to a lower rate.

If you would like to see if this opportunity exists, please send me an email (adam@salemortgages.ca) with the following details so I can do a quick health-check:

  • Mortgage Balance: ($430,000)
  • Renewal Date: (April 2027)
  • Original Term Length (2yr, 3yr, 4yr, 5yr)
  • Interest Rate: (5.89%)
  • Mortgage Payment: ($1,200 bi-weekly)

Alternatively, I am available to chat at 778-215-4121.

Thank you,

Adam Sale

22 Apr

Receive $40,000 towards Suite Renovations – BC Housing SSIP Program

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Posted by: Adam Sale

BC Housing: Secondary Suite Incentive Program

I wish I noticed this program sooner, but somehow it slipped through the cracks!

Anyways, this seems like a great program for anyone interested in adding a rental suite to their home.

BC Housing is running a pilot program encouraging homeowners to build secondary suites/laneway homes by offering a FORGIVABLE loan of up to 50% of the renovation costs, up to $40,000!

They’ve dedicated $40-million to this pilot program each year for the next 3-yrs (approximately 1,000 homes/yr).

Applications will be approved on a first come, first serve basis until annual funding is used up.

The requirements for this forgivable loan are as follows:

Registered owner(s) of the property

  • Canadian citizens or permanent residents
  • Live in the property as their primary home
  • Combined gross annual income of all homeowners on title of less than $209,420 (in the previous tax year)

Property

Secondary Suite

  • A new legal self-contained unit with a kitchen and full bathroom (improvements to existing rental units are not eligible)
  • Laneway homes/garden suite are eligible
  • Received municipal building permits on or after April 1, 2023

Last, but certainly not least is the Main Requirement

To be considered for this program, the rent charged to your tenant must not exceed the current Rent Affordability Limit for your area, as specified in the table below.

Rental Affordability Limits Table

For more information on this program please check the links below.

If you are interested in this program, now is the time to arrange everything as applications are set to open sometime this spring.

BC Housing Secondary Suite Incentive Program

BC Housing Sign-Up for Updates

12 Oct

Vancouver Market Report – October 2023

Latest News

Posted by: Adam Sale

This is HANDS-DOWN the best Market Report I’ve seen! Clearly explaining:

  • The differences between a Buyers/Balanced/Sellers Market.
  • Current Market Trend
  • Current Pricing and Opportunities

Key Take-aways: 

– The Vancouver market is in a similar position to where we were in November/December last year – this is earlier than I expected!

– The Sales-to-Active listings ratio is the leading indicator of a Buyers/Sellers/Balanced Market – watch the video to learn how this is calculated

– Sales-to-Active listing ratio is trending downwards and moving into Buyers/Balanced market territory – dependent on property type

VANCOUVER MARKET REPORT – OCTOBER 23 – Youtube

Vancouver Market Report - October 23

Vancouver Market Report – October 23

To learn more about the real-estate market – contact Adina @ (778) 881-7115 | https://adinayvr.com

To learn more about your financing options – contact myself @ 778-215-4121 | www.adamsale.ca | Adamjsale@gmail.com

8 Sep

Mortgage Forecast – Big 6 Bank Interest Rate Predictions

Latest News

Posted by: Adam Sale

Interest Rates: Bank Of Canada Unchanged

As I’m sure you’ve heard, the Bank of Canada recently held its latest interest rate meeting, and I’m pleased to inform you that they have decided to keep interest rates steady at 5%.

The Bank is keeping a watchful eye on the following key pieces of data:

  • Unemployment Report: The rate of employment and job market conditions.
  • CPI Report (Consumer Price Index): Tracking inflation to ensure it remains within a target range.
  • Quarterly GDP Statements: The overall economic health and performance of the country.

Even though the Bank of Canada held interest rates steady, the bond market is still pricing in one more rate increase this year. This is why we haven’t seen any noticeable decreases in fixed rates like we had in January 2023.

What Are The Big 6 Banks Predicting?

interest rates from big 6

Notice in the picture many of the Banks are predicting the Bank of Canada to start decreasing interest rates in Q2 of next year.

When there is so much as a hint from the Bank of Canada that rates will decrease, you can expect the Bond Market to react quickly, ultimately causing many fixed-rate mortgage specials.

Based on these predictions, 2024 looks like a busy year!!

Personal Opinion

Over the last 2-years we’ve learned predictions from economist are never a sure thing, and interest rates can swing more than expected.

It certainly seems like we are nearing the top of our rate cycle as the recent jobs report and GDP report was less favorable than expected. However, due to the base effect on how CPI is calculated, it is likely we will see overall inflation increasing until the January report is released in February 2024.

It is also worth noting, even with interest rates at 15-year highs the Vancouver Real Estate Market is extremely resilient. If this is a sign of what is to come, we can expect the Vancouver Market to heat up quickly once we see any sign the Bank of Canada will begin lowering the interest rate.

If you have any financing questions or scenarios you would like to discuss, please contact me directly at 778-215-4121.

Thank you,

Adam Sale

778-215-4121

9 Aug

Why you should get pre-approved before September 6/23

Latest News

Posted by: Adam Sale

Pre-approved Mortgage Before Interest Rates Increase

Are you aware of the current trend in rising interest rates among lenders? It’s a direct response to the anticipated rate hike by the Bank of Canada scheduled for September 6th.

As the real estate market transitions into the fall season, there’s an expectation of a slowdown. This slowdown is attributed to the impending expiration of pre-approvals in September/October.

For potential buyers who have yet to make a purchase, there’s a critical need to reapply for rate holds. However, the new rates will be +1% higher than the rates secured since May. This adjustment could lead to a reduction of purchasing power by approximately $50,000 or more, and an increase of around $300 in monthly payments.

The consequence of this situation could temporarily decrease the overall transaction volume. On the flip side, it presents an advantageous moment for buyers to secure favorable prices on new homes.

If your plans involve property acquisition within the next half-year, I strongly recommend taking the step of obtaining a pre-approval or rate hold. By doing so, you’ll have a safeguard in place in case you come across a property that catches your interest – particularly if the seller is motivated to close the deal.

The imminent increase in the Bank of Canada’s variable rate, expected on September 6th, will likely contribute to further hikes in fixed rates.

Anticipate an influx of one-bedroom and two-bedroom rental properties entering the market throughout the fall. Many investment properties acquired after 2016 are no longer yielding profits and their management costs have become burdensome.

As these property mortgages reach their renewal periods, investors might find themselves lacking the necessary cash flow to accommodate these rate hikes. Consequently, some may opt to liquidate portions of their investment portfolios.

Ready to take action? Complete our Mortgage Application to start the process.

The pre-approval/rate-hold process is streamlined. We require a completed mortgage application to facilitate the communication with lenders. This allows you to secure an interest rate for an extended period of 120 days, up until December 7th.

Here’s what you need to know:

  • If you finalize a property transaction within the 120-day rate-hold period, you’ll secure the rates we’ve held or potentially even better.
  • If your property purchase is set for January, we can utilize the rates available 120 days prior to completion.
  • Should your property search yield no results during this timeframe, the expiring rate hold won’t significantly impact your borrowing prospects. It also provides the opportunity for us to resubmit the rate hold as you continue your search.

Ready to move forward? Begin with our Mortgage Application now.

In case you have inquiries or wish to explore your financing eligibility, feel free to reach out directly at 778-215-4121.

28 Mar

Updates to Foreign Buyer Ban

Latest News

Posted by: Adam Sale

Yesterday (March 27, 2023), the Government of Canada significantly changed the foreign buyer ban. It is now easier those working in Canada on work permits to purchase a home, and vacant land is now available for purchase by non-Canadian residents.

  • Work Permit holders can now purchase property in Canada if they have not purchased more than 1 residential property, and if they have 183 days or more of validity on their work permits at the time of completing the sale.
    • Please note, the foreign buyers’ tax is still in effect across most of BC
  • Vacant land zoned for residential and mixed use can now be purchased by non-Canadians and used for any purpose by the purchaser, including residential development.
  • This exception allows non-Canadians to purchase residential property for the purpose of development.

For more information, check out this website here: https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2023/amendments-prohibition-purchase-residential-property-non-canadians-regulations

If you have any questions, or would like assistance with arranging the best mortgage product available, please contact me by phone or email.

☎️ Cell: 778-215-4121

📬 Email: adamsale@dominionlending.ca

Thank you for your consideration,

Adam Sale

16 May

How to Spot the Opportunity in Vancouver’s Real Estate – May 2022

Latest News

Posted by: Adam Sale

How to Spot the Opportunity in Vancouver’s Changing Real Estate Market – May 2022

The real estate market is changing, in this video I’ll explain how the average buyer will miss the bottom of the market because they will be focused on the wrong data. I also share some tips on how your buyers can capitalize on this period of uncertainty.

Summary:

30 Mar

Vancouver Market Outlook for 2022

Latest News

Posted by: Adam Sale

I believe we are at the beginning of a shift in the Vancouver housing market. I’d like to provide you with an update with what we’re noticing in the Mortgage market and how this will likely affect Vancouver housing market.

  • Since September 2021 Canada’s 5-yr bond yields have increased from 1.59% to 2.28%. This has increased the 5-yr fixed mortgage from Septembers lows of 2.09% to 3.89%! (Yes, the banks are making a killing right now on the spread). In the last month alone we’ve seen the 5-yr fixed increase by 0.75%.
  • The rates are finally at a level now where our stress-test rules will effect how much someone qualifies for. The stress-test rule dictates the borrower must qualify for a mortgage at either 5.25%, or the Mortgage Rate + 2%, whichever is greater. Qualifying someone at 5.89% will decrease their purchasing power, and this will likely trickle down into the house prices.

Personal Opinion: As people’s pre-approvals expire in April-May they will need to re-qualify using a higher stress-test rate, and will end up qualifying for less than expected. This will likely soften housing prices in Vancouver.

  • I believe we will see the greatest affects in prices over 1-million, since the changes the interest rates have the most affect on the larger loan sizes, and because these homes require a down-payment of at least 20%.
  • I anticipate the condo market (under-1 million) will remain strong due to excessive housing demand, but it is likely we will begin seeing properties selling at their asking price with a  full list of subjects. 
  • RBC put this out a couple of weeks ago: https://thoughtleadership.rbc.com/a-turning-point-more-sellers-enter-canadas-housing-market-in-february/
  • Signing up for a 5-year fixed mortgage is a risk, we are seeing some of the highest interest rates in over 15 years! Is this just a short-term spike or are these excessive rates here to stay? Since markets tend to operate in waves, I am leaning towards these rates will be here for the next 18-24 months, similar to how long our ultra low-rates lasted for.  The 2-yr and 3-yr fixed rates are priced significantly lower than the 5-yr fixed. 
27 Oct

How will Bank of Canada’s recent development affect you? 

Latest News

Posted by: Adam Sale

How will Bank of Canada’s recent development affect you?

The Bank of Canada announced they are no longer printing money to purchase the Government of Canada’s bonds, but what does this mean for the consumer, and where are mortgage rates going in the near term?

Ending the bond buying program is the initial step required before the Bank of Canada increases their target interest rate. The bond buying program provided the Canadian Government with the necessary funds to weather the Covid storm, but it also kept fixed & variable mortgage rates at all-time lows.

Following the Bank of Canada’s announcement today, all the Government of Canada’s bond yields increased significantly, especially the 2-year & 3-year bonds which saw increases of 24% & 17%.

Outlook

In the short-term (1 – 6 months): We will continue to see increases in the fixed interest rates, as well as decreases in the discount on the variable interest rate. The current discount on variable interest rates is Prime minus 1.00%

In the longer-term (6 month – 1-year): The Bank of Canada has accelerated their timeline to increase their target interest rates as early as April 2022. An increase to the target interest rate will directly increase the Banks’ Prime Lending rate, which is the cornerstone of all variable interest rate products (variable mortgages, credit cards & lines of credit). The current prime interest rate is 2.45%, down from pre-pandemic levels of 3.95%.

Prediction – Vancouver’s Real Estate Market: It is unlikely we will see a downturn in prices, but we could see a drop in the rate that these house prices are increasing. Vancouver continues to suffer from lack of housing supply which continues to put upward pressure on housing prices.

Increases to mortgage interest rates will not decrease buyers’ purchasing power because buyers are already qualifying for mortgages at the Stress-Test interest rate of 5.25%.

For more information on this topic, or mortgage inquiries please contact me at adamjsale@gmail.com or by phone at 778-215-4121.

Best,

Adam Sale Mortgages
8 Sep

Interest Rate Update: September 8, 2021

Latest News

Posted by: Adam Sale

Interest Rate Update

Bank of Canada announced today they will maintain the overnight interest rate at 0.25%.

This interest rate directly effects the Prime interest rate charged by lenders on Variable interest rate mortgages.

In addition to maintaining the overnight lending rate, the Bank of Canada will continue their Quantitative Easing program of purchasing $2bn worth of Government of Canada bonds per week.

This bond purchasing program is keeping the interest rates on the bonds suppressed which is producing ultra-low fixed mortgage interest rates.

 Bond Rates at end of day September 8:

Interpreting the chart:

Canada 2-yr: The low 2-yr bond rate means the discount received on Variable Interest mortgages will continue to stay around Prime – 1% on Conventional Mortgages & will be around prime – 1.15% on Insured Mortgages

Canada 3-Yr to Canada 5-Yr: Banks will continue to heavily market their 5-year fixed mortgage rates, but consumers will find cheaper mortgage rates in the 2, 3, & 4-year fixed mortgage durations. Borrowers should determine what their 5-year plan is before taking a 5-year fixed mortgage.

Canada 7-Yr & 10-Yr: Although the difference between the 5-yr and the 7-yr bonds are negligible, the difference in the mortgage rate is roughly a full percentage point at 2.94% & 3.30%. Borrowers should be aware of the high penalties involved with breaking a mortgage of this duration.

The next interest rate update is October 27, 2021.