Breaking News: Changes to Mortgage Lending Guidelines

General Angela Calla 21 Jun

The Federal Government has announced four new clamp downs on mortgage financing effective Monday, July 9th, 2012.

These changes include:

  • Reducing the maximum amortization period to 25 years from 30 years
  • Reducing the maximum amount of equity homeowners can take out of their homes when refinancing to 80% from the current 85%
  • Limiting the availability of government-backed mortgages to homes with a purchase price of less than $1 million
  • Fixing the maximum gross debt service ratio at 39% and the maximum total debt service ratio at 44%

Where we are coming from: In 2008 the Government allowed up to 100% financing at 40 year amortizations. If we compare a $300,000 mortgage at 5.79% for 40 years in 2008, the minimum monthly payment required was $1,592.72.

Under the new rules announced today, a $300,000 mortgage for 25 years at a 3.09% five-year fixed rate, the minimum monthly payment required will be $1,433.63.

The difference comparing where we came from to where we will stand after the new rules? Your monthly payment is reduced by $159.09 and you’re mortgage-free 15 years sooner!

Is there a big difference between the 30-year vs 25? No, the difference is only $52.48 per $100,000 in mortgage debt. As seen in the above example, it actually places Canadians in a better financial position.

These changes will only affect insured mortgages. So if you have greater than a 20% down payment or equity built up in your home, we may see these options around a bit longer. But, until July 9th, you can still get a 30-year mortgage even if you have an insured mortgage.

As for the refinance limit, this shows us the federal Government wants to ensure prudence to reduce spending and be certain people are not refinancing all the equity out of their homes.

What you should do with this information? Move quickly to review your options with the Angela Calla Mortgage Team to ensure you have the best options and strategies available at all times especially if you have a pre approval or renewal in the upcoming years. You can always count on your AMP when the market changes to advise you on your best options!

 Angela Calla, AMP
Dominion Lending Centres-Angela Calla
Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980
Phone : 604-802-3983 Fax: 604-939-8795

New Lending Guidelines expected late June early July

General Angela Calla 15 Jun

With new lending changes expected in the weeks to come, it’s best to review your purchase, renewal or refinance options sooner rather than later (in the next two weeks) – especially if you want to ensure your debt and retirement plan is in order and you’re able to optimize your equity with the best possible strategy. We can be reached directly at or 604-802-3983.

The Office of the Superintendent of Financial Institutions (OSFI) sent ripples through the industry March 19th, releasing “draft recommendations” for all federally regulated banks to follow.

We have now learned that OSFI intends on getting these guidelines finalized by the end of June or early July. While implementation may be immediate, it’s most likely within a month or two of the official announcement. Bank CEOs have been informed of these timeframes and are beginning to prepare for what could be a large shift in the way the big banks underwrite mortgages. Here are the highlights from the guidelines:

. Home Equity Line of Credit mortgages reduced from 80% to 65% financing.

. Lines of credit to be either amortized, or amortized after a specified period of time (no more never-never plans).

. More stringent income requirements for self-employed borrowers.

. All mortgages to be reviewed upon renewal (currently as long as payments are made, it’s unlikely for a bank not to offer you a renewal).

. Funds from cash-back mortgages are not allowed as a source of down payment (currently only a handful of lenders allow this, but it does mean that “zero down” mortgages are technically available, but with some restrictions).

. Use of the five-year posted “benchmark” to qualify uninsured terms of one to four years and all variable terms (currently most lenders use a three-year posted or a lower rate to qualify uninsured mortgage).

. More limits on underwriting exceptions (many recent applications don’t fit the ever shrinking “boxes” with the banks, which means fewer common-sense deals will get approved).

. Home insurance to be included in debt-servicing ratios (it’s currently not included).

. More public disclosure of statistics pertaining to institutions’ mortgage practices.

. More accountability from management to ensure lenders are adhering to their underwriting guidelines.

Since announcing the proposed guidelines, OSFI has reviewed comments from the industry and is changing its opinion on a few items. First, it’s becoming more likely that 65% financing on lines of credit is a done deal, although officials are probably scrapping the idea of a forced amortization on these credit lines. But the most important comments from OSFI’s review of the feedback has been that its likely to withdrawal the requirement to re-qualify at renewal, which has given many in the industry a sigh of relief.

Although many of these above guidelines sound reasonable, having all of these changes come into effect at the same time could have a negative impact on housing markets short term. Potential purchasers may find it more difficult to obtain financing, and investors may find it harder to leverage existing assets to acquire additional properties.

Many in the industry feel that these changes are the government’s way of slowing down accumulation of secured debt and the housing market without raising interest rates.

The Bank of Canada announced June 5th that there would be no change in the prime rate, and the consensus is no further changes until early 2013. This decision pointed to ongoing concerns with the European (and, therefore, worldwide) markets, as well as a relatively strong Canadian dollar and inflation levels at comfortable levels. Until the Euro is more stable, money will continue flooding from European markets to North American markets, keeping interest rates low for borrowers.

For borrowers, this presents a double-edged sword. No longer should you be worrying about getting the best rate on your mortgage (many lenders are currently offering 3.09% on five-year fixed rates), but you should be more concerned about getting the money at all. If you’re planning on making a purchase this year, the window (especially for investors) may be closing soon.

What’s interesting is that these rules are going to be affecting all federally regulated institutions, so we may find that credit unions may be able to offer niche products (like lines of credit above 65%) that major banks won’t be able to offer.

Credit unions will often follow federal guidelines, but may feel that their risk to lend to high-quality clients may not be as severe as OSFI feels and continue operating on their current guidelines.

Courtesy of

Questions? The Angela Calla Mortgage Team is here to help. Tune into The Mortgage Show Saturdays @ 7pm on CKNW

Angela Calla, AMP

Dominion Lending Centres 604-802-3983

3 reasons you need an equity line of credit after your mortgage is paid off

General Angela Calla 13 Jun

One thing we can count on in the mortgage industry is change. In learning how to optimize the market to your advantage, it may be wise to get a line of credit today to protect you from having to sell your house before you’re ready. Canada’s banking regulator has stepped in with changes that may take some of the edge off the central bank’s worries about household debt. The Office of the Superintendent of Financial Institutions (OSFI) plans to cut the amount of debt available through home equity lines of credit (HELCOs). The current limit of 80% of value will be chopped to 65%.

The following three points outline why it may be important to apply for a secured home equity line of credit today:

1. Changes are coming for secured lines of credit that will reduce consumers’ qualifications by 30%. Much like we have for insured mortgages where people have to qualify at much higher rates, the last thing you want is not to be able to access your own home equity if you have worked diligently to pay off your mortgage.

2. You deserve to not overpay to access your equity and be forced to downsize (while the reverse mortgage option is viable for some, it’s not always the best solution).

3. People are living longer and are being forced back into the workplace longer. Not everyone can count on the pensions or stock equity we may have had at one point. It’s time to get your asset working for you. Don’t forget that if equity is used for an income-generating investment, you can also take advantage of the tax benefit for the interest paid.

Setting yourself up for success is usually the result of what you know. With these upcoming changes, this little bit of knowledge can go a long way when your planning matters most. I will offer unbiased help and assist you in putting together the best plan to use your equity to your advantage!

Angela Calla, AMP

Dominion Lending Centres-Angela Calla

Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980

Phone: 604-802-3983 Email:


When will the VRM be a good option again-Angela Calla

General Angela Calla 12 Jun

The best options when it comes to selecting the right mortgage term will always be different, and can change several times throughout your term. The Angela Calla Mortgage Team will always keep you informed of your very best options in real time.

Historically, 88% of the time, the variable-rate mortgage (VRM) has helped borrowers get ahead significantly. But today may be part of the 12% of the time when fixed rates are the way to go. Here’s why:

  1. 1.       Cost of Security – the payment difference on a $300,000 mortgage. The payment for VRM is $1,246 and fixed is $1,309. The difference of $63 a month is a low cost of security for 5 years to ensure your payment does not increase.
  2. 2.       Risk of inflation – if you follow the Bank of Canada (BOC), it suggests that one or two rate hikes towards the end of this year would be suitable. If the BOC carried through on its suggestions, this would mean your VRM payment would be higher than the fixed rate you could get today.
  3. 3.       Today’s low rates will be history – once rates rise, although you can lock in with most variables at no cost, you lock in at the fixed rates at that time, not the rate you could have gotten initially. Rates have nowhere to go but up.

When will a VRM be attractive again? Not until prime rises! When rates go up, generally the discounts also increase. The rule of thumb is the best time to consider a VRM is when you can secure a discount below prime at 0.40 or more. Some exceptions will always apply. The Angela Calla Mortgage Team is always here to help without bias as we are with you throughout the life of your mortgage.

If you would like us to review your options, sign up here www.angelacalla,ca/contact

Angela Calla Mortgage Team


Own in Vancouver for $30 a day as heard on @angelacalla @cknw from @willingtwo

General Angela Calla 12 Jun

As heard on this weeks Mortgage Show on CKNW with Angela Calla Saturday June 16th 2012. To get pre approved for this property or any other purchase email us at or call 604-802-3983

This weeks deal of the week has been brought to you by:

Robert Boies
Royal LePage Coronation West
cell: 604 341 3009 t: willingtwo

Please note that properties like this move quickly and getting set up with Rob Boies directly will keep you abreast of all of these types of oppertunities meeting your speciafications

Thanks for visiting

Angela Calla, AMP

3 Questions: If you should add outside debt to your mortgage by Angela Calla

General Angela Calla 11 Jun

With the demands of our everyday lives, it’s really easy for our credit cards and lines of credit to get out of hand.

What we thought we would use “once in a while” or “just until the next paycheque” can sometimes turn into a growing battle. If this sounds familiar, you’re not alone. Statistics say that as many as 6 out of 10 Canadians live paycheque to paycheque. Before you know it, you could be right at your credit card and credit line limits. The shocker comes when you take a closer look at one of your credit card statements and see that it can take decades to pay off! And in today’s tight credit environment, it’s best not to wait until your mortgage renewal to consolidate this high interest debt. The good news is if you have equity in your home, you can kiss that credit card or line of credit commitment goodbye.

Ask yourself these 3 questions to see if it’s worth it to add your outside debts to your mortgage and stop the cycle of debt if your payments outside of your mortgage are at least $300 per month. In the next 3 months are you receiving:

1.       The proceeds from the sale of an asset (car, trailer, artwork, etc)?

2.       A guaranteed work bonus or money you lent someone returned to you

3.       An inheritance

If your answer is no to these 3 questions, then it’s better to stop the cycle by rolling this debt into your mortgage (if you have enough equity in your home). Using the $300 a month example (which is usually a $10,000 debt), by refinancing your mortgage, you’ll save $250 a month you can bank so as a cushion in the event another sudden expense comes up, instead of charging it! 

Angela Calla, AMP
Mortgage Expert
Host of “The Mortgage Show” on CKNW AM980 Saturdays at 7pm

Phone: 604-802-3983
Fax: 604-939-8795

Facebook: Angela Calla Team, AMP Your Mortgage Expert
Toll Free: 1-888-806-8080
Apply Online:
CLICK HERE to Watch My Video Presentation


Highlights of CMHC Home Reno Report 2012

General Angela Calla 7 Jun

Earlier today, CMHC released the 2012 edition of the “Renovation and Home Purchase Report”.  The report provides insight into consumer home buying and home renovation intentions in 2012 and trends from 2011.  

This year, the report highlights that:

An estimated 1.7 million households in 10 major centres undertook renovations in 2011. This represents about 37 per cent of homeowner households, a slight decrease from 42 per cent, or 1.9 million households, in 2010.

Almost $21 billion was spent on renovations in 2011 across the 10 major centres surveyed, a decrease from 22.8 billion in 2010.  The estimated average cost of renovations undertaken in 2011 was $13,709, an increase from $12,972 in 2010.

As well, when Canadian homeowners were asked about their renovation plans for this year, 38 per cent indicated that they intend to spend $1,000 or more by the end of 2012. Renovation intentions for 2012 are similar to the 2011 results.

Renovation intentions for 2012 are strongest in St. John’s, where 48 per cent of consumers indicated they plan to undertake renovations costing $1,000 or more. This is followed by Winnipeg (44 per cent) and Halifax, Ottawa and Edmonton (42 per cent each). The proportion of potential renovators is lowest in Vancouver (34 per cent), Montréal (37 per cent) and Toronto and Calgary (both at 38 per cent).

Overall, the share of households that intend to buy a primary residence in 2012 is five per cent. Home buying intentions are strongest in Edmonton (7 per cent), Québec and Calgary (both at 6 per cent) and St. John’s and Montréal (5 per cent each). Purchase intentions in all other surveyed centres are at four per cent.

To view the full report, simply visit and click on the “Market Insight” section.

As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

If you are considering a home renovation over 10k, call the Angela Calla Mortgage Team first to ensure your finances are in order 604-802-3983

Canadians are far better off than many of the planets riches countries!

General Angela Calla 5 Jun

 By any measure – health, education, housing or income – Canadians are far better off than residents of the developing world. But they’re also better off than many of the planet’s richest countries, according to the Organization for Economic Co-operation and Development’s latest quality-of-life assessment, released last month. In a comparison of 11 wellbeing indicators in 36 countries, Canada placed sixth, behind top-ranking Australia and third-place US. Norway, Sweden and Denmark also finished ahead of Canada. Click here for the full Globe and Mail article.

Angela Calla, AMP

Dominion Lending Centres-Angela Calla


Considerations if you are planning a home renovation

General Angela Calla 5 Jun

Everyone has a different reason for wanting to renovate their home. You may be looking to make a change in the way your home looks or feels, or you may want to fix a maintenance issue or make your home more comfortable or energy efficient. Whatever your reason, undertaking a renovation involves a number of important decisions.

To help you make more informed decisions, Canada Mortgage and Housing Corporation (CMHC) offers a number of tips, tools and resources like the Before you Renovate: Renovation Guide. Consulting these resources before you begin can help you save time, money and a lot of frustration – resulting in a better overall renovation experience.

First, always take the time to thoroughly plan your renovation before you pick up a hammer (or the phone). Mistakes on paper are much easier and less expensive to fix than mistakes on the job. Taking the time upfront to identify your priorities and how you want to achieve them can save you a great deal of expense (and more than a few headaches) further down the road.

Next, decide whether your planned renovation is practical. For instance, that addition may look great, but can your home’s systems handle the additional heating, lighting and plumbing


requirements? Learn to draw the line between what would be nice and what’s really essential, and consider hiring a qualified professional early in the process to help guide you toward what’s practical for your home.

It’s also a good idea to think about the long-term impact of your renovations. For example, renovations that make your home more energy efficient could pay for themselves through years of lower monthly utility bills. In addition, think about your family’s future needs by making sure your design is flexible enough to adapt to changes as time goes by.

To avoid going over budget, have a clear idea in advance of how much your renovation will cost. CMHC’s Household Budget Calculator is designed to help you understand what you can afford. Get written estimates from at least two reputable local renovators, architectural firms or materials suppliers and, if they ask for a deposit, make sure it’s a nominal amount and request a signed receipt.

If you need help financing your renovation project, it may be beneficial to refinance your mortgage at today’s great low rates! And if the renovation will make your home more energy efficient you may even qualify for financial assistance. Answers to your questions are just a phone call or email away!

Angela Calla, AMP

Dominion Lending Centres-Angela Calla


Confidence in the Mortgage Market

General Angela Calla 5 Jun

Canadian homeowners are comfortable with their current mortgage, focusing on reducing their mortgage faster by making lump sum payments, reducing amortization periods and refinancing with lower interest rates, according to the Canadian Association of Accredited Mortgage Professional’s (CAAMP) most recent survey report released May 30th – Confidence in the Canadian Mortgage Market.

Following are just a few key highlights from the report:

  • 74% of mortgage borrowers who renewed in the last year saw their new interest rate decrease. On average, the interest rate was reduced by one-half percentage point
  • Borrowers are making significant efforts to accelerate mortgage repayment, such as voluntarily increasing their regular payments (23%) and making lump sum payments (19%), with some borrowers (10%) doing both


  • Approximately 50% of borrowers pay $100 per month (or more) above their required payments
  • Recent buyers indicate that their expected amortization period will be about 20% shorter than their contracted length
  • Mortgage brokers account for 26% of all mortgages. For borrowers who took out a new mortgage in 2011, 31% obtained it from a mortgage broker
  • 83% of Canadians have at least 25% equity in their home
  • “Despite daily warnings in the media about mortgage indebtedness – or maybe because of them – Canadians are making responsible decisions about their mortgages and they’re exhibiting confidence in their own situations,” said Jim Murphy, AMP, President and CEO of CAAMP. “We should feel encouraged by this behaviour – it means Canadians are well positioned to weather a potential rise in interest rates”

As always, if you have any mortgage-related questions, I’m here to help!

Angela Calla, AMP

Dominion Lending Centres-Angela Calla