Angela Calla on CBC National News – BOC Rate Decrease

General Angela Calla 6 Jun

Angela Calla appeared on CBC National News yesterday to discuss the Bank of Canada’s recent rate decrease and its impact for homeowners and homebuyers.

The 11 minute interview we believe is a must watch for anyone who is up for renewal, or considering a home purchase.

Topics we cover include

  1. Understanding the Rate Decrease
  2. Different Mortgage Types, how they vairy and impact your wealth
  3. Opportunities for Homebuyers
  4. Important Reminder for Renewals

Watch the full interview here by clicking the image below.

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 


 

Bank of Canada Lowers Rates: What It Means for Your Mortgage

General Angela Calla 5 Jun

We are pleased to inform you that today, the Bank of Canada reduced its target for the overnight rate by 25 basis points, bringing it down to 4.75%. This is the first interest rate cut since the tightening cycle began in March 2022.

A Positive Step for Homeowners and Borrowers

Although there will likely be no significant changes to fixed mortgage rates in the short term, this rate reduction is seen as a positive step towards alleviating the financial pressure on mortgage holders, borrowers, and homebuyers across British Columbia. Variable Rate Mortgages and Home Equity Lines of Credit will benefit from this rate drop as the prime lending rate decreases.

“A rate cut is crucial to provide the first steps of relief to mortgage holders and borrowers across the country,” said Angela Calla, President of The Angela Calla Mortgage Team. “We are pleased that the Bank of Canada has begun to ease the financial burden on homeowners and homebuyers.”

Economic Context

The Canadian economy has shown meaningful signs of slowing, with the first-quarter growth rate of 1.7% falling short of the Bank of Canada’s forecast of 2.8% and economists’ estimates of 2.2%, according to Statistics Canada. Inflation has also seen a significant decline. The annual CPI inflation rate peaked at 8.1% in June 2022 but has since fallen to 2.7% in April, comfortably within the Bank’s target range of 1% to 3%.

Due to elevated interest rates, the cost of shelter in British Columbia was up again in April. Homeownership costs increased by 7.2%, and renting costs rose by 7.1%, putting many British Columbians at a tipping point.

Future Rate Cuts

This rate-lowering cycle by the Bank of Canada is unique as it isn’t a response to a global crisis, which has been the norm in recent history. Instead, we can expect a gradual pace of rate cuts, likely around 25 basis points per meeting, over the next 18 months. The goal is to bring the policy rate into the Bank’s estimated neutral range of 2.25-3.25%. Economic conditions will dictate the ultimate rate, with a baseline expectation of 2.75%. However, if the economy performs worse than expected, the rate might drop below 2.25%, while more persistent inflation could halt the cycle above 3.25%.

Impact on Mortgage Rates

The impact of the Bank of Canada’s rate cuts on fixed mortgage rates may not be substantial. Since late 2023, the bond market—and by extension, the mortgage market—has anticipated falling policy rates. This means that the expected rate cuts are likely already reflected in current 5-year fixed mortgage rates.

For variable rates, current market pricing is around prime minus 60 basis points. If this discount persists, it will require seven rate cuts, or 175 basis points, for the average variable rate to fall below the average 5-year fixed rate.

Savings for Homeowners

With the recent rate reduction, homeowners with Variable or Adjustable Rate Mortgages and Home Equity Lines of Credit can expect to save approximately $13 per $100,000 of their mortgage amount. The exact impact will vary depending on your lender product and terms.  You will see most Banks Prime Rate go from 7.20 to 6.95

Questions About Your Mortgage?

Understanding how these changes affect your mortgage can be complex. For a personalized review and to explore your options, reach out to us directly. We’re here to help you navigate these changes and make the best decisions for your financial future.  Reach out to us at angela@countoncalla.ca or 604-802-3983.

Additional Information to Note 

The next scheduled date for announcing the overnight rate target is July 24, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report (MPR) at the same time. For more details, you can read the full Bank of Canada Release.

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

June 2024 Newsletter

General Angela Calla 4 Jun

This month, let’s talk about how mortgage pre-approval versus pre-qualification for those potential buyers out there, PLUS some of the best home features for pets! Scroll down for all the details and have a great month.

Mortgage Pre-Approval vs. Pre-Qualification

Looking to buy your first home?

Thinking about making a move?

Whatever your goals, when it comes to getting a mortgage, there are a few things you can do in advance to make the mortgage process easier!

Getting Pre-Qualified: The purpose of mortgage pre-qualification is to help you get a general idea of what you can afford when shopping for your new home.

Pre-qualification will take your own assessment of your financial status and allow you to come up with a budget for a home, as well as what you can afford for monthly payments.

Download my app today and get pre-qualified in under 60 seconds! Plus, this will help to provide you with an estimate of your monthly mortgage payments and compare various payment schedules.

Getting Pre-Approved: While getting pre-qualified can give you a ballpark estimate of what you can afford, pre-approval means that a lender has stated (in writing) that you do qualify for a mortgage and what amount, based on submitted documentation of your current income and credit history.

A pre-approval usually specifies a term, interest rate, and mortgage amount and is typically valid for a brief period, assuming various conditions are met.

There are a few benefits to pre-approval including:

  1. It confirms the maximum amount you can afford to spend
  2. It can secure you an interest rate for 90-120 while you shop for your new home
  3. It lets the seller know that securing financing should not be an issue. This is extremely important for competitive markets where lots of offers may be coming in.

Keep in mind that once you get your pre-approval, you will want to make sure not to jeopardize it. Until your mortgage application and sale is completed, be sure you don’t quit or change jobs, buy a new car or trade up, transfer large sums of money between bank accounts, leave your bills unpaid, or open up new credit cards. You do not want your financial or employment details to change at all until you have closed on the new mortgage.

Reach out to me to get started today!

Best Home Features for Pets

Creating a pet-friendly home involves considering the comfort, safety, and well-being of your furry friends.

 

Here are some home features to consider:

  • Durable Flooring: Choose scratch-resistant and easy-to-clean flooring like hardwood, laminate, or more durable tile options. Avoid carpets if possible, or choose pet-friendly carpeting that’s stain-resistant.
  • Pet-Friendly Fabrics: Choose furniture and upholstery made from pet-friendly fabrics like leather or microfiber that are durable and easy to clean. This helps in case of accidents or shedding.
  • Pet-Safe Plants: Select indoor plants that are non-toxic to pets, such as spider plants, Boston ferns, or palms. Keep toxic plants out of reach or opt for artificial plants.
  • Designated Pet Areas: Create designated spaces for your pets, such as a cozy corner with a bed or a built-in nook under the stairs. This gives them a sense of security and their own space.
  • Easy Access to Outdoors: Install a pet door or create a pet-friendly exit to the yard, allowing your pets to go outside and play freely.
  • Secure Fencing: Ensure your yard has a secure fence to prevent your pets from wandering off and to keep them safe from potential dangers.
  • Built-in Feeding Stations: Incorporate built-in feeding stations or cabinets to store pet food and supplies, keeping them organized and out of reach from curious pets.
  • Wash Station or Mudroom: Include a designated area near the entrance for cleaning muddy paws or bathing your pets, with easy-to-clean surfaces and storage for grooming supplies.
  • Integrated Pet Technology: Consider installing smart pet feeders, water fountains, or cameras to monitor your pets remotely and ensure they are comfortable and well-fed when you’re away.

By incorporating these features into your home design, you can create a safe, comfortable, and enjoyable environment for both you and your pets.

Economic Insights from Dr. Sherry Cooper

Canadian inflation has fallen considerably for the past four months. Excluding shelter, inflation is a mere 1.6%.

While the job market was relatively strong in April, the unemployment rate continues to rise.

Job growth, though strong, is not keeping up with the surge in working-age immigrants. GDP growth was likely about 2.3% in the first quarter, but per capita GDP is falling. Moreover, economic activity will likely slow to about 1.0% in the current quarter, posting only 1.2% for the year, well below the neutral rate.

 

Monetary policy remains quite restrictive. Homeowners facing more renewals see their monthly payments rise sharply. The housing market has slowed, with new listings surging and buyers waiting for the central bank to cut interest rates. The odds are about even that the Bank of Canada will begin cutting the overnight policy rate in June versus July. It can’t be soon enough for the housing industry.

 

GDP growth is tracking below the Bank of Canada’s most recent forecast. And on a per capita basis, it looks even worse. The weakness in economic activity should persist in the coming months as household and business owners increasingly feel the pinch of earlier rate hikes. Moreover, the federal government’s plan to reduce the temporary resident population over the next two-plus years should hold back the expansion.

 

The Bank of Canada should begin to cut the overnight policy rate in June. If it is delayed, there is a risk of a much steeper slowdown than forecasted.

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

May 2024 Newsletter

General Angela Calla 4 Jun

What to Know at Renewal

Is your mortgage coming up for renewal this year or in 2025?

Do you know about all the incredible options renewing your mortgage can afford you?

If not, I have all the details here on how to make the most of your renewal!

Get a Better Rate: Did you know that when you receive notice that your mortgage is coming up for renewal, it’s the best time to shop around for a more favorable interest rate? At renewal time, it’s easy to explore other lenders for a preferable interest rate without breaking your mortgage. With interest rates expected to start coming down next month, reaching out and exploring the market could potentially save you a significant amount of money!

Consolidate Debt: Renewal time is also an excellent opportunity to assess your existing debt and decide whether consolidating it into your mortgage is beneficial. Whether it’s holiday credit card debt, car loans, education loans, or other debts, consolidating your mortgage streamlines your payments into one, potentially at a lower interest rate compared to other sources.

Invest in Renovations: Do you have home improvement projects waiting to be tackled? Renewal time provides a great opportunity to tap into your home equity for renovations, whether it’s your dream kitchen, bathroom upgrades, or even investing in a vacation property. Utilizing your equity can bring your renovation dreams to life.

Adjust Your Mortgage Product: Not satisfied with your current mortgage product? Whether it’s fluctuations in variable rates or seeking a different payment or amortization schedule, renewal time allows you to switch things up. You can lock in a fixed rate for stability or opt for a variable rate if you anticipate changes in interest rates. Adjusting your mortgage product can align it better with your financial goals.

Summer is coming up and you don’t want to miss your chance to make the most of your yard! To help you enjoy your space this year, I have broken down some of the top yard appeal ideas with the biggest ROI giving you the most bang for your buck and can increase your home’s equity and curb appeal at the same time!

 

Yard Appeal Ideas for The Biggest ROI

Summer is coming up and you don’t want to miss your chance to make the most of your yard! To help you enjoy your space this year, I have broken down some of the top yard appeal ideas with the biggest ROI giving you the most bang for your buck and can increase your home’s equity and curb appeal at the same time!

  • Embrace Sustainable Landscaping: Incorporating native plants, drought-resistant foliage, and xeriscaping techniques not only reduces water consumption but also creates an eco-friendly landscape. Consider installing a rain garden or a drip irrigation system to conserve water and enhance the natural beauty of your yard.
  • Install Outdoor Structures: Adding functional outdoor structures like pergolas, arbors, or gazebos can provide shade, define spaces, and add architectural interest to your yard. These structures can serve as focal points and create inviting outdoor living areas for entertaining or relaxation.
  • Upgrade Your Lawn: A lush, well-maintained lawn instantly elevates the appearance of your yard. Invest in professional lawn care services, aerate and overseed to fill in bare patches, and regularly fertilize and water your lawn to keep it healthy and green. Consider alternatives like artificial turf for low-maintenance options.
  • Incorporate Water Features: Incorporating a water feature such as a fountain, pond, or waterfall adds visual interest, tranquility, and a sense of luxury to your yard. The soothing sound of running water can create a serene ambiance and attract wildlife, enhancing the overall appeal of your outdoor space.
  • Enhance Privacy: Increase the comfort and enjoyment of your yard by enhancing privacy with strategic landscaping, fencing, or screening options. Planting tall hedges, installing lattice panels, or adding trellises with climbing plants can create secluded areas and block unsightly views while adding beauty and greenery to your yard.

By implementing these additional ideas alongside the ones you’ve already outlined, you can transform your yard into a welcoming oasis that not only enhances your enjoyment but also offers a significant return on investment.

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Property Taxes 2024

General Angela Calla 31 May

As we approach the property tax deadline, we want to remind you of the important dates and steps you need to take to ensure your property taxes are paid on time. This is particularly important for those of you who purchased a property earlier this year.

Key Dates to Remember:
Property Tax Due Date: July 2, 2024 (some municipalities – July 3rd) check directly with your lender if you are unsure if they are included in your mortgage payment.
Home Owner Grant Application Deadline: December 31, 2024

Your Responsibility as a Homeowner
If you purchased a property at the beginning of the year, it’s crucial to remember that paying outstanding property taxes is your responsibility. Failure to pay your property taxes by the due date will result in penalties and interest charges. Ensure you deduct any eligible Home Owner Grant (HOG) from your total tax amount before making your payment.

Claiming the Home Owner Grant (HOG) in British Columbia
The Home Owner Grant is a program designed to help reduce the amount of property taxes paid by eligible homeowners. Here’s a step-by-step guide on how to claim your Home Owner Grant:

1. Determine Your Eligibility: You must be a permanent resident of British Columbia.
•You must be a permanent resident of British Columbia.
•The property must be your principal residence.
•You must be the registered owner of the property.
2 .Understand the Grant Amount:
•Basic Grant: Up to $570
•Additional Grant: Up to $845 (for seniors aged 65 or older, people with disabilities, or surviving spouses of veterans)
3. Apply for the Grant:
•Visit the BC Government’s Home Owner Grant Application website. https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/home-owner-grant/apply
•Ensure you have your property tax notice on hand, as you will need the jurisdiction number and the roll number.
4. Submit Your Application:
•Fill out the application form online or submit a paper form if applicable.
•Submit the application before the property tax due date to avoid penalties on the total tax amount.
5. Receive Confirmation:
•After submitting your application, you will receive a confirmation. Ensure you keep this for your records.

Important Notes:
•Late Payments: If you do not pay your property taxes by the due date, you will incur penalties. Ensure you subtract any Home Owner Grant from your total property tax amount before paying.
•Penalties: The penalty for late payments is a significant percentage of the outstanding amount, so it is vital to pay on time.

If you have any questions or need assistance with your Home Owner Grant application, please contact the property tax office or visit the BC Government Home Owner Grant page directly.
If you have any mortgage related questions on mortgage options, renewals or a home purchase or review of finance outside your mortgage with a financial planning partner, please reply to this email and we are happy to assist.


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

How to Close on a Presale to Preserve Wealth with Reverse Mortgage

General Angela Calla 24 May

As presale closing dates approach, many clients are trying to figure out how to close on the presale they wrote on 2 years ago. If you are 55 years or older, we may be able to help.

For a client purchasing a presale who no longer qualifies for enough of a mortgage on the new purchase, their parents or grandparents can use CHIP to gift the necessary funds. The parents or grandparents can gift the money with no impact on their monthly cashflow (no payments required) and no tax or investment growth impact from taking the money from savings.

Clients 55 years of age or older purchasing the condo for themselves, either as a rental or a home they will eventually move into, have a few options. If they have good equity in their existing home, we can do an interalia over both properties to finance the full purchase price. We will need to payout the mortgage on their existing (if there is one).

Should the interalia not give them enough funds to close, you can also look at doing a reverse mortgage on whichever property will be their primary residence and fund the remaining amount owing through a traditional mortgage on the other property. We do not consider non-subject properties when qualifying.

And, of course, if your clients have enough equity in their primary residence to fund the purchase of the presale, no interalia is required.

If your clients intend on selling one of the properties within the first year, Reverse Open is a good option. If they plan on keeping it for longer they are likely better off to do a traditional reverse and pay the penalty when they sell. I’m happy to run the numbers for both scenario.

 

Recent Client Story – Presale Condo Purchase

Larry (78) and Brenda (74) have a clear title home in Burnaby valued at $3.2M. Their grandson purchased a presale in 2021, closing at the end of May. Not only does he no longer qualify for the mortgage but the appraisal came back lower than the purchase price so he also needs to make up the $80,000 shortfall.

Reverse approved loan amount: $1,242,500

They gifted their grandson $400,000 to close on his presale. The grandson didn’t need that much but Larry and Brenda decided that, rather than gift him just enough to cover the shortfall and qualify, they would gift him enough to help him live more comfortably.

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Updates – May 2024

General Angela Calla 23 May

We wanted to share some key points to consider with the expected changes ahead, particularly as we look forward to the Bank of Canada press release on June 6th. While data suggests a rate cut, it wouldn’t be a total surprise if they waited until July. When the anticipated cut occurs in the upcoming months, it is expected to be 25 basis points, which translates to a $13 reduction per $100,000 in mortgage amount for those with adjustable-rate mortgages or line of credit products.

If You Are Looking to Buy a Home
In some areas, with an increase in listings, it is currently a buyer’s market. Waiting for rates to go down may bring more buyers into the market, driving prices up and offsetting the reduced mortgage rates. This is why the Bank of Canada is cautious and slow with rate decreases. If you qualify now, you can benefit from these market conditions. You may enjoy our FREE mortgage toolbox app.

If You Can’t Qualify Now
Now is a great time to set up a plan! The RRSP limit has been increased, and the new FHSA is a great option. These, combined with other planning methods, will help you reach your goal efficiently. Simply reply to this email with your phone number, and we will have a financial planner get in touch with you.

If Your Mortgage Renewal Is Coming Up in the Next 6 Months
Reach out to us today. We conduct full rate checks before completion to ensure the lowest borrowing costs, so you won’t miss an opportunity. Working without bias is to your best advantage, allowing us to clear the clutter, simplify your life, and ensure you get the best options. We help families by conducting a comprehensive review of their finances, which can free up hundreds or even thousands of dollars monthly, setting you on a path to financial security.

Fun Stuff
-If you haven’t entered our contest to Win a Free Mortgage Payment, do so HERE.
-If you want to catch our next Mortgage Renewal Webinar, register HERE.
We look forward to connecting with you after the Bank of Canada Press Release on June 6th.
Please reach out to us directly with any mortgage questions or for an introduction to a financial planner or real estate partner.


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Navigating the New Capital Gains Tax: What Stock Holders and Real Estate Investors Need to Know

General Angela Calla 19 Apr

The landscape for investors, both in stocks and real estate, is evolving rapidly. One of the key changes making headlines is the proposed new capital gains tax. While aimed at the wealthy, this tax reform is also set to impact the middle class. Understanding its implications and planning accordingly is crucial for investors.

For real estate investors, the new capital gains tax could significantly affect their investment strategies. Currently, when you sell a property that is not your primary residence, you are required to pay capital gains tax on the profit. The proposed changes could increase the tax rate, impacting the overall return on investment.

Given these changes, consulting with a team of professionals is more important than ever. A qualified team can help you navigate the complexities of real estate investment, from purchase to sale. They can provide guidance on tax implications, investment structures, and strategies to optimize your returns while minimizing your tax burden.

The proposed new capital gains tax is set to impact investors across the board. For real estate investors, understanding these changes and seeking professional advice is key. By working with a team of professionals, you can navigate these changes effectively and make informed investment decisions.

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Canada’s Banking Regulator Announcement

General Angela Calla 16 Apr

Canada’s banking regulator announces cap on banks’ mortgages to highly indebted borrowers

Canada’s banking regulator is capping the amount of highly leveraged loans in lenders’ residential mortgage portfolios.

Last month, The Globe and Mail was the first to report the Office of the Superintendent of Financial Institutions (OSFI) had told banks they will have to limit the number of mortgages that exceed 4.5 times the borrower’s annual income, which is also known as a loan-to-income (LTI) ratio of 450 per cent.

In the new rules announced Friday, the regulator said that high household debt poses a risk to the “safety and soundness” of banks and the stability of the financial system.

“High LTI loans originated during the low interest rate time periods have created a long-term vulnerability to the Canadian financial system,” OSFI said. “OSFI’s LTI framework will help prevent a similar buildup of loans on books given to highly leveraged and indebted borrowers in the future.”

Residential mortgages portfolios ballooned as interest rates and prices soared, making Canadian homeowners among the most highly indebted globally.

The new income cap adds to existing mortgage qualification rules, including the federal stress test, which requires borrowers to be able to pay their mortgages if interest rates are two percentage points higher than the negotiated rate.

The measure applies to new mortgages in the bank’s overall portfolio, not to individual borrowers. By comparison, the stress test is applied to the borrower.

Even so, the limits will make it more difficult for some borrowers to get a large enough mortgage to purchase a property.

The number of highly leveraged borrowers has dropped since the COVID-19 pandemic’s real estate boom in early 2022. The amount of new mortgages with a LTI ratio above 450 per cent was 12 per cent in the last quarter of 2023, falling from 26 per cent in the first quarter of 2022, according to data from the Bank of Canada.

The new rule will only apply to new mortgages and not to existing loans or loans that come up for renewal. Banks will be allowed to exceed the income ratio for some clients, which could allow flexibility for borrowers in expensive cities such as Toronto and Vancouver.

In developing the LTI limits, OSFI sought feedback from the industry early last year on mortgage lending risks, and specifically debt serviceability. The regulator said that this approach also allows financial institutions to continue to compete in the market.

The limits apply to loans secured against a property, including a second mortgage from another lender and home equity lines of credit.

The new rule does not apply to insured loans for which the borrower must pay for mortgage insurance because their down payment is less than 20 per cent of the property’s purchase price.

OSFI will assess each bank’s loans above the 4.5 times threshold on a quarterly basis. The measure will take effect in the first quarter of next year.

(Article courtesy of The Globe and Mail – Canada’s banking regulator announces cap on banks’ mortgages to highly indebted borrowers – The Globe and Mail)

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Register Now for Our Mortgage Renewal Webinar!

General Angela Calla 16 Apr

As a part of our ongoing commitment to providing you with the best mortgage solutions and guidance, we are excited to invite you to an exclusive Mortgage Renewal Webinar hosted by the Angela Calla Mortgage Team.

Date: May 2nd, 2024
Platform: Zoom (Link will be sent the day before airing)

Renewing your mortgage is an important financial decision, and we understand that you may have questions and concerns. That’s why we’ve curated this webinar to cover essential topics to help you navigate the renewal process with confidence.

During the webinar, we’ll discuss:
• How to select the best lender for your needs
• Understanding the differences between various lenders and terms
• Unveiling the benefits of working with a mortgage broker
• Strategies to leverage future declining rates to your advantage
• Tips on how to manage debt and accelerate your journey up the property ladder

Our team will provide insights, answer your questions to ensure that you have all the information you need to make informed decisions about your mortgage renewal.

Don’t miss out on this valuable opportunity to empower yourself with knowledge and take control of your financial future.

Reserve your spot now by clicking the registration link below ( you will be sent the replay if you register and cant make the live):

Webinar Registration

Spaces are limited, so we encourage you to register early to secure your spot. Please also forward this to any loved ones looking for mortgage renewal guidance.

We look forward to seeing you at the webinar and assisting you with your mortgage renewal journey!


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog.