Mortgages with Greg
242 Main St K1S 1C7 Ottawa, ON, Canada

BE PREPARED: Slow Rebound: The implications of lower immigration, a record amount of supply set to hit the market, lack of a falling stress test rate and high prices relative to incomes are this, says Capital Economics: Unlike following the Global financial crisis, neither home sales nor prices will fully recover for years. Speculation on HELOCs: HELOCs account for 17% of the Big 6 Banks’ mortgage portfolios. And now some are speculating that banks will pull back on HELO...C lending. (Reuters Story) Banks say there’s been no notable increase in HELOC borrowing thus far, but certainly there’s been an increase. If you’re a HELOC borrower who wants to keep the credit taps flowing, the points to remember are this: Don’t let your credit score slide, and hope your home value doesn’t plunge (lenders monitor both, among other things). And never, ever miss your monthly HELOC payment, even accidentally. See more

Should you refinance your mortgage in the COVID-19 crisis? The COVID-19 pandemic has caused a literal world of trouble, affecting both household finances and the global economy. During the crisis, many are considering refinancing their mortgages. But is the coronavirus pandemic a good time for you to refinance your mortgage? First, a disclaimer. Whether you should refinance during the coronavirus pandemic is a question best answered with a professional who can walk you throug...Continue reading

How to Play It? As COVID-19 treatments and vaccines eventually roll out, mortgage rates should revert somewhat higher. The key message for now is that hundreds of thousands of Canadians will never get their jobs back post-pandemic. For that reason, among others, a full economic recovery could take years, plural. Today’s BoC meeting therefore does not change the mortgage playbook for most well-qualified, risk-tolerant borrowers. For them, leaning towards the lowest mortgage ra...te they can find, regardless of term, makes sense so long as: The mortgage features and term length match one’s 5-year plan i.e., portability, refinance and prepayment options all meet their needs households with employment or budgetary risk, for example, may be better suited to a deep discount, full-featured portable 5-year fixed rate The penalty is reasonable if there’s any chance of changes to the mortgage before maturity don’t ignore this point if there’s a chance you’ll need to sell your home before your mortgage matures The advice and service of the mortgage provider are adequate To the extent one is willing to pay more for this, and less-experienced mortgage shoppers often should Basic funding costs dropped today in the mortgage market (as measured by Canada’s 5-year swap rate, which reflects a bank’s base cost to fund a fixed-rate mortgage). Counteracting this are slightly widening credit spreads (meaning lenders must pay a bigger premium above their base costs to procure mortgage capital). Net-net, current market action implies flat to slightly lower fixed rates near-term, minimal short-term changes to variable rates and heavily suppressed rates (overall) through at least 2021. See more

Three Reasons Why Mortgage Refinances Are Tougher For Canadians today than ever before... The other day one major chartered bank announced: In view of the ongoing COVID-19 situation, the following changes are being made to lending policies affecting new applications submitted to us on or after Thursday, April 9, 2020. These changes are required due to declining employment, energy sector impacts, unstable property values, and restrictions on appraisers being able to access pr...operties for appraisal reports. In short, there are three main reasons why mortgage refinances have become much tougher for Canadians with COVID-19. More Stringent Scrutiny of Applicants’ Income and Employment Lower Appraisal Valuations Than Expected Lender Cutbacks in Maximum Loan-to-Value Ratio

FIXED OR VARIABLE RATE MORTGAGE? Today’s best variable rates give borrowers a half-point head start versus a 5-year fixed. If one assumes the latest widely-held rate forecasts are correct (see below), prime 0.35% or better variables still have a projected edge based on interest cost alone. And many are still willing to make that bet despite rate discounts being 50+ bps worse than in February. They’re doing so on the assumption they can lock into a fixed rate anytime. But wh...ile that optionality is theoretically valuable, this rate cycle is different. With Canada’s overnight rate near the zero bound, chances are small that anyone will lock their variable into a fixed rate that’s below their starting rate. That, on top of slippage costs (how much you lose when locking in due to your lender’s poor conversion rate) and the cost of bad timing (how much you lose because you locked in too late, which most do) makes any rate-lock strategy a poor reason to go variable in this climate. From Rate Spy R