Greg Hardwick
84 Elmhurst Ave. M2N 1R6 Toronto, ON, Canada

This is bound to happen....if you are looking to do something with your current mortgage, the rates are currently exceptional. That will very likely change in the near future.

I hear this all the time (and far too often when it’s too late). To understand mortgage penalties, and how they’re calculated, speak to a broker to get real numbers to help you make decisions that are best for you and your family.

While you are in a store, someone backs into your car...what are your rights? After all, we are in a "no fault" province. My friend Jason Bauman from Servo Insurance Brokers provided me with some insight, and it is not what I thought! I absolutely recommend Jason ([email protected]), if you need any help with your auto insurance coverage. ... https://servoinsurancebrokers.com//dcpd-coverage-in-ontar/

Good news brewing at CMHC to help our wonderful Business for Self (BFS) clients to an easier path to approval at insured rates!

This is great news from CMHC! This new program will provide stable funding to banks and mortgage lenders in order to ensure continued lending to Canadians.

TD Bank is joining BMO in offering highly discounted variable mortgage rates as competition heats up. TD lowered its 5-year variable closed rate to 2.45%, or 1.15% lower than its TD Mortgage Prime rate, until May 31. TD’s special rate follows last week’s move by the BMO which discounted its variable mortgage rate to 2.45% until the end of May. The Canadian Real Estate Association (CREA) said Tuesday that national home sales volume sank to the lowest level in more than five ye...ars in April, falling by 13.9% from the same month last year. The national average sale price decreased by 11.3% year-over-year. Home sales have slowed due to various factors, including measures introduced by the Ontario and B.C. governments to cool the housing market (taxes on non-resident buyers). Other factors affecting the market include higher interest rates and a new financial stress test that makes it more difficult for would-be homebuyers to qualify with federally regulated lenders, such as the banks. As of January 1, buyers who don’t need mortgage insurance must prove they can make payments at a qualifying rate of the greater of two percentage points higher than the contractual mortgage rate or the central bank’s five-year benchmark rate. An existing stress test also stipulates that homebuyers with less than a 20 per cent down payment seeking an insured mortgage must qualify at the central bank’s benchmark five-year mortgage rate. The tighter lending rules are making it harder for homebuyers to qualify for uninsured mortgages, and shrinking the pool of qualified buyers for higher-priced homes. Meanwhile, Canada’s largest lenders all raised their benchmark posted five-year fixed mortgage rates in recent weeks as government bond yields increased, signalling a rise in borrowing costs. In turn, the central bank’s five year benchmark qualifying rate which is calculated using the posted rates at the Big 6 banks increased last week to 5.34%. This qualifying rate is used in stress tests for both insured and uninsured mortgages, and an increase means that the bar is now even higher for borrowers to qualify.

The Minister of Finance Bill Morneau presented the 2019-2020 Federal Budget yesterday afternoon. The budget includes 2 new incentives to assist First Time Home Buyers: Home Buyer's Plan: Effective Immediately, the maximum tax-free RRSP withdrawals have increased by $10,000 from $25,000 to $35,000. This will now apply to people who are separating from a marriage or common-law partnership.... CMHC First Time Homebuyer Incentive: Effective September 2019, First-time homebuyers may qualify for an interest-free loan from CMHC to be repaid when the property is sold. The maximum loan amounts will be 10% of the purchase price for new homes and 5% for existing homes. Here are the stipulations: -Buyer must have a down payment of at least 5%, but less than 20% -Household income must be less than $120,000 -The purchase price cannot be more than four times the buyer's household income These stipulations effectively limit the maximum purchase price to $480,000 If you would like to better understand how these changes may affect you or someone you know, please give me a call to discuss. I’m

You’ve heard me say mortgage insurance is very likely not your best choice for insurance, and people ask me regularly for insurance advice. I’m not an insurance advisor. I, too, am interested in insurance for my family members, so I asked my friend Brian Westlaken for help. Here’s what he provided as an example...if you’d like more info, simply call him on 416-931-8844.

Why do you need a broker? Regulator warns that banks are not there to look after customers' interests

People often ask me why use a mortgage broker instead of dealing directly with the bank... Here’s one fantastic reason (of a multitude) why it makes complete sense.

Changes coming for those with a HELOC and require a second mortgage.

Millennials....looking to buy a home? Great credit is critical. Be certain you have (and use regularly) a credit card, and pay off your balance religiously, and on time.

Mortgage Penalties - BE AWARE! We've discussed Interest Rate Differential (IRD) before, now let's discuss Mortgage Penalties; more specifically how best to avoid them. Being informed is your best defense against punishing penalties down the road, and this is where a mortgage broker can come in particularly handy, especially for inexperienced buyers, as they can help find a suitable mortgage product that balances a competitive rate with the features and flexibility that are r...ight for the buyer (such as a reduced penalty should they need to break the mortgage early for whatever reason). Many mortgage shoppers tend to put greater emphasis on finding the lowest rate, which may save more money up front, but can be detrimental if they need to break contract. For example, a typical penalty on a full-featured mortgage would be three months’ interest vs. 2.75% of the mortgage balance for a low-frills or discount rate mortgage. While there are many fixed-rate products that offer flexible prepayments and fair penalties, another option is to forget about going fixed, and chose a variable rate mortgage. Many variable products charge as low as 0.5% of balance penalty, which is significantly lower than fixed-rate penalties (especially when Interest Rate Differential is used to calculate the penalty). Borrowers need to consider that there is a very real possibility that they may move or need to refinance sooner than expected, and mortgage experts may be able to assist when a mortgage penalty is imminent. The best thing to do is ask your mortgage expert to explain perfectly what the penalty could be for the product(s) on offer so you can make an informed decision from the start.

January 1, 2018 was the official start of OSFI’s new mortgage regulations, and the latest national home sales data suggests a significant number of Canadian home buyers purchased their homes just before the new stress test rules took effect. This isn’t the only example of government policy affecting Canada’s housing market. Earlier this month the Toronto Real Estate Board suggested Ontario’s new housing rules (which include a foreign buyer’s tax) was largely responsible for a...Continue reading

Interest Rate Differential (IRD), what is it? Have you ever asked your lender what the penalty is to break your current mortgage contract? Was the answer likely 3 months interest? If so, you need to read on...... Interest Rate Differential (IRD) is a compensation charge that applies if you pay off your mortgage prior to the maturity date, or pay the mortgage principal down beyond the amount of your prepayment privileges. The IRD is based on: - The amount you are pre-paying; and, - An interest rate that equals the difference between your original mortgage interest rate and the interest rate that the lender can charge today when re-lending the funds for the remaining term of the mortgage. Most closed fixed-rate mortgages have a prepayment penalty that is the higher of 3-months interest or the IRD. Most variable-rate mortgages do not have IRD penalties. Things to be aware of - Each lender has its own formula for calculating penalties. - Some lenders do not use the discount you received in their calculation, which decreases the IRD and can lower your penalty considerably. - When determining the comparison rate, some lenders round up your remaining months to the next longest term. Some round down. - The Interest ACT prohibits IRD penalties on terms over 5 years, after five years has elapsed. In such cases, a maximum 3-month interest penalty may apply. For example, someone who has been in a 6-year mortgage for 60 months or more would pay a 3-month interest penalty (maximum) to break it before maturity. - A small number of lenders prohibit breaking a mortgage early (regardless of the penalty) unless in the case of an approved bona fide sale. Contact me for more information!

I’ve been asked a lot about the upcoming mortgage rule changes for uninsured mortgages (20% or more down payment), so I wanted to explain the change using a straight forward example. As of January 1, 2018 1) You will have to qualify at the greater of two scenario’s; the contract rate + 2%, OR the Bank of Canada Benchmark Rate (currently 4.99%)... 2) High ratio mortgages (greater than 80% loan-to-value) will still be qualified at the greater of the contract rate OR the Bank of Canada Benchmark Rate. (the 2% is not added) 3) Legally binding (firm) Purchase and Sale contracts dated prior to January 1, 2018 will qualify under the current rules (regardless of the close date) 4) Legally binding (firm) Purchase and Sale contracts dated after January 1, 2018 the borrower must qualify under the new rules (rule 1 & 2 above). 5) Refinances approved prior to January 1, 2018 must close within 120 days of application date to qualify under current rules. 6) Pre-approvals that have not been converted to live deals before January 1, 2018 will be subject to the new rules. So what does this really mean for conventional (uninsured) mortgages in 2018? Here is an example as a point of reference: Under the current rules, prior to January 1, 2018, you can qualify at your contract rate (for this example I will use 3.39% as the contract rate) with 20% or more down payment: $700,000 - purchase price $140,000 20% down payment $560,000 mortgage 80% loan-to-value 3.39%, 5 year term, 25 year amortization $110,000 annual income to qualify GDS (gross debt service ratio) = 36.88% Using the same income and purchase price under the new rules as of January 1, 2018, you must now qualify at the greater of the benchmark 4.99% or contract+2%. If contract rate is 3.39%, then 5.39% is the rate you must qualify at because it is greater than the benchmark rate (3.39% + 2% = 5.39%). Example above redone using contract rate+2% = 5.39%: 700,000 - purchase price $250,000 down payment you require more down payment to qualify $450,000 mortgage 64% loan-to-value you now qualify for $110,000 less 3.39%, 5 year term, 25 year amortization, qualified at 5.39% $110,000 annual income to qualify GDS (gross debt service ratio) = 36.39% You qualify for $560,000 mortgage under the current rules (2017), and $450,000 mortgage in 2018 - $110,000 (16%) less. Make sense?

Mortgage Rule changes are coming, so if you’re planning to buy or refinance you may want to move forward ASAP. January 1st the new rules will make it much more difficult to qualify for a new mortgage. Call or message me if you have any questions on how this may affect you.... OSFI is reinforcing a strong and prudent regulatory regime for residential mortgage underwriting OTTAWA October 17, 2017 The Office of the Superintendent of Financial Institutions Canada Today the Office of the Superintendent of Financial Institutions Canada (OSFI) published the final version of Guideline B-20 Residential Mortgage Underwriting Practices and Procedures. The revised Guideline, which comes into effect on January 1, 2018, applies to all federally regulated financial institutions. The changes to Guideline B-20 reinforce OSFI’s expectation that federally regulated mortgage lenders remain vigilant in their mortgage underwriting practices. The final Guideline focuses on the minimum qualifying rate for uninsured mortgages, expectations around loan-to-value (LTV) frameworks and limits, and restrictions to transactions designed to circumvent those LTV limits. OSFI is setting a new minimum qualifying rate, or stress test, for uninsured mortgages. Guideline B-20 now requires the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%. OSFI is requiring lenders to enhance their loan-to-value (LTV) measurement and limits so they will be dynamic and responsive to risk. Under the final Guideline, federally regulated financial institutions must establish and adhere to appropriate LTV ratio limits that are reflective of risk and are updated as housing markets and the economic environment evolve. OSFI is placing restrictions on certain lending arrangements that are designed, or appear designed to circumvent LTV limits. A federally regulated financial institution is prohibited from arranging with another lender a mortgage, or a combination of a mortgage and other lending products, in any form that circumvents the institution’s maximum LTV ratio or other limits in its residential mortgage underwriting policy, or any requirements established by law. These revisions to Guideline B-20 reinforce a strong and prudent regulatory regime for residential mortgage underwriting in Canada, said Superintendent Jeremy Rudin

New mortgage rules coming! Effective January 1, 2018, The Office of the Superintendent of Financial Institutions (or OFSI) has updated the B-20 Guidelines (Residential Mortgage Underwriting Practices and Procedures). What does this mean? Well, when qualifying for a mortgage, there is now a "stress test" for not only insured mortgages, but uninsured mortgages. Meaning, if you have 20% or more down, you will be required to qualify based on the greater of the five year bench...mark rate (4.84%) or the contract rate +2%. Call me at 416-587-8398 if you have any questions, DM me or email me at [email protected]

CMHC explores cutting red tape for self-employed to get a mortgage.

More changes coming! If you have more than 20% down, message me if you want to know how this will affect you.

Let me know if you have any questions...I'm always available!

A brief history of mortgage-rule changes that have affected you! 2008: The government eliminates 40-year amortizations (dropping them to 35), raises the minimum insured credit score, adds a new maximum total debt service ratio of 45% with additional loan documentation standards. 2010: The government introduces stress-testing for insured mortgages using the Bank of Canada’s 5-year posted rate. Other key changes include a 90% LTV max. on refinances (down from 95%), and an 8...0% LTV maximum for rental financing. 2011: Regulators introduce a 30-year maximum amortization on insured mortgages over 80% LTV, an 85% loan-to-value limit on insured refinances, and eliminates government insurance on secured lines of credit (e.g., HELOCs). 2012: The government reduces the maximum amortization period to 25 years for high-ratio insured mortgages, limits the gross debt service and total debt service ratios permitted to 39% and 44%, respectively, and bans mortgage insurance on properties over $1 million while implementing a maximum 80% LTV for refinances. 2014: OSFI releases its B-21 guidelines, setting out insurer restrictions on everything from debt-ratio calculations and self-employment evaluation, to borrowed down payments and cash-back mortgages. 2016: The Department of Finance announces an increase to the minimum down payment from 5% to 10% on the portion of a home’s price that’s above $500,000. 2016: The federal government introduces a stress test to be used in approving all high-ratio insured mortgages with terms of five years or more. It requires borrowers to prove they can handle payments at the Bank of Canada’s posted 5-year rate (currently 4.64%). 2016: New stress test regulations extended to include insured mortgages with 20% equity or more. It bans certain mortgage types from being insured (including refinances), extended amortizations and single-unit rentals. 2017: OSFI imposes onerous capital requirements on default insurers, thus disadvantaging many bank competitors (and consumers) by jacking up rates substantially on low-ratio insured mortgages. What’s next? Stay tuned, more is coming!

Great read! Reach out to me if you're curious if it's time to lock in.

Message me if you're curious how this change will affect your mortgage or LOC.

WHY CHOOSE A MORTGAGE BROKER? You want the best-for-you mortgage, so instead of walking into your bank to get whatever product they offer, we work for you. We get your bank, other banks, credit unions and trust companies to compete for your mortgage! I'll help you to:... * Make informed decisions * Save time and money * Protect your credit rating * Get better service * Get approved! What we do: * Residential Mortgages: ----> Purchases ----> Refinancing ----> Renewals ----> New Construction * Home Equity Lines of Credit * Debt Consolidation * Commercial Mortgages

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