Mortgage Trends to Look For in 2016
The 5- year fixed mortgage rate is the most popular rate in Canada. View historical values for posted rates as far back as 1973. These rates are sourced from the Bank of Canada which sources its data from posted bank rates.
HERE ARE 4 MORTGAGE TRENDS TO LOOK FOR IN 2016……
- LOWER RATES OFFSET HIGHER RATES
It’s not likely that mortgage rates could dip even lower in 2016 due to the government guarantee fees that are being increased in Ottawa- which puts the banks in charge of more capital in mortgages go bad. Lenders will have a difficult time selling mortgages because investors are expected to demand higher returns for their potential risks. This puts a lot of weight on the banks, who will have no problem raising the cost of a mortgage as these changes come into effect.
- HOT & COLD HOUSING
The temperature of the housing market will depend on geography. Some areas such as Vancouver, Toronto and places in Alberta should expect a rise in minimum down payment requirements on any purchases above $500K. Slower markets should expect a dip in higher-end/luxury home and more conservative home appraisals.
- MISSED MORTGAGE PAYMENTS
With the current economy, and drop in oil prices, many people are getting laid off. This will contribute to investors’ perceived risk in lending, as many of them unemployed are expected to miss mortgage payments. This could limit the options for getting a good rate at renewal.
- PRIVATE LENDERS
The new mortgage regulations set by the Government have made banks pickier about who they lend to, which could send all those who don’t qualify at a bank to seek out alternatives. This opens up many doors for private lenders, who are not affected by these new government regulations.
Contact me for more information on how these predictions could affect your mortgage.