Mortgages in Canada

[Topaz]

The Finance Minister says that because of household debt that he may have to change the mortgage rules, instead of 5% down it will have to go up but to what? 7% 10% ?? This will hurt first time buyers or it may force them to buy a really cheap house, that will cost more to fix up. There's also the HST tax next year in Ont and BC and this will probably slow down the housing industry again.He also said something about getting rid of the 35 year mortgage. I understand why he's doing it but it seem one bad nnews after another. http://ca.news.yahoo.com/s/reuters/091221/business/cbusiness_us_mortgages

[Riverwind]

Extremely responsible moves on the part of the government that will help avoid a housing bubble and collapse.

Measures such as a low down payment serve to inflate housing prices which, in the end, leaves first time buyers worse off.

[blueblood]

The Finance Minister says that because of household debt that he may have to change the mortgage rules, instead of 5% down it will have to go up but to what? 7% 10% ?? This will hurt first time buyers or it may force them to buy a really cheap house, that will cost more to fix up. There's also the HST tax next year in Ont and BC and this will probably slow down the housing industry again.He also said something about getting rid of the 35 year mortgage. I understand why he's doing it but it seem one bad nnews after another. http://ca.news.yahoo.com/s/reuters/091221/business/cbusiness_us_mortgages

Houses are not expensive to fix up when you factor how much return you get on that investment in the final sale of the house.

[Wilber]

I'm assuming this is for CMHC backed mortgages. I can see why they are concerned about people being in over their heads if mortgage rates go up two or three percent. We don't want the kind of carnage in our market that they have seen down south so perhaps some preventative measures are in order. HST is just on new homes in BC so it shouldn't effect the price of fixer uppers, unless reduced demand for new homes because of the tax drives up the prices of older homes. It will be interesting to see. One thing for sure, the consumer is going to get creamed by this tax in ways we haven't yet anticipated.

[Moonbox]

I work for a bank and this is a VERY responsible move on the government's part. There's already strong signals pointing towards a housing bubble collapse in Canada. How many jobs did we lose this year? How much have housing prices STILL gone up? Pretty stupid if you ask me.

There are thousands upon thousands of Canadians out there getting mortgages who have no business owning a home and who are a couple weeks of layoffs away from defaulting at any time.

[wyly]

I work for a bank and this is a VERY responsible move on the government's part. There's already strong signals pointing towards a housing bubble collapse in Canada. How many jobs did we lose this year? How much have housing prices STILL gone up? Pretty stupid if you ask me.

There are thousands upon thousands of Canadians out there getting mortgages who have no business owning a home and who are a couple weeks of layoffs away from defaulting at any time.

I'm an admitted financial dunderhead but it seems to me to be 6 of one half a dozen of the other...people buying homes now when they can afford it may be hurt when interest rates go up but we're a long way afrom those kind of rates, my rate is lower than when my parents bought their home in '59....and there are still restrictions on how much a bank can lend so I don't see the problem...

I would think that making it more difficult to borrow/spend money and get the economy moving is more likely to burst any housing bubble and stop the recovery...

[maple_leafs182]

We are in a depression not a recovery, stop listening to mainstream media.

We need to raise interests to discourage spending and encourage saving.

We are creating another bubble having these rates so low.

Peter Shciff predicting the collapse of 2008

http://www.youtube.com/watch?v=2I0QN-FYkpw

What he is saying now

http://www.youtube.com/watch?v=kWpRMGi3Px0

We need to abolish the Central Bank system.

"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered." - Thomas Jefferson

Why do countries give the power of issuing and regulating money to private corporations, it doesn't make any sense.

I know lot's of you people love living in your dream world where corruption doesn't exist in a democracy, but it does.

We need to wake up to reality. We are headed for a The Greatest Depression yet and it is by design. We need to get rid of the Central Bank system and arrest the criminal central bankers.

Edited December 21, 2009 by maple_leafs182

[Shady]

We are in a depression not a recovery

Complete nonsense. Saying we're in a depression lessens the significance of a real depression.

We need to raise interests to discourage spending and encourage saving.

Since the beginning of the recession, savings rates have already increased dramatically.

[Mr.Canada]

5% down is almost nothing and it should be higher. It is far better to save more then that for the down payment and it isn't that hard to do. People just need to make a conscious decision to save and make the sacrifices necessary to do so. It took me 2 years to save $14,000 cash while working at my first serious job. It didn't pay much but I made a decision to save everything I could in order to own my own home and to stop paying rent.

Hopefully more people make the decision to stop living in slums and start earning and saving money in order to become a home owner and be able to take pride in their community and home. Perhaps this will stop the graffiti and drug dealing. I doubt it but who knows. People that are owning their own homes are more likely to take pride in it and take care of the property. Much more so then if the government just gives them an apartment for free. Like the social housing system we have now which just isn't working at all and is broken.

[Jerry J. Fortin]

Complete nonsense. Saying we're in a depression lessens the significance of a real depression.

There will likely be some new definitions out over the course of the next few years. Lets face it a jobless recovery isn't doing much good to the average citizens, let alone a government that relies heavily on taxation for its revenue streams.

Since the beginning of the recession, savings rates have already increased dramatically.

When nearly nothing was being saved before that is not a great stretch. Most society lives on credit and debt. Savings are a somewhat foreign concept to many folks who merely get by from paycheck to paycheck.

[maple_leafs182]

Complete nonsense. Saying we're in a depression lessens the significance of a real depression.

This is just the beginning, it will get worse

[Jerry J. Fortin]

This is just the beginning, it will get worse

You could very well be right.

[bush_cheney2004]

....I know lot's of you people love living in your dream world where corruption doesn't exist in a democracy, but it does.

We need to wake up to reality. We are headed for a The Greatest Depression yet and it is by design. We need to get rid of the Central Bank system and arrest the criminal central bankers.

What's with all this "we" stuff? Canada brags that it has the soundest banking system in the world, which historically means less domestic capital, more foreign investment, etc., etc.

Are you pretending to be an American again?

[maple_leafs182]

...

The american dollar is the global reserve currency

The american economy is the largest in the world

If the american economy collapses, it will be felt world wide.

Just like in 2008

[bush_cheney2004]

...

The american dollar is the global reserve currency

The american economy is the largest in the world

If the american economy collapses, it will be felt world wide.

Just like in 2008

The American economy did not collapse....it went into recession...just as it has many times before. Besides, if you really believe that, it doesn't matter what you do in Canada, right?

[Shady]

When nearly nothing was being saved before that is not a great stretch. Most society lives on credit and debt.

Not necessarily true.

South of the border, the U.S. savings rate has ballooned to 6.9%, its highest rate since 1993. In Canada, however, the savings rate has jumped more modestly to 4.7%"

Link

I'd say that a savings rate of almost 5% is pretty solid.

[Wilber]

I'm an admitted financial dunderhead but it seems to me to be 6 of one half a dozen of the other...people buying homes now when they can afford it may be hurt when interest rates go up but we're a long way afrom those kind of rates, my rate is lower than when my parents bought their home in '59....and there are still restrictions on how much a bank can lend so I don't see the problem...

I would think that making it more difficult to borrow/spend money and get the economy moving is more likely to burst any housing bubble and stop the recovery...

I guess it depends on house prices. You would be very lucky to pay 400K for any kind of decent detached house in my town. 5% down would give you a $380,000 mortgage and an increase in rate from 4 to 6 percent would result in your payment rising from $1700 a month to over $2100 on a 35 year mortgage. Add over $200 PM for taxes plus utilities and maintenance, that could make it tough for someone who barely qualified in the first place.

[capricorn]

There are thousands upon thousands of Canadians out there getting mortgages who have no business owning a home and who are a couple weeks of layoffs away from defaulting at any time.

One real estate expert said a major problem for mortgage holders who are living on the financial edge is that as soon as they build up a little equity, they rush out to re-mortgage their property. Then, they use the proceeds to subsidize their living expenses and/or to purchase consumables. I would imagine this is especially hazardous for mortgagees who bought a home with a very low, or zero, down payment.

[Jerry J. Fortin]

I guess it depends on house prices. You would be very lucky to pay 400K for any kind of decent detached house in my town. 5% down would give you a $380,000 mortgage and an increase in rate from 4 to 6 percent would result in your payment rising from $1700 a month to over $2100 on a 35 year mortgage. Add over $200 PM for taxes plus utilities and maintenance, that could make it tough for someone who barely qualified in the first place.

Interest rates will go up, that is a given. Now under those conditions how many folks will be in trouble? If a bunch of folks decide to sell, then what happens to the prices? Once prices fall, what happens to equity? There is a long and slippery slope ahead for far too many people.

[blueblood]

Interest rates will go up, that is a given. Now under those conditions how many folks will be in trouble? If a bunch of folks decide to sell, then what happens to the prices? Once prices fall, what happens to equity? There is a long and slippery slope ahead for far too many people.

Refer to Saskatchewan in the 1980's. Yikes!

[wyly]

Refer to Saskatchewan in the 1980's. Yikes!

I was there, YIKES is an understatement...19-20% rates...

[cybercoma]

Perhaps this will stop the graffiti and drug dealing.

Wait a minute... let me get this straight. You believe that if the government makes it MORE difficult to buy a home, people will stop spraying gaffiti on walls and selling drugs? Did I read that correctly? Forget the graffiti and drug-dealing nonsense for a minute and let's generalize. You believe that making it more difficult to buy a home, crime in general ought to go down?

[blueblood]

Wait a minute... let me get this straight. You believe that if the government makes it MORE difficult to buy a home, people will stop spraying gaffiti on walls and selling drugs? Did I read that correctly? Forget the graffiti and drug-dealing nonsense for a minute and let's generalize. You believe that making it more difficult to buy a home, crime in general ought to go down?

This is Mr. Canada we're talking about, some days he's right, some days he's left, most of the time he's wrong.

[cybercoma]

This is Mr. Canada we're talking about, some days he's right, some days he's left, most of the time he's wrong.

Oh. One of those. Thanks. I didn't get the memo.

[Peter F]

We are in a depression not a recovery, stop listening to mainstream media.

Then provide links to MSNBC and Fox news to support the point.

By your own terms your argument becomes meaningless.