Thursday, October 28, 2021 02:29

The Week In Mortgage News


Each week we will compile a list of the poignant mortgage related stories in the news which we will end  with an update on interest rates.

March 21-27 2011



This was a busy week for mortgages in the news as the Federal Government released the Budget and global uncertainty continued to affect the financial markets, not to mention a Federal election was called!

We start off with the release of the Budget. Usually there is some interest mortgage related news that comes from this. This Budget didn’t offer anything major but did hint at some changes. While vague, and with no more than reference the Budget mentions that the current CMHC housing guidelines will be reviewed.

“The budget documents state only that Ottawa ‘will introduce a legislative framework that will formalize existing mortgage insurance arrangements with private mortgage insurers and Canada Mortgage and Housing Corporation, including the rules for Government-backed insured mortgages. The measures strengthen the Government’s oversight of the mortgage insurance industry.’ ”


Next up, we have the story this week of a Vancouver man who spoke out regarding his penalty charged to break his mortgage. The issue was that his bank quoted him a number and nine months later that number had doubled.

Penalties to break your mortgage early are typically the greater of 3 months interest or the Interest Rate Differential (IRD). In this case the way the IRD was calculated changed and resulted in the big penalty increase.

I will write a blog about this and how to calculate it shortly.


In Real Estate news, February set a new record for new condo sales. There were 2,202 new condominium suites sold in the Greater Toronto Area in February, marking the first time ever that sales have exceeded the 2,000 unit threshold in that particular month, the Building Industry and Land Development Association (BILD) revealed today.  Needless to say the Toronto Condo Market is hot!



Interest Rate Update.

A few weeks ago all the experts had been predicting a rise in Interest Rates in the first half of 2011. However with the tragic events in Japan, and unrest in North Africa and the Middle East,  the markets have backed off recently and now most people are expecting an increase in rates to come in the second half of the year.

The news looks good for low interest rates for a while still as Only one of the 11 primary dealers surveyed by Reuters forecast the Bank of Canada will boost its key interest rate target from the current 1.0% at its next policy-setting date on April 12.

Six dealers see the first rate hike this year in the second half, with four forecasting a 25-basis-point rate hike in July. That compares with five dealers with this view in the Feb. 18 dealer poll. Scotia Capital said in a note that Friday’s tame CPI data “further reinforces our view that the BoC will likely remain on hold until October.”

It was only a couple weeks ago that we were preparing for a Rate Hike.


It is also important to note that historically the Bank of Canada has been tentative or completely inactive during Federal elections. The bank of Canada likes to remain politically neutral so the chance of them making any chances during the election are very slim. Also noting that the markets don’t like the uncertainty of an election, it is a general consensus that the BOC wont move in interest rates until the election has wrapped up.


For now you can rest easy and be confident with Prime rate staying at 3.00% for your variable rate mortgage!


To get all the Mortgage News as it happens follow @GTAMortgageNews on Twitter.