Weekly Digest

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October 10th, 2024

Partner Trip for 2025

April (Spring) 2025, our annual realtor trip will be held in Nashville, Tennessee.

Qualifying is easy. Send $1,500,000 in total closed mortgage business to automatically qualify.

To date, we have 5 realtors who have already qualified.

Rates

Will we see a 0.25% or a 0.50% cut on the 23rd of this month? Even if the Bank doesn’t opt for a “jumbo” cut, a smaller 0.25% cut is virtually guaranteed. That would mark the bank’s fourth consecutive rate cut since it began easing rates in June.

We have noticed a steady pick up in financing activity over the last month with lower rates on the horizon.

Insured Refinancing

Lenders and mortgage insurance companies will now be able to offer a refinancing product to 90% of homes valued up to $2,000,000. The refinance funds must be used to construct one or more secondary suites (e.g., a laneway home, basement suite, above-garage suite, etc.). The program starts January 15th, 2025.

General Parameters

• Already own their property (refinancing)

• The borrower or a close relative are occupying one of the current units

• Purpose of funds is the intent to construct additional units

• The additional unit(s) must not be used as a short-term rental

• The new units must meet municipal zoning requirements and be fully self-contained (e.g., with kitchens, bathrooms, separate entrances, etc.)

Loan Parameters

• Maximum amortization is 30 years

• Additional financing must not exceed the project costs

More information is here.

The intent of the program is to help fill the void of affordable housing in the country. As per the chart below, 70% of purchases are non-investment properties. The hope is that this program will help stimulate some economic activity in the primary residence sector.

Does it make sense to refinance to 90% with restrictions? Or simply refinance to 80% and avoid default insurance premiums and use the funds as you see fit? I don’t know if that extra 10% difference makes up huge value for existing home owners… More details to follow.

Quest Trade

30 months ago, Questrade advertised heavy entering into the mortgage space with a direct to consumer product. Last week, they have pulled out of the lending market, and are refocusing on investments.

“The company is making a strategic directional change to its mortgage business. We will continue to service the company’s existing mortgages but we will not be taking on new mortgages.” “The reasoning is more or less that, while we did have a ton of interest, the product didn’t scale the way we wanted.”

Scotiabank’s similar launch of “E-Home” showed similar results.

Brokers are more important than the banks realize?

August Home Sale Stats – Ontario

• Number of residential sales = 13,354

  • -0.90% year over year

• Average home price = $859,669

  • -0.90% year over year

• Sales to new listing ratio = 43%

  • -3.2 points year over year

• Unemployment = 7.1%

  • +0.4 points month over month

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 4.60%

• 3 year fixed, 30 yr amortization – 4.60%

• 2 year fixed, 30 yr amortization – 6.00%

• 5 year variable, 30 yr amortization – Prime – 0.70% = 5.75%

• 5 year fixed, 25 yr amortization – 4.60%

• 3 year fixed, 25 yr amortization – 4.60%

• 2 year fixed, 25 yr amortization – 5.95%

• 5 year variable, 25 yr amortization – Prime – 0.80% = 5.65%

INSURED

• 5 year fixed, 25 yr amortization – 4.39%

• 4 year fixed, 25 yr amortization – 4.49%

• 3 year fixed, 25 yr amortization – 4.29%

• 5 year variable, 25 yr amortization – Prime – .95% = 5.50%

Fast Facts

• $16.5 billion. Value of Rogers’s combined sports properties, including the Blue Jays, Sportsnet, and its recently acquired majority stake in Maple Leafs Sports & Entertainment.