Weekly Digest

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September 27th, 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 4 realtors who have already qualified.

Minimum Down Payment Clarity

Now confirmed, the minimum down payment for an insured mortgage with a purchase price above $1,000,000 will follow’s today’s rules. 

The current formula is 5% of the first $500,000 and 10% of the next $499,999. On a current $999,999 purchase, the client requires $75,0000 in down payment.

The new formula is 5% of the first $500,000 and 10% of the next $999,999. Clients can purchase for $1,499,999 with $125,000 in down payment.

We are still waiting to see if the default insurance premiums will increase on purchases above $1,000,000.

Assuming premiums remain the same, borrowers will pay a hefty insurance premium to avoid the 20% down payment. For a max purchase of $1,499,999 with the minimum down payment ($124,999.90) the insurance fee will be $55,000. This also comes with Provincial sales tax of 8% for a total insurance cost of $55,000 + $4,400.

Income needed to qualify on the above is well above of $300,000!

Stress Test Changes on Mortgage Switches

On mortgage renewal, clients have 3 options.

1. Renewal – On a renewal there is no requalification required and the balance of the loan, along with the lender remain unchanged.
2. Switch – Clients move their mortgage to a new lender leaving the mortgage balance unchanged. This option is for clients who have found a better rate or product elsewhere. Historically clients would need to be re-stress tested while they requalify.
3. Refinance – Clients have the flexibility to make any changes required to their loan assuming a new stress test and requalification. They can change the amortization, lender, product and mortgage loan amount.

For clients looking at option number 2, the stress test was punitive. These clients have already proved their qualification in the past and were not asking for additional funds from the new lender. Their terms and conditions would remain the same, but with (what should be) a better rate and payment with the new lender.

The new changes remove the stress test for these clients, and they will now qualify without the additional 2.00% on top of their end rate. This represents an approx. boost of qualifications by 12%.

To note, straight switches represent a small part of our business as retention rates at lenders are between 80%-90%. Clients whose mortgage is coming due generally will choose option 1 (simplicity) or option 3 (re-structuring).

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 4.79%

• 3 year fixed, 30 yr amortization – 5.04%

• 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 – 4.74%

• 3 year fixed, 25 yr amortization – 4.94%

• 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 – 4.49%

• 4 year fixed, 25 yr amortization – 4.54%

• 3 year fixed, 25 yr amortization – 4.64%

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

Fast Facts

• 22% – The amount that housing starts dropped in August, undoing July’s (surprising) gains.

• $83,500 – The total amount in fines issued, so far, by the City of Brampton through its residential rental licensing program.

• 727,819 – Loonie Dogs that Toronto Blue Jays fans ate this season, breaking a franchise record. The Tuesday game promo saw an average of56,541 hot dogs eaten per game.