It’s a New Year! A time to look forward and hope for a new day. But before we start all that, let’s first take a look back at all the changes that took place last year, and how that may affect the year ahead.
Tighter Mortgage Rules
It was very early in the year when the Canadian government tightened the rules on high-ratio mortgages, doing away with amortization periods of 35 years, and lowering the amount borrowed on home equity lines of credit in Canada to 80% instead of 85%. What does this mean for us in 2012? Well, restrictions on these loans probably aren’t going to get any better, but it does mean that our housing market will be taken over only by those who can actually afford to own a home, and that means that our economy is only going to continue to improve.
Low Rates
Interest rates on mortgages dropped – and we mean they dropped as in plummeted! Naysayers continued to say all year that the rate was going to go back up (despite BoC’s promise that they would not) and they never did. Now, it looks as though those extremely low rates are not only going to be around for this year, but perhaps well into 2013 too!
Fixed Became King
Because the interest rates were so low, banks and other lenders stopped offering discounts on their variable rates, in order to widen their profit margins. Because of that, the fixed rate became king and by far the most popular option for mortgages. This had a lot of analysts declaring the variable “dead” in Canada, but that’s not entirely true. The mortgage world is one that is constantly shifting and changing, and variables will rise up once again.
Looser Rules for Mortgage Brokers
It used to be that only banks could provide mortgages to other provinces, but all of that changed in July 2011 when the Agreement on Internal Trade stated that brokers could offer mortgages to other provinces. So now Ottawa mortgage brokers can find mortgages for individuals in Alberta, and those in B.C. can find them for home-buyers in Newfoundland. And of course, all the provinces in between can also deal back and forth. This not only made things better in the mortgage world for brokers, but for homeowners and buyers too! And of course, with that agreement in place, this isn’t going to change in 2012 either.
The mortgage world sure did change in 2011 and while we can look forward to more changes in the coming year, we can also look forward to the best of mortgages staying the same! ”
