It’s just one week into this brand new year and already, some of the biggest story lines of the year are already unfolding. Everyone’s keeping a close eye on both the United States and the Euro zone to see what unfolds there (and will have an impact here,) and there are already some big indicators of what you can expect from the Canadian mortgage market this year. Here are our predictions of what we think is to come for 2013 mortgages.
Rate Comparison Sites Boom in Popularity
Consumers have more options than they ever did before; and it doesn’t take much to hop online, zoom over to your nearest mortgage rate comparison website and see who can give you the best deal. This is good for consumers, as each and every one can now find the best, lowest rate for them. However, it’s said that it will shrink profits for the entire industry, as brokers and lenders will each be competing with each more this year than ever before.
Mortgage Jobs Lost
Unfortunately, it’s not all good news for this coming year. Those rate comparison webistes will have a huge and direct effect on the number of mortgage brokers and bankers there are out there. Couple this with people taking to the Internet to find out most of the information for themselves, and you can see just how unecessary several mortgage industry jobs will become.
The Death of Non-Prime Mortgages
This is actually something we saw in 2012, but it will continue into and throughout this year. With tigheter mortgage rules and tighter OSFI rules, it’s more difficult to get a mortgage than probably ever before. Don’t expect this to change any, as lenders are still approving only the most bona fide quality applicants, with the most documentation and proof of credit and income available.
As mortgages become tougher to get, and lenders start turning to only top-rated borrowers, there is an upside – fewer mortgage defaults here in Canada! Every cloud has a silver lining and in this case, it’s the fact that those in the mortgage market won’t be a risk to it.
More Construction and Reno Financing
As people will find it increasingly difficult to just move out of their old home and find a new one that meets all of their new requirements, they’ll instead turn the critical eye to their own home. Construction and home renovation financing will be big this year, as people put off that move and instead, try to improve their existing home.
The Return of the Variable
This might be the best news of all, especially for those looking to get the best deal on their mortgage. While rock-bottom interest rates have made fixed mortgages the debt of choice for the past several years, that will change in 2013. While you won’t find the steals that were to be had in 2008, you can expect lenders to start offering bigger discounts on variable, making them a close match for those fixed rates.