Mortgage Network London Inc.

Great News to get things started this summer! More cuts haven’t been ruled out, keep the good news coming!

Despite a challenging market with slow sales and rising interest rates, TD Bank reported strong performance in its Real Estate Secured Lending (RESL) sector for Q2, encompassing residential and commercial mortgages, HELOCs, and refinancing. Key factors contributing to this success include significant loan and deposit growth, increased mortgage market share, and the success of the TD Mortgage Direct channel, which simplifies the mortgage application process. While a substantial portion of TD's mortgage portfolio will renew by 2026, potentially leading to higher payments due to current interest rates, the bank has implemented proactive measures such as extending amortization periods to make payments more manageable. Overall, TD Bank's performance showcases its ability to navigate a complex market environment and achieve growth in the RESL sector.

Some good news pertaining to inflation, directly relating to Bank of Canada rate cuts. New reports out show that inflation from the month of April sunk to 2.7% leaving some to speculate that Bank of Canada rate cuts could be on the horizon for the month of June. It doesn’t mean that anything is set in stone, it's a glimmer of hope for those looking to lock in lower mortgage rates.

Some good news pertaining to inflation, directly relating to Bank of Canada rate cuts. New reports out show that inflation from the month of April sunk to 2.7% leaving some to speculate that Bank of Canada rate cuts could be on the horizon for the month of June. It doesn’t mean that anything is set in stone, it’s a glimmer of hope for those looking to lock in lower mortgage rates.

Mortgage Rate Monday!

This week we’re not seeing any significant changes in mortgage rates on the fixed and variable rates. This week we’re looking at the 5-year variable rate mortgage which is hanging in at the 6% and hasn’t seen much change in the last little as it has hung around that rate for a while now. Likely to be driven by the next update from the Bank of Canada in June.

The Canadian Real Estate Association (CREA) has noted a drop in home sales from March to April 2024. This comes as more new listings hit the market, typical for the spring season. Even with this decline, average home prices are still lower compared to April 2023. Economists are predicting a possible recession for Canada, but it’s expected to be milder and shorter than earlier forecasts suggested. This economic outlook, along with possible interest rate changes, could impact the housing market.

FAQ: Are there prepayment penalties that are specific to Private Mortgage?
Private mortgages offer more flexibility regarding prepayment penalties compared to traditional lenders. This is because private lenders rely on long-term interest income, and early prepayment reduces their profit. The good news is we can often negotiate the prepayment terms, potentially reducing or eliminating the fee.

Two main structures exist for these penalties: the Interest Rate Differential (IRD) and a fixed fee. The IRD compensates the lender for lost interest if you prepay early, while a fixed fee is a set dollar amount charged for early repayment.

We don’t just provide traditional mortgages, our expert team works in all different types of mortgages to help fit your needs.
Refinancing, renewals, and debt consolidation are all prime examples of how we can navigate the mortgage world to make sure your financials work for you! Reach out and speak to one of our brokers today!

As many experts have speculated, could we see interest rate cuts from the Bank of Canada as early as June? However, with the increased employment and increased inflation from April, we may have to hold our horses. Although it's still a possibility that we see rate cuts in June/ July, it could end up getting pushed if we see continued inflation into May.

Some Relief is on Its Way for Fixed Rate Borrowers

The decline in bond yields, triggered by a shift in expectations influenced by the US Federal Reserve's policy stance, has alleviated pressure on fixed mortgage rates. This shift is particularly notable as it comes amidst earlier concerns of potential rate hikes, which have now been assuaged by Fed Chair Colin Powell's comments indicating a less hawkish stance on interest rates. The US economy's unexpected strength in 2024 has further contributed to the more optimistic outlook, with inflationary pressures and rate-cut expectations being moderated. This favorable environment has stabilized fixed mortgage rates and widened variable-rate discounts, making variable-rate options more appealing to borrowers. Overall, the less hawkish Fed stance has provided a reprieve for bond yields, benefiting Canadian fixed-rate mortgage borrowers and potentially paving the way for future rate adjustments by the Bank of Canada.

Enter the Mortgage Glossary! Prepayment Privilege

Prepayment privilege refers to the freedom given to mortgage borrowers to make extra payments toward their principal amount without facing penalties. This privilege is often included in mortgage agreements and can be of two types: annual prepayment privilege and increased payment privilege.
The annual prepayment privilege allows borrowers to make a lump sum payment each year, usually up to a set percentage of the original loan amount. The increased payment privilege permits borrowers to raise their regular monthly payments by a certain percentage annually. These privileges offer flexibility, help reduce overall interest costs, and are important considerations when selecting a mortgage product.

Some Good Real Estate News for This Canadian City

The year-over-year real estate market is up 25.5% in sales for the city of Montreal compared to April of 2023. All other KPIs indicate a stronger Spring market. Not only is Montreal real estate looking good, but other cities around Quebec are also seeing stronger sales this Spring.

Mortgage Rate Monday!

Comparing top fixed rates in Ontario today!
Do you have questions? We have answers. The 5-year fixed rate is traditionally the go-to fixed term, however, due to the expectation of decreased interest rates from the Bank of Canada, the shorter-term mortgage is looking more desirable.

Rates provided by rates.ca, based on top Ontario mortgage rates on May 6

According to a recent BMO survey, most Canadian hopeful homebuyers are holding off on buying in hopes of snagging lower interest rates. Even with plans on pause, owning a home is still a big dream for 62% of those surveyed. The survey also shows a mix of feelings among first-time buyers, with 85% making strides financially but stressing about things like surprise expenses and how pricey it all feels. Interestingly, lots of young folks are diving into the real estate pool, but the worries about costs, surprises, and climate issues still hang around.

FAQ: What is porting a mortgage and how does it work.
In simplest terms, porting a mortgage involves transferring an existing mortgage from one property to another when moving homes. Not all mortgages are portable, so it's crucial to check eligibility with your lender. The process includes applying for a mortgage on the new property, where the lender evaluates your financial status and the property's value. If approved, your existing mortgage terms, including interest rate and repayment terms, are transferred to the new property. There may be fees associated with porting, such as administration fees, and additional financing might be necessary if the new property's value exceeds the mortgage balance.

Are you self-employed and struggling with your mortgage situation? We can help with that, our team of experts will be able to offer solutions to navigating your mortgage to get you on track for a mortgage that works for you! Reach out to the team for a free consultation

Canadian homeowners, be aware of the rapid rise in interest rates during mortgage renewals, the sharpest increase in over four decades. Experts foresee potential monthly payment hikes of 30 to 40 percent upon renewal. With around 500 daily renewals this year and a projected rise to 750 daily next year, many households are feeling the financial impact. Consider shorter-term options at higher rates for immediate renewals or strategize for a 2025 renewal, using this time to plan and seek expert guidance for a smoother transition. Stay informed and proactive to navigate these changes effectively.

Are you looking for your first home? We know the challenges of navigating the process, and we are here to help. Our goal is to make the mortgage side of things as easy as possible, answering any questions along the way. We are with you from pre-approval to delivery, contact us to today for more help.

Mortgage Glossary: Open Mortgage

Open mortgages are more flexible than closed mortgages, allowing increased regular payments and lump-sum payments without penalties. Despite higher interest rates, they can save money in situations like expecting a financial windfall or needing to sell the home early. However, exiting an open mortgage might incur an administration charge, so understanding the terms is crucial. Pros include no penalties for payment increases or lump-sum payments and potentially cheaper refinancing. Cons include higher interest rates compared to closed mortgages.

What is the CMHC saying about real estate pricing? According to a new report, they’re predicting that home prices could reach peak 2022 levels, helped by the predicted BoC rate decrease. By 2026 the expectation is to have a strong growing home market because of strong government incentives, mixed with the interest rates back at reasonable levels for builders to continue with home development.

Mortgage Rate Monday!

Checking in with institutional mortgage rates we are looking at the 5-year fixed-rate mortgage and the best rates available. We’re still seeing a sub-5 % rate because of the government bond yields, likely to decrease if we see a rate drop from the Bank of Canada.

Rates provided by rates.ca, based on top Ontario mortgage rates on April 22

We often look at real estate and mortgage rates, but the thing we don't often see is these effects on rental pricing. Recent reports out show that the year-over-year rental rates are up 8.8% from last on all rental types. This is the effect of the overall realized price of home price is what has driven the increase in rental rates. Just recently the government has introduced legislation aimed at allowing rental payments to help credit scores for future home purchases.

Mortgage Glossary: Reverse Mortgage
A reverse mortgage is a loan for older homeowners that allows them to access their home equity without selling the property. Payments from the lender can be received as a lump sum, monthly installments, or a line of credit. Unlike traditional mortgages, there are no monthly payments required, and the loan becomes due when the homeowner moves out, sells the home, or passes away. It's crucial to carefully consider the terms, costs, and potential impact on inheritance before opting for a reverse mortgage.

CURRENT HOME OWNERS! Are you less than a year away from you’re its time to reach out.
We'll compare rates, discuss your financial goals, and explore payment options like accelerated schedules. With built-up equity, we can also look into accessing funds for home improvements or investments. Our experts will review and renegotiate terms to fit your current needs. Contact us today for a personalized consultation and a smooth renewal process!

What does the re-introduction of the 30-year mortgage mean for Canadians?
The goal of this initiative is to get back on pace with making homes more affordable, there hasn’t been a 30-year amortization since 2012. This will likely push more buyers into the market and drive prices, but not likely with huge significance, however, it should be a net benefit for getting new buyers into the qualifying range.

Let’s take a look at the London/ St. Thomas Real estate market indicators from March.
Taking a look at a few KPIs for March of 2024 is looking on par or worse, based on sales activity, average price, and months of inventory.

Are you in the market for a home? An investment property or any type of mortgage? The Mortgage Network London team is able to accommodate all types of mortgages, traditional, B- Lending and even specializing in private financing solutions. Whatever you need, or wherever you are on your real estate journey, please don’t hesitate to reach out!

Bank of Canada Rate Announcement!
No change in key interest rates, something that won’t be particularly surprising to many who have been following along won’t find surprising. Unless inflation rates start climbing we won’t likely be seeing a climbing interest rate, however, the door was left open for a rate cut in June.

As spring approaches in Ontario, the temperature of the real estate market is up for debate. Traditionally, spring brings a surge in activity and potentially higher prices. However, there's some uncertainty surrounding the 2024 season. Experts are keeping an eye on a few key factors: an uptick in listings and sales in February and March, inventory levels (high inventory could favor buyers, low could benefit sellers), and the potential decrease in interest rates, which can significantly impact buyer enthusiasm. These are the indicators, they’ll be following to gauge whether the 2024 Ontario spring real estate market will be hot or cold.

Mortgage Rate Monday!

This week we are back looking at the top Ontario rates for the 5-year variable rate, this week coming in at 6%. This is a continued sign that we expect rates to decline rather than increase over the long run. Although it won’t likely come at the next BoC, if things stay consistent economically we could see a rate drop within the quarter.

Rates provided by rates.ca, based on top Ontario mortgage rates on April 8