How to Handle the Increasingly Complex Canadian Mortgage Market

Hi there, and welcome back to the Mortgage Studio Blog! It’s been officially spring for about a week now, but the spring housing market already seems to be in full bloom! This is traditionally the busiest time of year for anyone involved with houses – real estate brokers, mortgage brokers like myself, and most importantly, the homeowners and home buyers looking to find their new perfect place. As exciting as that always is, it can also be frustrating – because buying a home and finding the right mortgage can be a lot of hard work! This has always been the case, but a sweep of new mortgage regulations this past year has made things more complicated than ever.

In October 2016, the federal government announced new mortgage financing rules that subject all insured borrowers to a mortgage rate stress test against the Bank of Canada’s unrealistically high 5-year fixed rate, reducing the purchasing power of all Canadians looking to buy a new home. In December, the Office of the Superintendent of Financial Institutions (OSFI) introduced a wholly new framework for the capital requirements for federally regulated mortgage insurers, meaning that home buyers looking to secure a mortgage have to verse themselves in new rules for lending and borrowing in order to understand how their loans will play out over the next 30 years of their lives. Additionally in December, in B.C. specifically, a new Home Owner Mortgage and Equity Partnership program was launched whose potential effects could include increased consumer debt and the risk of rising home prices. Finally, the Canada Mortgage and Housing Corporation (CMHC) increased its homeowner mortgage loan insurance premiums just a couple weeks ago, on March 17, affecting anyone applying for a mortgage from that date forward.

Whew. That’s a lot of change to process, and not a lot of time to do it!

This represents an important truth about the Canadian mortgage industry: it’s complicated, and it’s always evolving. I say that as someone whose job is to understand every nuance of this industry; simply following and comprehending the changing landscape of regulations makes for a full time profession! And while I love the work I do, I know that the mortgage industry can seem overwhelming to the average home buyer, who simply wants to find a fair loan at a fair price that fits their life and future expectations. Everybody deserves that, right?

I certainly believe they do, and that’s why I’m so passionate about my work as a mortgage broker. As Dan Putnam puts it:

“The more complicated the mortgage market gets, the greater the need for homebuyers and homeowners alike to lean on the expert advice of a professional mortgage expert.”

That’s what you get when you call me: knowledgeable, professional advice that’s custom-tailored to your unique situation. It’s becoming more and more difficult to negotiate a proper mortgage on your own, and that’s being reflected in the growing number of Canadians calling on mortgage brokers (per the 2016 CMHC Mortgage Consumer Survey, market share among first-time home buyers is at 51%).

So if you find the mortgage landscape daunting – you’re not alone. Luckily, the solution to this is not only tried and tested but deadly simple: enlist the help of a professional mortgage broker who can handle the complexity on your behalf. I’ve been doing this for 27 years in Squamish, B.C., and my company The Mortgage Studio has a downtown office that’s open late and on weekends. My number is 604.892.4647, and my phone is always on. Last but not least, I get paid directly by my lenders, so utilizing my years of experience and thorough understanding of the mortgage industry doesn’t cost you a dime.

Now that’s what I call simple. Have a great week, and enjoy the sunshine!

Michele Ellis – Senior Mortgage Broker, The Mortgage Studio

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