CMHC fee increases could add hundreds of dollars to mortgage cost
CMHC is to triple the charges it makes to some financial institutions. The fee increases will be for guaranteeing loans in the mortgage-backed securities market, which the agency operates under the National Housing Act. Some experts are predicting that the hike in fees will filter down to homebuyers with the likelihood of a few hundred dollars being added to the cost of a mortgage. The fee for mortgages with a five-year maturity will rise from 0.2 per cent to 0.6 per cent. The move could however benefit smaller lenders as for annual mortgage guarantees below $6 billion the new rate will be 0.3 per cent.
November turns cooler, even in the hottest markets
House prices were down by 0.3 per cent nationwide in November with cooler conditions even blowing through Calgary and Toronto. The latest Teranet-National Bank Home Price Index shows that eight of the 11 major Canadian markets saw prices easing and the national decline was the first for a year. The lowering prices range from 1.6 per cent in Halifax to 0.2 per cent in Calgary. Year-over-year prices of course are a different story; Calgary up 9.2 per cent; Toronto up 7.3 per cent; Hamilton up 7 per cent; Edmonton up 6.2 per cent; Vancouver up 5.9 per cent. The report notes that the slight decline in prices over a month does not detract from the markets where prices are still at near-record levels and the bank expects that it will only really change when interest rate rises put pressure on affordability.
CMHC sheds 215 jobs
The Canada Mortgage and Housing Corporation is cutting 215 jobs at its head office in Ottawa and regional offices. The roles have been declared surplus by the agency and will come from its mortgage loan and statistics teams, however there will be additional jobs in risk management and IT meaning only a small net loss. The changes are the result of restructuring designed to make the agency more efficient.
Scotiabank breaks from the pack with interest rate prediction
Most economists forecast that the first interest rate rise will be in the second half of 2015, possibly in the fall. However Scotiabank is sticking to its prediction that rates will stay lower for at least another year, with the first increase not happening until the beginning of 2016. In fact the bank’s economist Derek Holt says there could even be a cut in the rate next year.