Mortgage Rates

Newest in Mortgage Information: Canadians Say Low Curiosity Charges to Blame for Excessive Dwelling Costs

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More than three-quarters of Canadians (77%) believe suburban and rural home prices have soared to unsustainable levels, and most believe the extremely low interest rates are to blame.

According to a survey by Zoocasa, 8 in 10 people say the low cost of borrowing is responsible for the recent rise in property prices.

The results show disagreement about the impact of low interest rates, with 47% believing it has increased affordability, while 34% disagreeing with this statement.

The survey also found that over a third (38%) think that low interest rates have influenced their desire to buy a property.

With the average home price in Canada exceeding $ 661,000 in July, according to the Canadian Real Estate Association, buyers need ever higher incomes to afford their purchase. The Zoocasa survey found that half of shoppers (50%) had a household income of over $ 100,000, while 32% reported a household income of less than $ 100,000 and another 20% reported a household income of over $ 160,000.

In terms of demographics, millennials (born between 1981 and 1996) are the largest cohort of first-time buyers. The next largest segment was Gen X (1965-1980) with 23% and Baby Boomers (1946-1964) with 6%. Only 3% of Gen Z (1997-2012) identified themselves as first-time home buyers.

Online home sales auctions are a thing now

An Ottawa-based start-up brought the concept of online auctions to Canadian property sales.

Unreserved, which aims to reinvent the way of buying and selling homes, recently launched its auction platform.

“Our plan is to have a transparent, real-time process that begins with the red carpet rolling out for buyers,” said CEO Michael Ryan O’Connor in the company’s promotional materials. “Our goal is to build buyer confidence by providing complete transparency at every step of the process. By eliminating the 4-5% commission paid by sellers, this essentially enables buyers to pay less and sellers to keep more. “

O’Connor added that using his platform, buyers can see the other bids, meaning they won’t overpay tens of thousands of dollars in a blind bidding process.

“We looked at the current environment, blind bidding, preventive bullying, no home inspections and said it was time to bring transparency to the whole process,” noted O’Connor.

The company is testing its platform in Ottawa, but plans to expand to other cities in the future.

National Bank invests 103 million US dollars in Flinks

The National Bank of Canada announced that it has invested $ 103 million in Flinks, a Montreal-based fintech company that enables companies to connect to their clients’ financial accounts.

Flink was recently launched in the United States and this investment will allow it to continue growing to “provide tools for asset managers, credit unions and banks to innovate with financial data in North America,” the company said.

“Using financial data today still requires technical know-how,” said Yves-Gabriel Leboeuf, CEO of Flinks. “We want to enable service providers of all sizes to use financial data to achieve positive results for their customers.”

Updates from FSRA

The Financial Services Regulatory Authority of Ontario (FSRA) said it had asked for feedback on its proposed license exemption for certain companies involved in mortgage transactions.

The exception would apply to selected companies that do not deal with individual consumers. The move is part of the agency’s work – in collaboration with industry partners and the Treasury Department – to implement the proposed Mortgage Brokerages, Lenders and Administrators Act, 2006 recommendations, based on a 2019 government review.

Visit the FSRA website to review the proposed guidelines and submit your feedback by October 8, 2021.

The FSRA also recently unveiled a new criminal background verification process as part of their mortgage broker license applications.

The FSRA must outsource criminal reference checks to stay compliant with the Police Record Checks Reform Act (PRCRA). Among other things, there is a $ 40 fee for this process and the applicant must have the Canada Police Information Center (CPIC) verified by an approved third party criminal record verification provider. To learn more, click here.

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