Should brokers in these markets be worried?

Desjardins Group Economic Studies released a statement on Tuesday declaring the Canadian housing market is less affordable than the average affordability of the last 25 years, citing the average home prices across the country are eclipsing household income – due, in part, by a rush to buy prior to interest rate hikes.

Mortgage rates during the summer hurried buyers; many took action out of fear that mortgage rates would climb even higher,” the statement said. “Even if the coming months bring more increases; they won't be enough to trigger a significant dip in affordability.”

Most markets, however, are still affordable… outside Quebec and the Toronto, that is.
“Despite a decline in nearly all Ontario CMAs, most markets are still affordable. Toronto is an exception, where the average home price is $527,821, well above that observed in other agglomerations in the province,” the report stated. “The Desjardins Affordability Index is only slightly under the historical average in Calgary, despite relatively high home prices ($438,793 in the third quarter).”

And although housing prices may be lower in hot Quebec markets, they are still considered less affordable than their more expensive counterparts in BC; due to the average income disparity.

“Sherbrooke and Quebec City rank alongside Vancouver as some of the least affordable agglomerations in the country,” the report said. “Even though housing prices are much lower than on the west coast, incomes in these two CMAs are considerably lower, making home purchases more difficult.”

However, the Quebec-based financial services conglomerate reports its home province is experiencing a teeter-totter of sorts; with a lowering in prices in some markets being cancelled out by rising prices in others.

“Rising prices are losing steam in the Quebec City market while prices in Montreal are starting to edge down,” according to the report. “Prices continue to rise, however, for single-family homes, whose market is balanced, overall. Housing prices continued to climb in Gatineau, Sherbrooke, Saguenay and Trois-Rivières, affordability thus deteriorated in the third quarter.”

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

5 ways to pay off your mortgage faster

Want to get relieve yourself of mortgage stress? Check out our tips for paying off your mortgage faster and saving more money.

Purchasing a home is a major accomplishment, but paying off your mortgage as early as possible will be the best investment you can make. A 2010 Canada Mortgage and Housing Corporation (CMHC) survey indicated that 68 per cent of recent homeowners felt there was a strong chance they could pay off their mortgage earlier than their current amortization schedule, and 27 per cent have either made additional lump sum mortgage payments or have increased their regular payment amounts.

How to pay off your mortgage faster
Ready to save some serious money? Here are a few easy ways you can pay off your mortgage faster:

1. Accelerated bi-weekly payments
Instead of paying your mortgage on a monthly basis 12 times per year, pay your mortgage every two weeks for a total of 26 payments each year.

Example: A $300,000 mortgage paid on a monthly basis with a 3 per cent interest rate over 25 years will cost you $125,920.44 in interest. However, if you increase your payment frequency to accelerated bi-weekly payments, you will shave nearly three years off of your amortization schedule, and save $16,058.57 in interest.

2. Round up your mortgage payments
Make no mistake: Every dollar counts when it comes to paying off your mortgage. The quicker you can pay off your loan, the more you will save in interest. A painless way to make your mortgage disappear faster is to round up your mortgage payments. So if your accelerated bi-weekly mortgage payments are $543, consider rounding up to $600 instead. The extra $57 will do wonders for your mortgage and chances are you will barely notice a difference in your monthly budget.

If you receive a raise, instead of increasing the cost of your lifestyle in the short term, consider throwing the extra amount you make onto your mortgage instead.

Example: Bi-weekly payments on a $230,000 mortgage with a 2.75 per cent interest rate over 30 years would be $468.53. Increase those bi-weekly payments by just $31.47 to $500, and you’ll shave nearly six years off of the amortization schedule.

3. Put ‘found’ money towards your mortgage payments
Unexpected sources of money such as a birthday cheque from a relative or a bonus at work are considered sources of ‘found’ money.

'Found' money can be easily applied to your mortgage without any impact to your budget because it wasn't money you were expecting or counting on.

Consider increasing your RRSP contributions, and then put your tax refund directly towards the principal of your mortgage.

Example: A one-time payment of $5,000 on a $250,000 mortgage at 3.75 per cent over 30 years will decrease your mortgage amortization by over 12 months.

4. Make a lump sum anniversary payment?
Most banks will allow you to make an extra mortgage payment each year, which is applied directly to the principal. Taking advantage of this by making a lump sum payment — even if it’s as small as $50 a year — is a great way to chip away at your mortgage.

Example: An annual lump sum payment of $250 on a $400,000 mortgage at 3.50 per cent over 25 years, combined with a bi-weekly payment frequency will decrease your mortgage amortization by over 3.5 years.

5. Stay informed
Once you have a mortgage and start making your payments, it can be easy to just forget about it because it’s an automatic payment. But don’t stick your head in the sand. To be an informed homeowner, you need to keep up-to-date on interest rates and new mortgage options. You could potentially save a ton of money just by understanding what your options are.

Example: Let’s say that interest rates have dropped since you took out your mortgage a few years ago, but you are in the middle of a five-year fixed term with your bank. By understanding what the penalties are for breaking your mortgage, and reapplying for a lower interest rate, you could potentially save thousands of dollars over the long run.

While paying down your mortgage early will mean less interest paid over the lifetime of the loan, and a shorter amortization schedule, it’s not always the best decision for every homeowner. For example, if you have high interest debt on a credit card, no emergency fund savings, or haven’t started saving for retirement yet, the interest you would save on your mortgage will not be as beneficial to you as dealing with other financial issues.??

Armed with information and commitment, these tips will help you pay off your mortgage faster. The freedom that being completely debt-free brings is a dream for many Canadians, so take the time to do some calculations and figure out what options are right for you.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional.

Home Mortgages: Top Tips To Get You The Best Deal

If you're looking into home mortgages, then you surely are excited. It's time to buy a home! However, what you might realize is there is quite a lot of information to take in, and how do you sort all of this out to get to the mortgage company and product that you need? Keep reading to find out how to do this.

Understand your credit score and how that affects your chances for a mortgage loan. Most lenders require a certain credit level, and if you fall below, you are going to have a tougher time getting a mortgage loan with reasonable rates. A good idea is for you to try to improve your credit before you apply for mortgage loan.

Be prepared before obtaining your mortgage. Every lender will request certain documents when applying for a mortgage. Do not wait until they ask for it. Have the documents ready when you enter their office. You should have your last two pay stubs, bank statements, income-tax returns, and W-2s. Save all of these documents and any others that the lender needs in an electronic format, so that you are able to easily resend them if they get lost.

Get pre-approved for a home mortgage before shopping for a new house. Nothing is worse than finding the perfect house, only to find out that you can't get approved for a mortgage. By getting pre-approved, you know exactly how much you can afford. Additionally, your offer will be more attractive to a seller.

If you have been wading through the mortgage world wondering what to do, surely now you have a better idea of the type of mortgage you need. It's up to you to pick the best situation for your largest investment. With the tips that have been provided, you should find yourself doing just that.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional

Ways To Find The Best Home Mortgage Rate

What can I do to get a great mortgage? How can I find low rates I can afford? What should I know before I talk to any lenders? When do I start the process? How can I find answers to all of these questions and more? Read on for expert mortgage advice.

Pay down your current debt and avoid gaining new debt while going through the mortgage loan process. When your consumer debt is low, you will qualify for a higher mortgage loan. High consumer debt could lead to a denial of your mortgage loan application. Carrying debt may also cost you a lot of money by increasing your mortgage rate.

Keep the lines of communication open with your lender, no matter how bad your financial situation may get. Although many homeowners are inclined to give up on a mortgage when the chips are down, the smartest ones know that lenders often renegotiate a loan, rather than wait for it to go under. Call your mortgage provider and see what options are available.

If you can afford a higher monthly payment on the house you want to buy, consider getting a shorter mortgage. Most mortgage loans are based on a 30-year term. A mortgage loan for 15 or 20 years may increase your monthly payment but you will save money in the long run.

Refinancing a home mortgage when interest rates are low can save you thousands of dollars on your mortgage. You may even be able to shorten the term of your loan from 30 years to 15 years and still have a monthly payment that is affordable. You can then pay your home off sooner.

Now do you have all of the answers to your questions? We hope that the content posted here has been helpful and will assist you in the mortgage application process. Continue reading articles just like this one to be sure that you know all you need to before you begin.

Visit Dominion Lending Centres Mortgage Village to consult a mortgage professional