December 15th, 2024

Insured mortgage cap is being raised from 1 million to 1.5 million for people that wish to put less than 20% down.

If the cap on insured mortgages increases from $1 million to $1.5 million, this could significantly impact the housing market. Here are some potential effects: 

• Increased Access to Financing: Buyers looking for higher-priced homes will have more access to insured mortgage options, making it easier to finance larger purchases. 

• Market Dynamics: This change could stimulate demand in the higher-end market, potentially driving up prices in certain areas. 

• Encouragement for Buyers: With a higher cap, buyers may feel more confident entering the market, knowing they can secure favorable financing for larger homes. 

• Potential Risks: While it may help some buyers, it could also increase risks for lenders if higher loan amounts lead to more defaults in economic downturns. 

• Impact on Affordability: While this change could assist some buyers, it might also contribute to affordability challenges in competitive markets, as higher limits could lead to increased competition and prices. 

1.5 million dollars required $300,000 down and under new rules buyers can purchase with $125,0000 down as a minimum.  Calculating downpayment is 5% of the first $500,000 and 10% of the remainder.  Standard insurance premiums apply and are added to the mortgage based on downpayment.  If a first-time buyer, the client is allowed to take a 30-year amortization for an additional .20% insurance premium. That is a home purchase with $175,000 less downpayment! 

First Time Buyers can amortize their financing over 30 years from 25 years.

If first-time buyers are allowed to use 30-year amortizations after December 15, 2024, this could have several significant implications: 

• Lower Monthly Payments: A longer amortization period typically means lower monthly mortgage payments, making homeownership more accessible for first-time buyers. 
• Increased Affordability: With lower payments, buyers might qualify for larger loans, which can help them purchase homes in more competitive markets. 
• Longer Loan Terms: While this offers short-term relief, buyers should be aware that extending the amortization period can lead to paying more interest over the life of the loan. 
• Financial Planning: First-time buyers might have more flexibility in budgeting and financial planning, allowing them to allocate funds to other priorities. 
• Market Impact: Increased affordability could boost demand among first-time buyers, potentially driving up home prices if supply doesn’t keep pace. 

A $850,000 house purchase with a minimum down of $60,000 has a payment of $4451.91 on 25 years and $4050.59 on 30 years.   The payment difference is $401.32/month and income required to purchase this house is $10,000 less for the 30-year amortization.  Allowing families with disruption to income due to maternity leave, a bit more wiggle room in qualifying for a home purchase. 

Staying informed about these changes and their implications is essential for both buyers and the market overall! If you have specific questions or need more information, let me know!  Call or email me if you wish to discuss how the rules can help you purchase! 

WATERLOO REGION, ON (September, 2024)

Real Estate Update: 

In August, a total of 539 homes were sold in the Waterloo Region via the (MLS) System of the Cornerstone Association of REALTORS  This represents a decrease of 5.3 per cent compared to the same period last year and a decline of 24.1 per cent compared to the average number of homes sold in the previous ten years for the same month.

“Despite a cooling market, detached homes continue to see strong demand, reflected in a 6.0 percent increase in sales year-over-year,” says, spokesperson for the Waterloo Region market area. “With home prices showing stability in recent months and interest rates decreasing, we saw some home buyers finally come out from the wings to take advantage of the summer slowdown to seek out specific property types, like single-family homes.”

Total residential sales in August included 335 detached homes (up 6.0 per cent from August 2023), and 103 townhouses (down 22.6 per cent). Sales also included 60 condominium units (down 18.9 per cent) and 40 semi-detached homes (down 11.1 per cent).

In August, the average sale price for all residential properties in Waterloo Region was $769,203. This represents a 1.1 per cent increase compared to August 2023 and a 1.7 per cent decrease compared to July 2024.

The average price of a detached home was $889,085. This represents a 0.8 per cent increase from August 2023 and a decrease of 2.7 per cent compared to July 2024.

The average sale price for a townhouse was $611,164. This represents a 7.5 per cent decrease from August 2023 and a decrease of 1.5 per cent compared to July 2024.

The average sale price for an apartment-style condominium was $457,075. This represents a decrease of 5.8 per cent from August 2023 and a decrease of 7.7 per cent compared to July 2024.

The average sale price for a semi was $654,070. This represents a decrease of 2.8 per cent compared to August 2023 and a decrease of 1.9 per cent compared to July 2024.

The average time it took to sell a home in August was 25 days, which is three days longer than the previous month. In August 2023, it took 19 days for a home to sell, and the five-year average is 19 days.

Market is heating up in September due to recent rate reductions, call us to start your shopping and move this fall!!! 

How To Pay Off Your Mortgage Faster: 

When it comes to homeownership, many of us dream of the day we will be mortgage-free. 

While most mortgages operate on a 25-year amortization schedule, there are some ways you can pay off your mortgage quicker! 

Did you know? There are a few ways you can help pay off your mortgage faster, such as with an accelerated bi-weekly payment schedule, increasing your monthly mortgage payments to pay more to the principal, making extra payments on your mortgage, negotiating a better rate, or refinancing to a shorter amortization period! 

Let’s look at the options and how they work: 

• Review Your Payment Schedule: Looking at your payment schedule can make it easy to start paying down your mortgage faster, such as moving to an accelerated bi-weekly payment schedule. While this will lead to slightly higher monthly payments, the overall result is approximately one extra payment on your mortgage per calendar year. This can reduce the total amortization by multiple years, which is an effective way to whittle down your amortization faster. 
• Increase Your Mortgage Payments*: This is another simple change you can execute today to start having more of an impact on your mortgage. Most lenders offer some sort of pre-payment privilege that allows you to increase your payment amount without penalty. This payment increase allowance can range from 10% to 20% payment increase from the original payment amount. If you earned a raise at work, or have come into some money, consider putting those funds right into your mortgage to help reduce your mortgage balance without you feeling like you are having to change your spending habits.  
• Make Extra Payments*: For those of you who have pre-payment privileges on your mortgage, this is a great option for paying it down faster. The extra payment option allows you to make an annual lump-sum payment of 15-20% of the original loan amount to help clear out some of your loans! Some mortgages will allow you to increase your payment by this pre-payment privilege percentage amount as well. This is another great way to utilize any extra money you may have earned, such as from a bonus at work or an inheritance. 
• Negotiate a Better Rate: Depending on whether you have a variable or a fixed mortgage, you may want to consider looking into getting a better rate to reduce your overall mortgage payments and money to interest. This is ideally done when your mortgage term is up for renewal and with rates starting to come back down, it could be a great opportunity to adjust your mortgage and save! This may be done with your existing lender OR moving to a new lender who is offering a lower rate (known as a switch and transfer). 
• Refinance to a Shorter Amortization Period: Lastly, consider the term of your mortgage. If your mortgage is coming up for renewal, this is a great time to look at refinancing to a shorter amortization period. While this will lead to higher monthly payments, you will be paying less interest over the life of the loan. If you’re interested in this, connect with me today so we can calculate if it is worthwhile for you to take advantage! Knowing what you can afford and how quickly you want to be mortgage-free can help you determine the best new amortization schedule. 

*These options are only available for some mortgage products. Check your mortgage package or reach out to me, your Kitchener and Waterloo Mortgage Broker, to ensure these options are available to you and avoid any potential penalties. 

If you’re looking to pay your mortgage off quicker, don’t hesitate to call me to go over your options in more detail today!  [email protected] or 519-576-4869 

Cutting Energy Costs: 

In the last decade, climate change and energy efficiency have become top of mind for many Canadians. 

From wanting to do our part by recycling to making our home as energy efficient as possible, there are so many benefits to being environmentally and energy conscious. 

If you are looking to cut costs or simply want to reduce your eco-footprint, here are some great ways to cut your energy costs: 

• Get a Smart Thermostat: A pretty easy installation, a smart thermostat can help you better manage your in-home temperature. Whether you opt to install a basic programmable thermostat or try Google's Nest, which learns from you and works to predict which temperatures you prefer and when, getting a read on your in-home temperature can help you better manage your energy usage. 
• Look for Drafty Spots: When it comes to heating your home, it can quickly become a wasted effort and results in extra costs if you have drafts in your home. In addition to windows and doors, you should also seal any folding attic stairs, add a fireplace plug to seal the damper and install a dryer vent seal to reduce drafts in your laundry room. 
• Swap to LEDs: Most of us are already using LED bulbs throughout our home. If you aren't yet, now is the time to make the switch! LED bulbs use 15% less energy than an equivalent incandescent, which can save you a ton of money each month especially in larger homes. 
• Turn Down Your Water Heater: While sometimes nothing beats a good scalding shower, you don’t want to be burned with a high energy bill. Did you know if you knock down that temperature gauge by just 10 degrees, you can save 3% to 5% on your bills each month!? 
• Examine Your Appliances: Since 1992, ENERGY STAR® has been backing energy efficient appliances and products, helping consumers make the right choices. Some of the least green appliances in your home are your dishwasher, washing machine, dryer and refrigerator and, if you don't currently have Energy Star certified versions of these machines, swapping to them is a surefire way to reduce your monthly expenses.  

Can't afford new appliances? Here are some other tips and tricks to help make them more efficient in the meantime: 

• Dishwasher: Use a citric acid-based cleaner in an empty cycle to rid your dishwasher of excess soap and calcium buildup that may be causing your machine to work harder. 
• Washing Machine: Maximize energy by stuffing your machine to the brim whenever possible as washing machines typically use the same amount of energy regardless of load size. 
• Dryer: For starters, ensure you are always cleaning out your lint filter to increase air circulation. In addition, keep an eye on the outside exhaust and clean when needed to reduce drying time and save energy. 
• Refrigerator: While most of us are more concerned with the food inside our fridges than the parts, it is important to check your condenser coils. Over time, dirt, food particles and dust can collect and reduce efficiency. Another tip is to set your refrigerator to 2-3 degrees Celsius. 
• Close The Blinds: When the temperature starts heating up, it is important to close the blinds and drapes to prevent the sun from beating in and warming up your home. The excessive heat makes your air conditioner work overtime causing your energy bills to skyrocket. 

In addition to the cost savings and environmental benefits of improving your energy efficiency, CMHC also has a rebate available! The CMHC Eco Plus refund can provide a 25% partial premium refund if you’re CMHC insured and buying or building an energy-efficient home!  You may be eligible for a rebate with any of the 3 insurers, contact us to find out more if you would be eligible!  [email protected] 519-576-4869 

Effective August 1st, 2024, new program to help new buyers:

The Department of Finance will now allow homeowners purchasing a newly built property and who meet First Time Home Buyer (FTHB) criteria, the option of a 30-year amortization for insured mortgages. 

• Insured loans only, 80.01-95% LTV 
• New Purchases closing after August 1st  
• At least one borrower to be a First Time Buyer
• The borrower has never purchased a home before; or 
• In the last 4 years, the borrower has not occupied a home as a principal place of residence that either they themselves or their current spouse or common-law partner owned; or 
• The borrower recently experienced the breakdown of a marriage or common-law partnership. 
• At least one borrower must occupy the property 
• Eligible Properties: 1 – 4 Units 
• Owner Occupied or Partially Owner Occupied 
• Newly built homes and condos ONLY 
• Insurer Premium – surcharge of 0.20% applicable to loans where amortization is >25 years. (80-85%-3%) (85.1-90%-3.3%) (90.1-95%-4.2%) 
• Eligible loan type – Purchase, Purchase Plus Improvement, Port/Replacement 
• Ineligible loan type – Small Rental and Secondary Home Programs 

Unfortunately, this program does not allow extended amortization for resale homes, just newly built homes.  Ask us, your Kitchener Mortgage Broker, Bennett Capital Group, for a quote to see if this allows you to get into a new home!  Your Pre-Approval Specialist will discuss in more details for you!

Bank of Canada Cuts Interest Rates! What does that mean for consumers? 

The Bank of Canada has lowered its key interest rate by a quarter of a percentage point to 4.75%, the first cut in more than four years. Here’s what it could mean for your finances. The banks turned around and lowered their prime rate from 7.2% to 6.95%.

If you have a variable or floating rate mortgage or line of credit, this is good news for you but for fixed mortgage holders, it has no impact. 

What does it mean for your Mortgage? 

The lowering of prime will immediately affect borrowers with variable-rate mortgages, or floating rate secured lines of credit. 

Fixed mortgage rates are determined by the bond market, which could be affected by the Prime rate change, and is based more overall on investor confidence. Currently, the bonds are not showing signs of easing, so fixed rates will not drop. 

This means to not expect to see your 4.99% mortgage rate drop .25% like prime has change. The fixed rates have not been adjusted today and will only be adjusted if bonds change. 

How much does it affect your payments on your variable mortgage? 

A quarter point cut to a $500,000 variable mortgage with a 6.5% rate to 6.25% will change the mortgage payments by $75/month.

Kitchener Waterloo Market for June 2024: 

The first months of 2024 are behind us, but signs are emerging that the housing market activity could pick up steam as expectations grow for further rate cuts from the Bank of Canada. The listing counts are up so the inventory is up! If the demand doesn’t pick up, there will be good deals as it will turn into a buyers' market.

The Waterloo Region Association of Realtors update up to May:

There were 1,644 new listings added to the MLS® System in Waterloo Region last month, an increase of 28.9 per cent compared to May last year and a 15.8 per cent increase compared to the previous ten-year average for May.

The total number of homes available for sale in active status at the end of May was 1,741, an increase of 95.8 per cent compared to May of last year and 27.9 per cent above the previous ten-year average of 1,361 listings for May.

Market-wide inventory levels were up 93.8 per cent, with 3.1 months’ supply for all property types at the end of May. The property type that gained the most inventory was the condo apartment segment, which increased by 100 percent. That amounts to 6.0 months’ supply for condo apartments, 2.4 months for detached homes, and 3.6 months for Townhouses.  The number of months of inventory represents the amount of time it would take to sell off current inventories at the current sales rate.

The average number of days to sell in May was 16, compared to 14 days in May 2023. The previous 5-year average is 15 days.  

There are many deals to be had this month, that won’t be around come the summers as prices and demand will increase. Those that want to buy should be looking now and shop within their approval limits and not worry about the rates but concentrate on the payments.  

Let us help you work on planning your next move, call us to review!