Interest Only!
I just received exciting news from CMHC (Canadian Mortgage and Housing Corporation). CMHC provides mortgage loan insurance to lenders, enabling home buyers access to mortgages with as little as 5% down. They have just made several announcements that increase the accessibility of home ownership. The first announcement is that the application fee of $165 to $235 has been eliminated. While there is still a premium charged for CMHC insured mortgages, this does reduce the cost. The second announcement is that CMHC will provide mortgage insurance to lenders that will allow borrowers with a proven credit history to make interest only payments for up to the first ten years, when they purchase or refinance their home. Finally, CMHC has introduced insurance for loans of extended amortization periods up to 35 years.
These announcements come on the heals of stats released by The Canadian Real Estate Association that saw the national average house prices and sales activity, break records. CREA chief economist, Gregory Klump states "Sales activity continues to run high, despite rising interest rates and home prices. This shows how additional full time job growth, rising incomes and resilient consumer confidence are working together to keep housing demand strong" Recent price increases are resulting in a growing shortage of lower priced resale homes. Hopefully with the new CMHC products introduced today more buyers will be able to get into the market. If you need more info on these mortgage products and how they could enable you to purchase real estate I would be happy to set you up with my team colleague, Jill Garcia RBC Mortgage Specialists. She will be able to figure out what products would best suit your needs and your real estate goals.