Mortgage Market Alert in Canada
Canada’s mortgage market is gearing up for a wave of renewals in the next two years, with the Office of the Superintendent of Financial Institutions (OSFI) flagging the risks posed by persistent high interest rates. Borrowers with variable-rate mortgages, especially those in negative amortization, are of "specific concern."
The Canada Mortgage and Housing Corporation (CMHC) estimates the 25-year average for a five-year fixed mortgage rate at 5.21%. “Rates aren’t terrible from a historical perspective,” Alex said. “We need to recalibrate expectations – mortgage rates in the 4-5% range will be the new normal.”
The Canada Mortgage and Housing Corporation (CMHC) estimates the 25-year average for a five-year fixed mortgage rate at 5.21%. “Rates aren’t terrible from a historical perspective,” Alex said. “We need to recalibrate expectations – mortgage rates in the 4-5% range will be the new normal.”
Key Points:
- 44% of mortgage holders accepted the initial rate offered during their last renewal.
- Only 8% “significantly” negotiated their new rate.
- Mortgage brokers must provide comprehensive services to guide clients through economic uncertainty.
- Swivel Mortgage’s client base: 50% on the A side, 30% on the B side, and 20% in the private mortgage space.
- Many are shifting to alternative lenders due to mounting affordability challenges.
I emphasizes the importance of getting a second opinion on renewal offers to ensure competitiveness and avoid leaving money on the table. A good broker will help find the best options and guide clients through these turbulent times.
Alexander Gasenko - your trusted Toronto & GTA mortgage broker. Dominion Lending Centres Maple Mortgage Group Independently Owned & Operated — FSRA# 13415
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