New data finds Canadians more optimistic about debt, personal finances

Latest News & Economy DAZADA DIAMOND 31 Aug

New data finds Canadians more optimistic about debt, personal finances

New data finds Canadians more optimistic about debt, personal financesIn defiance of pandemic-driven fears, Canadians are becoming more hopeful about their long-term financial prospects, according to the latest edition of the quarterly MNP Consumer Debt Index.

After reaching a historic low when the coronavirus outbreak first took hold of the Canadian economy, households’ confidence in their purchasing power has strengthened amid sustained federal assistance.

“The fact that many Canadians are more optimistic or even hopeful about their personal debt situation is likely a result of the pandemic relief measures,” said Grant Bazian, president of MNP LTD. “But it could also be the result of Canadians comparing their own circumstances to what is playing out in other parts of the world.”

During the second quarter, the number of Canadians who said that they can cover their living expenses for the next 12 months without incurring further debt has gone up to 61%. Another 43% of respondents said that their current debt loads are better compared to pre-pandemic levels, while 27% said that their debt situation is better than it was last year.

The proportion of Canadians who said they were $200 or less away from insolvency fell by six percentage points from Q1, settling at 43%.

“Many found it easier to spend less over the last few months since they were required to stay home,” Bazian said. “COVID-19 dramatically altered consumer spending since restaurants, theatres, malls and other bastions of discretionary spending were closed. Even with marginal increases in groceries, utilities and online shopping, many households have reported significant savings which, in some cases, have made them feel more capable of keeping up with previously unsustainable debt payments.”


Have CMHC’s underwriting changes affected business for brokers and lenders?

Latest News & Economy DAZADA DIAMOND 28 Aug

Have CMHC’s underwriting changes affected business for brokers and lenders?

Have CMHCPrior to the implementation of the Canada Mortgage and Housing Corporation’s new underwriting rules on July 1, the industry was abuzz with the news that Canada’s private mortgage insurance providers, Genworth and Canada Guaranty, would not be following suit. Almost a month after the new CMHC guidelines were put in place, they don’t appear to be having much impact on brokers or lenders.

Multi-Prets Mortgages’ broker Linda Tosini says she has experienced no change to her day-to-day operations, as the decision on which insurer a deal is sent to is ultimately made by her lenders.

“If I do know there’s something, I can put it in my notes to the lender and say, ‘He’s not going to fit the 35/39 [CMHC’s new minimum debt servicing ratios],’” Tosini says. But she’s not sending those notes very frequently.

Tosini feels the CMHC changes will force brokers to have a better understanding of their lending partners. Desjardins, for example, primarily uses CMHC. If Tosini needs a lender to help out a client with a 39/44 situation, she knows where not to send it.

“It’s all about knowing your lenders,” she says.

Albert Collu, the recently named CEO of lender Marathon Mortgage Corp, says the CMHC/Genworth/Canada Guaranty split hasn’t made much of a difference to his company either, largely because of CMHC’s new minimum Beacon score requirement of 680.

“I can’t speak to all the books, but a lot of books, if you look at the average Beacon in our space, they’re usually well over 700,” he says.

Taylor Little, CEO of lender Neighbourhood Holdings, says that even though the increased competition in the mortgage insurance space may not impact borrowers significantly – limits on mortgage insurance for properties over $1 million means most owners of detached homes in Toronto and Vancouver can’t get insurance anyway – the two differing, very public views on the market implied by the divergent underwriting approaches can be used as a valuable resource.

“If Canada Guaranty and Genworth thought there was a huge amount of risk in the market, they’d probably be changing their rules as well,” Little says. “They’re signalling something to the market that’s a little different from what CMHC is.”

With price and sales forecasts all over the map and many awaiting July data to determine if June’s sales activity was a blip triggered by CMHC’s looming changes, Little suggests that Genworth and Canada Guaranty’s next moves could be a valuable indicator of market sentiment at a time of unparalleled uncertainty.

“At a very high level, seeing what the private insurers do is going to give a lot of clarity on how they view they market,” he says. “If they continue to hold firm and don’t change their policies to align with CMHC, that would be an interesting sign.”

It’s a strategy Little and his associates at Neighbourhood Holdings have used before.

“We certainly watch what the banks are doing, what the insurers are doing, in terms of adding to our matrix of how we determine our lending guidelines. If you’re seeing everyone clamp down on risk, it’s a really good sign that we, as a lender, should as well,” he says.

While the changes to CMHC’s guidelines haven’t affected her business thus far, Tosini says that’s largely because Canada Guaranty and Genworth are still providing alternative paths for lenders shut out by CMHC. It will be a different story for borrowers with more challenging credit profiles if CMHC’s competitors wind up following in its footsteps.

“Who knows?” Little says. “They could change next week or next month.”


Alberta has the highest mortgage deferral rates in Canada

Credit & Debt DAZADA DIAMOND 27 Aug

Alberta has the highest mortgage deferral rates in Canada

Next highest rates were in Saskatchewan and Newfoundland, tied at 14.8 per cent

Alberta leads the country in mortgage deferrals, according to the CMHC. (Robson Fletcher/CBC)

Around one-in-five mortgages in Alberta remains in deferral, the highest rate of any province in the country, according to the Canada Mortgage and Housing Corporation.

CMHC president and CEO Evan Siddall said in a tweet on Tuesday that as of July, 21 per cent of mortgages in Alberta were deferred.

The next highest deferral rates were in Saskatchewan and Newfoundland, tied at 14.8 per cent.

“Deferrals in oil-producing regions are evidently elevated,” he wrote.

Quebec had the lowest rate at 5.6 per cent.

Siddall said around 11 per cent of all homeowner transactional insured mortgages are in deferral across the country, and that factors like unemployment rates and government supports will play a role in deferrals and house prices going forward.

Low oil prices had already hit Alberta’s economy hard before the coronavirus pandemic.

The Conference Board of Canada forecasts Alberta will see its economy shrink by a historic seven per cent this year.

Justin Havre with RE/MAX says the Alberta deferral numbers don’t come as much of a surprise.

“I think Albertans have gone through some tough times,” said Havre.

“We typically don’t have the opportunity to defer mortgage payments when there is a collapse in energy payments and when the opportunity was available to get mortgages deferred here in Alberta, I think a lot of people took the opportunity to preserve their cash because nobody really knew with this pandemic how long it would go on and what was going to come of it.”

Havre said he would encourage anyone having trouble making payments to be proactive, and speak with their bank and insurer.

“Don’t wait — take action now to find a solution, and if the solution has to be that you put your house up on the market, then you may want to start acting on that now while we have the activity in the marketplace, because our market typically does slow down when snow hits the ground.”

In May, Siddall had warned a House of Commons committee that the country could see a “deferral cliff” when some unemployed people are required to begin paying their mortgages again this fall.


The good and the bad in TransUnion’s recent data

Credit & Debt DAZADA DIAMOND 26 Aug

The good and the bad in TransUnion’s recent data

The good and the bad in TransUnionTwo recent reports released by TransUnion Canada shed new light on Canadian borrowers’ credit usage and their view of their own financial struggles heading into the seventh month of the COVID-19 pandemic.

In its Q2 Industry Insights Report, TransUnion found that while outstanding debt in Canada grew 4.3 percent to hit $1.9 trillion in the second quarter, only two products, installments and mortgages, contributed to the growth.

Installment debt rose by 3.9 percent to hit $175.4 billion, while mortgage debt was up 5.3 percent and now sits at over $1.3 trillion. Total credit card debt, driven by a decrease in holiday and home improvement expenditures, fell by 12.3 percent year-over-year in Q2, declining from $96.4 billion in 2019 to $84.6 billion at the end of June. Auto loan and line of credit debt fell by 3.3 percent and 3.2 percent, respectively, bringing their total amounts down to $62.4 billion (auto) and $248.9 billion (LOC).

According to TransUnion, mortgages were also the only product category to experience an increase in origination volume in the first quarter (originations have a reporting lag of one quarter), surging 29.2 percent year-over-year. Credit card originations, on the other hand, fell by 13.5 percent. COVID-19 played a role, but TransUnion explains that credit card originations had already been declining for several quarters prior to the pandemic due to market saturation. Auto loan originations decreased by an undisclosed amount.

While a decrease in consumer debt is welcomed news, especially with CMHC’s Evan Siddall warning lenders about the potentially damaging impact of high-ratio mortgages, Matt Fabian, director of financial services research and consulting at TransUnion, encourages Canadians not to read too much into the decline.

“It’s probably more a temporary thing that is COVID induced,” Fabian told Mortgage Broker News in an email.

Part of the decline, he explains, was due to record low spending, as consumers had fewer places to spend because of lockdown orders and were postponing larger purchases.

“Some consumers will continue to deleverage as credit fatigue sets in due to the economic impact of COVID-related shutdowns,” Fabian said, adding that seasonal levels of credit usage should return as the economy continues to stabilize.

TransUnion found that the number of consumers with delinquent balances actually fell by 10 basis points during the second quarter, led by a 14-basis point decrease in the credit card delinquency rate. The rate of mortgage delinquencies crept up by three basis points to hit 0.31 percent, while the rate of installment/personal loan delinquencies increased by 14 percent, a surge TransUnion attributes to alternative lenders “who have been slightly more aggressive in issuing personal loans to Below Prime consumers.”

Fabian credits deferral programs and government aid for the overall decrease in delinquencies.

“These seem to have been effective at supporting Canadians through the downturn. As these programs begin to wind down, we expect to see some increase in delinquency,” Fabian said.

TransUnion found that delinquency rates have been corresponding closely with borrowers’ CreditVision scores. Over 15 percent of Subprime consumers (those with scores between 300 and 639) and almost 13 percent of Near Prime customers (640 to 719) have taken a deferral on at least one credit product. For Super Prime consumers (above 800), only 6.1 percent have opted for a deferral.

TransUnion estimates that 2.6 million Canadians had at least one active deferral in Q2 2020.

Consumers’ situations slightly improving
The Industry Insights findings came on the heels of TransUnion’s most recent Financial Hardship Report. The report, based on an August 1-3 survey of 1,050 adults, found consumers to be more confident than at any time since the onset of the COVID-19 pandemic. While a still worrying 53 percent of respondents reported that their household is being negatively impacted by COVID-19, that represents a 10 percent improvement compared to the high seen in April. When asked if they expect to be impacted by COVID-19 “in the future”, only six percent responded yes.

But consumers feeling the bite COVID-19 has taken out of their earnings are experiencing serious doubts about their ability to stay on top of their debts and bill payments. Sixty-two percent of them said they are “concerned” about their ability to meet their future obligations, with credit cards, utilities and rent being the most problematic. Impacted consumers predicted that they will be unable to pay their bills or loans within 7.7 weeks of taking the survey. When that time comes, they expect their budgets to come up short by an average of $877.20.

No surprise, then, that the number of respondents indicating that they plan to make use of programs such as payment holidays or deferrals to help manage their debt loads increased from 10 to 13 percent month-over-month. Twenty-six percent of those reducing or holding off on making their payments said they hope to extend their deferral periods further.

But not everyone is struggling. The proportion of consumers utilizing deferrals or payment holidays shrunk from 18 to 16 percent, and the majority of mortgage (52 percent) and auto loan (54 percent) customers have already returned to making full payments.

When asked if TransUnion is worried by the growth in mortgage borrowing at a time when so many Canadians say they are still being impacted negatively by COVID-19, Fabian expressed little concern.

“There’s always a worry about fall in house prices, but demand will likely keep values high,” he said. “The new stress testing measures introduced in 2018 have been effective in driving down qualifying mortgage values, which should offset some of this concern. Delinquency rates for mortgages remain relatively stable.”


Here’s What Canada’s Mortgage Deferral Cliff Looks Like, And Why Experts Are Worried

Credit & Debt DAZADA DIAMOND 25 Aug

Here’s What Canada’s Mortgage Deferral Cliff Looks Like, And Why Experts Are Worried

Canadian real estate buyers are jumping in head first, since the recession didn’t impact housing. However, since the beginning of the pandemic, experts said no issues would be apparent until the end of the year. The reason is a term only finance and banking nerds have been using – the deferral cliff. The deferral cliff is the expiration of programs that bought distressed owners a few extra months. Until the deferral cliff arrives, we won’t see any of the problems in the housing market. Here’s when it’s coming, and when you should see an impact.

Mortgage Deferral Cliff

The mortgage deferral cliff is when payment deferral plans begin to expire. After the pandemic driven shutdown, Canadian and US governments scrambled to get banks to defer mortgage payments for the unemployed. Starting in April, people without income were allowed to delay payments for up to 6 months. This eliminated the spike in arrears we would normally see during a recession. It also happens to restrain inventory from hitting the market. As the six month deferral period ends, homeowners that aren’t back on their feet, are going to have to deal with their housing woes.

Industry experts warned mortgage deferrals give a false sense of security. Since people haven’t seen any defaults or distressed sales, moral hazard was created. That is, people now think housing markets have no risk. However, this is only temporary. As these deferrals expire, we approach the cliff. Once we get there, a significant number of people that haven’t got back on their feet will start to surface.

Most Canadian Mortgage Payment Deferrals Will Expire In October

Since the longest deferrals are six months, we don’t really see any issues pop up until October. In October, about ~500,000 mortgages should expire. Followed by another 221,000 in November, and a big dip lower to 15,000 in December. There’s a mild bump higher with 24,000 in January, and February won’t be known until the cut off is reached next month.

Canadian Mortgage Deferral Cliff

The estimated number of expirations of payment deferrals for Canadian mortgages.

Oct 2020Nov 2020Dec 2020Jan 20210100,000200,000300,000400,000500,000Mortgages

Month Mortgages
Oct 2020 500,000
Nov 2020 221,000
Dec 2020 15,000
Jan 2021 24,000

Source: Bank filings, Better Dwelling.

Now, don’t confuse the expiration of payment deferrals with a spike in arrears rates. It takes 90 days of non-payment for a mortgage to fall into arrears. This means October’s surge wouldn’t see any contribution to arrears until January. November would be in February, etc… That said, rising arrear rates depend on liquidity.

If you can’t afford your home, what’s the first thing you do? List it for sale. The inability to pay doesn’t always turn into defaults when there’s buyers. Instead, people list their homes for sale and hope it sells and closes before the lender tries to claim it. Unless you’re not all that smart, this is the first thing you would look to do. In which case, we should see a spike in inventory first.

Rising inventory tends to give buyers more options, which turns into longer selling times. When you can’t dispose of your home in a timely fashion, that’s when defaults rise. This would explain why everyone from the CMHC to the Bank of Canada never expected arrears rates to rise this year. Rising inventory is expected later this year, and defaults are forecasted to climb next year.


Insurers: Mortgage deferral extensions not on the table

Latest News & Economy DAZADA DIAMOND 24 Aug

Insurers: Mortgage deferral extensions not on the table

Insurers: Mortgage deferral extensions not on the tableMortgage insurers are not signalling enthusiasm towards the extension of six-month payment deferrals, according to an analysis by The Financial Post.

The socio-economic disruption brought about by the COVID-19 pandemic brought deferrals to the fore as a vital support system for Canadian households that suddenly found their purchasing power severely restricted.

Data from the Canadian Bankers Association indicated that deferrals since March represented approximately 16% of bank-based mortgages, amounting to more than 760,000 borrowers.

However, Genworth Canada said that it forecasted a “vast majority” of six-month deferrals shifting to regular payment schedules very soon – with a significant caveat.

The private-sector residential mortgage insurer “expects that a subset of insured mortgages with payment deferrals will likely end up in default after the deferral period ends,” Genworth said. “As a result, the company and its lenders have plans in place to increase loss mitigation activities to address the increase in reported delinquencies that is expected starting in the fourth quarter of this year.”

Canada Mortgage and Housing Corporation recently said that an extension was not on the table.

“In developing the COVID-19 Default Management Playbook, the insurers did not feel that further extensions were a viable option on a global basis,” CMHC said. “If the borrower cannot be helped with the existing (default management) tools (stable source of some revenue), then there are few options as there are no government programs currently available.”


Thinking about buying a house with friends? Here’s what to consider

Down Payment & Buying DAZADA DIAMOND 21 Aug

Thinking about buying a house with friends? Here’s what to consider

On July 1, the Canada Mortgage and Housing Corp (CMHC) changed the rules around mortgage insurance, making it more difficult for some would-be buyers to qualify for a CMHC-backed loan. And despite the early impact of COVID-19 on housing values, prices bounced back in May and June and remain relatively high. According to a recent Canadian Real Estate Association report, homes in Canada sold for an average of almost $539,000 in June, and of course much more in cities like Toronto and Vancouver.

It’s no wonder some Canadians are considering co-ownership to get into the market or move into a more desirable property or location. But if living with family can be complicated, co-buying with an unrelated party (a friend, for example) is even more complex and could benefit from expert guidance.

We reached out to Dalia Barsoum, president of Woodbridge, Ont.-based Streetwise Mortgages, and Richard Bell, partner at Bell Alliance LLP in Vancouver, to find out how a co-ownership arrangement might differ from a typical purchase. If you’re interested in the idea, here’s what to consider before buying property with a friend or two.

Choose a co-ownership type 

You can co-own a home as joint tenants (similar to a married couple buying a home together) or tenants-in-common. (Usually, the term tenant describes a person who rents or leases property. For an estate owned by more than one person, however, a tenant is a co-owner.) With joint tenancy, each person has an interest in the investment, and if one owner dies their share of the home goes to the other owner(s). In a tenants-in-common arrangement, each tenant owns a portion of the property, which becomes part of their estate when they die. Whether registering as joint tenants or tenants-in-common, all owners on the title will need to sign any mortgage, and there can only be one lender, notes Bell. Barsoum points out that from a lender’s standpoint, every co-owner is 100 per cent liable for the mortgage. So if one buyer defaults or forgets to make a payment, everyone’s credit scores will be negatively impacted.

Agree on the fine print

What if someone wants to rent out their place? What happens when one person wants to sell? These are the types of questions you should review with potential co-owners and attempt to answer in any co-ownership agreement. “When you’re doing contracts, you’re always trying to ask what scenarios can arise and what do you do if things go wrong?” says Bell. “What is the contractual arrangement between the parties?”

Any agreement should also specify the percentage each person has, which — if you aren’t splitting ownership equally — Bell suggests could be calculated based on factors such as square footage and livability differences between each unit, assuming there are separate spaces. If one unit will use more municipal services, for example, a different ratio might make sense.

Beware you may face lending challenges

When working with co-buyers, Barsoum will typically look at each person’s finances before recommending how any deal should be structured. “Sometimes having everyone on title complicates the deal from a financing standpoint and may result in suboptimal financing for the group,” she says. “When two or three people come together [to buy a property], they may be all making money and bringing more income to the table to improve their qualification, but they are maybe also bringing their own debts into the equation.” Buyers’ credit stores will be blended, she explains. If one individual’s score is very low it might affect approval or the type of financing the group gets.

In those situations, it might make more sense to exclude one buyer from the property title. Their interest in the co-ownership can be protected through a separate legal agreement. However, Barsoum notes that some lenders don’t care how the title of a property is split up, whereas others may want everyone to have equal ownership depending on who’s on the application.

Whether or not the parties are related, there are two situations where it may be harder to get approval: when investors want to buy a rental property together and when it’s a larger group of people making the purchase. “Whenever multiple people are going on an application, lenders generally want to know the story,” says Barsoum. “Why are [these] people coming together to buy? And the story has to make sense.” Bell notes that, in his experience, financing can also be a challenge for a tenants-in-common arrangement.

Look for a mortgage with flexibility 

Co-buyers might expect to spend several years living together, but individual circumstances may change sooner than that. “Life happens … someone gets married or has a new job or needs to change location [and] they want out,” says Barsoum. “If they have taken a fixed-rate mortgage, then there is going to be a [larger] penalty.” Barsoum recommends variable-rate mortgages for clients who are getting into co-ownership arrangements because they offer more flexibility and generally have smaller penalties if you need to break your mortgage early.

Don’t forget about government programs for homebuyers

Programs such as the First-Time Home Buyer Incentive can be invaluable. Barsoum notes first-time buyers — whether purchasing with friends, family or a spouse — would be able to benefit from the incentive on their share of the property, even if co-buyers do not qualify.

  • (Credit: iStock/Getty Images)

Home Prices Set New Record High, Sales Surpass Pre-COVID Levels

Latest News & Economy DAZADA DIAMOND 20 Aug

Home Prices Set New Record High, Sales Surpass Pre-COVID Levels

Continuing the upward trend that started in June, home sales bounced back to pre-COVID levels in July, soaring 30.5% year-over-year.

Home prices, too, set a new record high of $571,500, a 14.3% increase from July 2019, the Canadian Real Estate Association reported on Monday. Excluding the higher-priced markets of Toronto and Vancouver, the national average would be $454,500.

“What a difference three months makes, from some of the lowest housing numbers ever back in April to the multiple monthly records logged in July,” said Shaun Cathcart, CREA’s senior economist. “A big part of what we’re seeing right now is the snapback in activity that would have otherwise happened earlier this year. Recall that before the lockdowns, we were heading into the tightest spring market in almost 20 years.”

July 2020 home sales graph from CREA
Courtesy: CREA

Another metric that shows sellers once again with the upper hand in most markets is the sales-to-new listing ratio, which is at 74%, the highest it’s been in 18 years, noted RBC economist Robert Hogue. A balanced ratio is between 40 and 60% and anything below 40% is considered a buyers’ market.

“COVID-19 did not destroy this year’s spring market—it mostly delayed it,” Hogue said, noting the busy spring market activity is now taking place during the summer, a traditionally slower period for home sales.

“We expect further unwinding of pent-up demand to keep sales brisk in August and perhaps September before cooling later this year,” he added.

Historically low housing supply is also contributing to this unusual situation of a hot real estate market occurring while unemployment is still above 10%.

There were just 2.8 months of inventory available, meaning that’s how long it would take to liquidate current inventories at the current sales rate. That’s the lowest reading CREA has on record.

A Look at Individual Markets

CREA noted that, “generally speaking, most markets east of Saskatchewan are seeing prices accelerate in line with strong sales numbers,” while B.C. and Alberta experienced more “modestly positive” price gains.

Here’s a look at where average prices stand in some of the country’s key markets:

  • Ottawa: $506,700 (+18.4%)
  • Halifax: $363,692 (+17.2%)
  • Kingston, ON: $458,026 (+15.2%)
  • Fredericton: $571,471 (+14.3%)
  • Greater Montreal Area: $401,300 (+14.1%)
  • Greater Toronto Area: $880,400 (+10%)
  • Greater Vancouver Area: $1,031,400 (+4.5% year-over year)
  • Victoria: $724,600 (+3.5%)
  • Calgary: $411,200 (-1.4%)

Making Sense of This Housing Market

Earlier this year, before COVID changed the world, several of Canada’s largest housing markets were approaching “frothy” levels of activity not seen since 2016. In January, for example, the Greater Toronto Area recorded an 8.5%  increase in selling prices compared to the year before.

Much of that demand came from first-time buyers competing fiercely against one another for fear of missing out, or “FOMO.”

In July, GTA home prices soared 10% year-over-year to an average price of $800,400 for all property types.

uninformed borrowersYet, homebuying intentions are stronger than ever. The percentage of renters who said they plan to purchase in the next 12 months more than doubled from 7% to 14%, according to recent data from Mortgage Professionals Canada. Likewise, 9% of current homeowners plan to purchase a new home within the next year, up from 7% in 2019.






Study estimates over 2 million Canadians have moved home because of COVID-19

Latest News & Economy DAZADA DIAMOND 18 Aug

Study estimates over 2 million Canadians have moved home because of COVID-19

Study estimates over 2 million Canadians have moved home because of COVID-19In its recent report, Generation Boomerang, financial comparison platform Finder found that COVID-19 has potentially forced millions of Canadians to make changes to their living situations.

Based on a Google survey conducted in June involving Canadian adults in all ten provinces, Finder discovered that one in ten Canadians, equivalent to an estimated 2.8 million people, have seen their living situations altered since the COVID-19 pandemic began.

Five percent of respondents said they have moved back in with their parents as a result of COVID-19, with another three percent saying their children have moved back in with them. Extrapolated into numbers, Finder says “about 1.5 million Canadians have said they have moved back in with their parents due to the COVID-19 crisis, and 860,917 parents have said their kids have moved back home.”

The group estimates that the number of Canadians living with their parents may increase to over two million, with another 600,000-plus saying they’re “considering” moving home. It’s a trend Finder’s publisher, Scott Birke, says may not be confined to the pandemic. Rather, it could be the only option young Canadians have for building wealth and establishing their careers.

“Between the high cost of rent in Canada’s big cities and a recession with record levels of unemployment, young people trying to launch or grow careers while paying the bills are now faced with challenges that may seem insurmountable, making returning home to their parents the most attractive option for many of Canada’s young adults,” Birke says.

If moving home to cut down on living costs is indeed fuelling Generation Boomerang, it makes sense that Ontario, home to some of the country’s highest living expenses, has seen the highest number of resident changing their living situations. Six percent of adult children in Ontario said they have moved back in with their parents, a figure higher than any other province. In BC, 15 percent of the population has either experienced, or is expecting, a move; in Quebec, that number is 13 percent.

While Canadians aged 18-24 were most likely to have either moved home or still be contemplating such a move, the report found that parents of adult children have also been making shifts of their own. According to Finder, almost 280,000 Canadians have moved in with their adult children since the start of the pandemic. Another 455,000 are said to be seriously considering doing the same.

“It is safe to assume that many of the parents who moved in with their adult children are also grandparents who are helping to provide childcare for exhausted working parents of young children, who have limited or no childcare options until school begins,” Birke says.


Bank of Canada cuts benchmark mortgage rate, increasing affordability for homebuyers

Latest News & Economy DAZADA DIAMOND 17 Aug

Bank of Canada cuts benchmark mortgage rate, increasing affordability for homebuyers

Good news for some residents out there looking to purchase a home.

On August 12, the Bank of Canada lowered its five-year conventional mortgage rate from 4.94% to 4.79% — the second time it’s reduced the qualifying rate in the last three months.

The last time was in May, when the rate changed from 5.04% to 4.94%.

The most recent change to the benchmark qualifying rate will increase homebuyers’ affordability by 1.5%, according to James Laird, co-founder of and president of CanWise Financial.

“Over the last few years, rule changes have made it harder for Canadians to qualify, so the recent reductions in the benchmark qualifying rate is welcome news for first time homebuyers hoping to enter the housing market,” said Laird.

The decrease in the Bank of Canada’s five-year benchmark rate is the result of the big banks decreasing their five-year posted rates.

According to’s mortgage affordability calculator, a family with an annual income of $100,000 with a 10% down payment and 5-year fixed mortgage rate of 2.79% amortized over 25 years would have qualified for a home valued at $523,410 under the original 4.94% qualifying rate.

Under the new stress test, if they had a qualifying rate of 4.79%, they can now afford $531,230 — a total difference of $7,820.

“Five-year fixed rates are currently at historic lows, so now is a good time for Canadian to qualify and secure a mortgage rate,” said Laird.

Hopeful new homebuyers are advised speak to a mortgage professional to redo their affordability calculations using the new stress test rate and see how much their buying power has increased.