Steven Burrows
Phone: (905) 338-3721 Email Steven

Mortgage Rates


 RATE SHEET 

Special Rate Mortgages


Terms Posted
Rates
Payment
  Per $100k
Our Rates Payment
  Per $100k
Savings
6 Months 3.14% $480.46 3.10% $478.39 $2.07
1 Year 3.04% $475.30 2.44% $444.98 $30.32
2 Years 2.84% $465.07 2.54% $449.96 $15.11
3 Years 3.44% $496.11 2.89% $467.62 $28.49
4 Years 3.89% $520.07 2.84% $465.07 $55.00
5 Years 4.94% $578.19 2.79% $462.54 $115.66
7 Years 5.30% $598.80 3.44% $496.11 $102.69
10 Years 6.10% $645.76 3.64% $506.69 $139.07
 Variable   2.70% $457.99 2.34% $440.04 $17.95
Prime Rate 3.20%
Please Note: Payment per $100K and possible savings shown above are based on a 25-year ammortization. Rates are subject to change without notice and the rate you receive may vary depending on your personal financial situation. *OAC E&OE. Please reply to this email and I will be happy to provide you with greater detail and determine the best rate available for you.

 

 

Please note that rates shown above are subject to change without notice. The rates shown are  posted rates and the actual rate you receive may be different, depending upon your personal financial situation. “Some conditions may apply. Rates may vary from Province to Province. Rates subject to change without notice. *O.A.C. E.& O.E.” Check with your Mortgage Professional for full details & to determine what rate will be available for you.

Mortgage Rates have been provided by different Mortgage providers such as:
Homefree Mortgages, Dominion Lending Centres, Mortgage Alliance.

 Contact Steven Burrows for Details: 


The Non-Resident Tax


 

Please note: Once the government has passed this legislation the NRST will be effective as of April 21, 2017.
 
Binding agreements of Purchase and Sale signed on April 20, 2017 or before are not subject to the NRST. On Thursday, April 27 this item will be finalized in the Provincial budget.
Non-Resident Speculation Tax
The implementation of the Non-Resident Speculation Tax is subject to the approval of the Legislature.
 
Overview
 
The non-resident speculation tax (NRST) is a 15 per cent tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe (GGH) by individuals who are not citizens or permanent residents of Canada or by foreign corporations ("foreign entities") and taxable trustees.
 
The NRST applies in addition to the general land transfer tax in Ontario.
 
The GGH includes the following geographic areas: Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington and York.  Refer to the map at the end of the document.
 
Effective Date
 
Upon the enactment of legislation, the NRST will be effective as of April 21, 2017.  
Binding agreements of purchase and sale signed on or before April 20, 2017 are not subject to the NRST.
 
Entities Subject to the NRST
 
The NRST applies to foreign entities or taxable trustees who purchase or acquire residential property in the GGH.
 
foreign entity is either a foreign national or a foreign corporation.
 
A foreign national, as defined in the Immigration and Refugee Protection Act (Canada), is an individual who is not a Canadian citizen or permanent resident of Canada.
 
A foreign corporation is a corporation that is one of the following:
  • Is not incorporated in Canada;
  • Is incorporated in Canada but is controlled in whole or in part by a foreign national or other foreign corporation, unless the shares of the corporation are listed on a Canadian stock exchange; or
  • Is controlled directly or indirectly by a foreign entity for the purposes of section 256 of the Income Tax Act (Canada).
For the purposes of the NRST, a taxable trustee is a trustee that is one of the following:
  • A foreign entity holding title in trust for beneficiaries, or
  • A Canadian citizen, permanent resident of Canada, or a corporation holding title in trust for foreign entity beneficiaries.
Types of Property Subject to the NRST
 
The NRST applies to the transfer of land which contains at least one and not more than six single family residences.  Examples of land containing one single family residence include detached and semi-detached houses, townhouses and condominium units.  In a situation involving the purchase of multiple condominium units, each unit would be considered land containing one single family residence.  Examples of land containing more than one single family residence that are subject to the tax include duplexes, triplexes, fourplexes, fiveplexes and sixplexes. 
 
The NRST does not apply to other types of land such as multi-residential rental apartment buildings with more than six units, agricultural land, commercial land or industrial land.
 
The NRST applies on the value of the consideration for the residential property. If the land transferred includes both residential property and another type of property, the NRST applies on the portion of the value of the consideration attributable to the residential property. For example, if the purchase price of the transaction is $1,000,000 and contains one single family residence with a value of the consideration of $400,000, and commercial land with a value of the consideration of $600,000, the 15 per cent NRST would only apply to the $400,000 portion.
 
General Application
 
The 15 per cent NRST applies to the value of the consideration for a transfer of residential property if any one of the transferees is a foreign entity or taxable trustee.
 
For example, if a transfer of residential property is made to four transferees, one of whom is a foreign entity that acquires a 25 per cent share in the land, the NRST would apply to 100 per cent of the value of the consideration for the transfer.
 
Each transferee is jointly and severally liable for any NRST payable. If a foreign entity or taxable trustee does not pay the NRST, the other transferees will be required to pay the tax. This applies even if the other transferees are Canadian citizens or permanent residents of Canada.
 
The NRST does not apply when a person purchases or acquires residential property as a trustee of a mutual fund trust, real estate investment trust or specified investment flow-through trust.
 
The NRST applies to unregistered dispositions of a beneficial interest in residential property. This includes purchases and acquisitions of residential property where section 3 of the Land Transfer Tax Act is applicable.
 
Exemptions
 
An exemption to the NRST is available to a foreign national who receives confirmation under the Ontario Immigrant Nominee Program ("nominee"). To qualify for this exemption, the foreign national must be confirmed under the Ontario Immigrant Nominee Program at the time of the purchase or acquisition and the property must be used as the foreign national's principal residence.
 
An exemption is also available to a foreign national who is conferred the status of "convention refugee" or "person in need of protection" ("refugee") under the Immigration and Refugee Protection Act at the time of the purchase or acquisition.
 
A foreign national who has a spouse (as defined in the Land Transfer Tax Act), who is a Canadian citizen, permanent resident of Canada, "nominee" or "refugee" is exempt from the NRST if the foreign national jointly purchases residential property with that spouse.  
  
However, the exemption does not apply if the Canadian citizen, permanent resident of Canada, "nominee", or "refugee" and his or her foreign national spouse purchased the property with another foreign national.  For example, if three parties purchase a property as follows:
  • one Canadian citizen and his or her foreign national spouse; and
  • a third party who is a foreign national,
the exemption would not apply and NRST would be payable. 
 
Rebates
 
A rebate of the NRST may be available in the following situations:
  • The foreign national becomes a Canadian citizen or permanent resident of Canada within four years of the date of the purchase or acquisition;
  • The foreign national is a student who has been enrolled full-time for at least two years from the date of purchase or acquisition in an "approved institution", as outlined in Ontario Regulation 70/17 of the Ministry of Training, Colleges, and Universities Act; or
  • The foreign national has legally worked full-time in Ontario for a continuous period of one year since the date of purchase or acquisition.
In order to be eligible for the rebates, the foreign national must exclusively hold the property, or hold the property exclusively with his or her spouse.  The property must also have been used as  the foreign national's (and if applicable their spouse's) principal residence for the duration of the period.
 
The rebate will be paid with interest, calculated at the prescribed refund rate under the Land Transfer Tax Act. 
 
Supporting documentation will be required to substantiate all applications for rebates.
 
Tax Avoidance and Offences
 
All transfers of land in Ontario are subject to audit.
 
Anti-avoidance provisions will be enforced to ensure the NRST is reported and paid as required. This includes examining circumstances where Canadian citizens or permanent residents of Canada, as taxable trustees, hold property in trust for a foreign entity or are trustees where a beneficiary may be a foreign entity.  This also includes preventing the use of multiple conveyances to avoid the NRST.
 
Failure to pay the NRST as required may result in a penalty, fine and/or imprisonment.
 
Payment of the NRST
 
NOTE:  All transfers registered on or after April 21, 2017 must contain a statement expressly acknowledging that consideration has been given to the application of the NRST.  Registrants are required to provide one of the following three statements:
 
The Non-Resident Speculation Tax does not apply to this transfer because the binding agreement of purchase and sale was signed on or before April 20, 2017.
 
The Non-Resident Speculation Tax does not apply to this transfer because (registrant to provide explanation for non -application).
 
The Non-Resident Speculation Tax applies to this transfer and has been paid to the Ministry of Finance, as confirmed by Receipt # *******
 
For paper registrations, the applicable statement is to be inserted in paragraph 5 of the Land Transfer Tax Affidavit.  For registrations processed through Teraview, the applicable statement is to be inserted in Land Transfer Tax statement 9151 (Other remarks and explanations), which is found under the Explanations Tab.
 
Taxpayers reporting unregistered dispositions of land to the Ministry of Finance (MoF) must also expressly acknowledge in a covering letter that consideration has been given to the application of the NRST and whether or not it is payable on the reported transaction.
 
Electronic  Registrations
 
For an interim period, Ontario's electronic registration system (operated by Teranet) will not be able to collect the NRST. During this interim period, to ensure compliance with the legislation, affected purchasers/transferees should pre-pay both the Land Transfer Tax and the NRST directly to the MoF's office in Oshawa.  Once the MoF accepts the pre-payment of the taxes, the transfer may be registered electronically without further payment of Land Transfer Tax or NRST.
 
The Ministry will provide a letter confirming receipt of NRST with a receipt number.
 
Registrations made at Land Registry Offices
 
NRST payable on registrations that must be made at a Land Registry Office must be pre-paid directly to the MoF.  If the transfer is subject to NRST, both the Land Transfer Tax and NRST should be pre-paid directly to the MoF.
 
The transfer will be stamped with a direction to the Land Registrar that no further Land Transfer Tax is payable at registration and the MoF will also provide a letter confirming receipt of NRST.
 
Dispositions / Unregistered transfers
 
If a transfer will not be registered on title, a Return on the Acquisition of a Beneficial Interest in Land form, along with the payment of the Land Transfer Tax and the NRST must be submitted to the MoF within 30 days of the transfer of land.  For more information, see Land Transfer Tax and the Treatment of Unregistered Dispositions of a Beneficial Interest in Land
 
How to pre-pay the Land Transfer Tax and the NRST to the MoF
 
The following documentation must be submitted to the MoF:
 
For transfers to be registered and unregistered transfers / dispositions:
  1. Cheque for the Land Transfer Tax and the NRST (certified, if not drawn on the solicitor's trust account), made payable to the "Minister of Finance"
  2. Copy of the Agreement of Purchase and Sale, with all schedules attached
  3. Copy of the draft Statement of Adjustments (if applicable)
  4. If the value of the consideration is based on the fair market value of the land, any appraisals or documentation that is evidence of the fair market value of the land
  5. Any additional documents as may be required to determine the value of the consideration
In addition, for transfers to be registered:
 
6. Authorizing or Cancelling a Representative form(s), completed by each  transferee
7. Copy of the Document "in preparation" or three copies of the Transfer/Deed if    registration is done on paper
8.If registration is done on paper, two completed Land Transfer Tax Affidavits.
 
Please submit the required documentation to the following address, either by mail, courier or in person:
 
Ministry of Finance
Compliance Branch
33 King Street West, 3rd Floor
Oshawa ON L1H 8H9
 
Additional information:

If you have administrative or technical questions about the NRST, contact:
 
Ministry of Finance
Land Tax Section
33 King Street West
Oshawa ON L1H 8H9

 


‘Spousal Separation Program’


A few lenders have a special ‘Spousal Separation Program’  that you need to know about. How does this work? 
 

- One spouse can purchase up to 95% LTV (Loan to Value) from the other on title, allowing them to remain in the family home.  Biggest misconception I hear is that 80% LTV is the max.

- Separation agreement must clearly state the division of assets from the matrimonial home.

- Appraisal is required.

- Purchase and Sale agreement is required

- Must income qualify as per any other regular mortgage.

 


Articles


More Rates Now Hinge on Credit Scores

 March 31, 2017   Robert McLister 

Never before has your credit score had such an impact on your mortgage rate.

Ever since the banking regulator (OSFI) jacked up capital requirements on default insurers, and linked its capital formula to credit scores, more and more securitizing lenders have:

a) set different rates for different credit score ranges; and/or

b) raised their minimum credit scores for given mortgage products.

At some lenders, borrowers with, say, a 640 credit score are offered rates that are 1/4 point worse than someone with a 750 score. Many retail channel lenders set their internal discounts based on credit scores as well.

On conventional mortgages, the magic number seems to be 720. On scores below that, lenders’ extra insurance costs start climbing more meaningfully, and some of them pass that through to borrowers.

It all means that we as an industry are going to have to better educate our clients about this trend—because, according to a recent TransUnion poll, many folks don’t get it.

Over half (56%) of credit card holders say they don’t even understand how their credit score is compiled.

And 4 in 10 borrowers don’t grasp the importance of making more than their minimum monthly payments. Cardholders who pay more than the required minimum each month are less risky borrowers in general. And that shows up in their credit scores. And, while the credit bureaus don’t disclose their exact scoring algorithms, those formulas seem more sensitive than ever to debt utilization and payment timeliness.

 

New Ontario LTT Rebate

First-time home buyers are now eligible to get $4,000 off the Canadian dream and we need your help to help spread the word. 

Effective January 1st, 2017, Ontario has doubled the land transfer tax rebate for first-time home buyers from $2,000 to $4,000. That means that a first-time home buyer will pay no provincial tax on homes sold for $368,000 or less. 

Ontario REALTORS® lobbied hard for the improved rebate and we're very proud to promote it to first-time buyers. 

www.FirstHomeRebate.ca 

To help promote this new rebate we've created a website www.FirstHomeRebate.ca with an informative video and calculator that can help you figure out how much tax relief you can claim on your first home. 

 

CMHC Hiking Insurance Premiums
 

 Homebuyers with less than 20% down are going to pay more.

 CMHC is hiking mortgage insurance rates for the third time in three years. Premiums are jumping up to 0.65 percentage points on the highest LTV mortgages, effective March 17, 2017. Here’s the new premium table:

 But high-ratio hikes aren’t the only story. Premiums on mortgages between 65.01 and 80% LTV are soaring too.

 At 80% LTV, the most popular LTV for those refinancing, the premium is almost doubling to 2.40%. That will push up interest rates among lenders who currently pay this premium for their customers in order to securitize the mortgage.

 CMHC had a conference call this morning about the increases. Here were some takeaways:

•It says these premium hikes are due mainly to OSFI’s capital requirement changes, which took effect January 1.

•OSFI’s new capital requirements include a formula based on LTV, credit score, location and other things. Oddly, this formula disproportionately targets (increases the costs for) mortgages in the conservative 65.01 to 80% LTV bracket.

•Bulk insurance premiums have increased similar to the low-ratio transactional premiums, says CMHC.

•The insurer says it has communicated bulk pricing criteria to lenders (although the securitizing lenders I’ve spoken with cite considerable obscurity in bulk pricing, which has led many of them to transactionally insure their mortgages instead)

•Roughly two-thirds of CMHC’s business is in the 95% LTV category, said CMHC, and about 4% of its transactional insurance is used for low-ratio customers.

 Steven Mennill, Senior Vice-President, Insurance, said that CMHC is “Not doing this to affect housing markets…” and doesn’t think it will have a significant effect on competition.

 Mortgage finance companies would vehemently disagree. Higher premiums have already limited competition in the low-ratio market where MFCs must charge rates that are up to ¼ point higher on 80% LTV deals (compared to last fall).

 Big banks, which don’t need to rely on insured mortgages for securitization purposes, now have more pricing power than ever—at least since the dawn of NHA-MBS. And no one should blame banks. They’re not writing these rules. But from a consumer standpoint, Joe Borrower is getting the shaft, which leads me to the legislated purpose of the National Housing Act:

 “The purpose of this Act, in relation to financing for housing, is to promote housing affordability and choice, to facilitate access to, and competition and efficiency in the provision of, housing finance, to protect the availability of adequate funding for housing at low cost, and generally to contribute to the well-being of the housing sector in the national economy.” (emphasis ours)

 The recent decisions by the Department of Finance, OSFI and CMHC appear to twist or flout these essential provisions of the National Housing Act. Policymakers argue that such measure are warranted for the stability of the market. But unlevel competitive playing fields rarely create liquidity, consumer savings and stability, not long-term.


 

______________________________________

 

 Mortgages:

Mortgage Rules Changed

Update October 4th, 2016

 Ottawa unveiled major initiatives to slow housing activity both by potentially discouraging foreign home purchases and, more importantly, by making it more difficult for Canadians to get mortgages. As well, the Finance Minister is limiting the degree to which mortgage lenders can buy portfolio insurance on mortgages with downpayments of 20% or more. Ottawa has clearly taken out the big guns to slow housing activity, which is widely considered to be too strong in Vancouver and Toronto. Ironically, home sales have already slowed precipitously in Vancouver in recent months and the BC government introduced a new 15% land transfer tax on foreign purchases of homes effective August 6, the effects of which are yet to be fully determined.

The measures announced today by Finance Minister Morneau are more far reaching than anything considered to date and could well have quite a significant impact. Not only are these initiatives intended to close loopholes for foreign investors, which might help to make housing more affordable for domestic purchasers, but they will actually make homeownership less attainable for the marginal borrower, which is often younger Canadian first-time home buyers.

Officials at the Department of Finance have been studying the housing market and have led a working group with municipalities and provinces, as well as federal agencies such as the Office of the Superintendent of Financial Institutions (OSFI) and Canada Mortgage and Housing Corporation (CMHC). This in-depth analysis has informed today’s announcement.

  • The income tax system provides a significant income tax benefit to homeowners disposing of their principal residence, in the form of an exemption from capital gains taxation.
  • An individual who was not resident in Canada in the year the individual acquired a residence will not—on a disposition of the property after October 2, 2016—be able to claim the exemption for that year. This measure ensures that permanent non-residents are not eligible for the exemption on any part of a gain from the disposition of a residence.
  • The Canada Revenue Agency (CRA) will, for the first time, require all taxpayers to report the sale of a property for which the principal residence exemption is claimed.

Officials at the Department of Finance have been studying the housing market and have led a working group with municipalities and provinces, as well as federal agencies such as the Office of the Superintendent of Financial Institutions (OSFI) and Canada Mortgage and Housing Corporation (CMHC). This in-depth analysis has informed today’s announcement.

Measures Affecting All Homebuyers

The Finance Department says in its press release that, "Protecting the long-term financial security of Canadians is a cornerstone of the Government of Canada’s efforts to help the middle class and those working hard to join it." This is a "Nanny State" measure to protect people from themselves, as the Bank of Canada has long been concerned about the growing number of households with excessive debt-to-income ratios. It will make housing less attainable, at least in the short run. If it, therefore, substantially reduces housing demand, home prices could decline, ultimately improving affordability. This, of course, is not what the 70% of Canadian households that already own a home would like to see.

  • Broadened Mortgage Rate
    Stress Tests: 
    To help ensure new homeowners can afford their mortgages even when interest rates begin to rise, mortgage insurance rules require in some cases that lenders “stress test” a borrower’s ability to make their mortgage payments at a higher interest rate. Currently, this requirement only applies to a subset of insured mortgages with variable interest rates (or fixed interest rates with terms less than five years). Effective October 17, 2016, this requirement will apply to all insured mortgages, including fixed-rate mortgages with terms of five years and more.
  • A buyer with less than 20% down will have to qualify at an interest rate the greater of their contract mortgage rate or the Bank of Canada’s conventional five-year fixed posted rate. The Bank of Canada’s posted rate is typically higher than the contract mortgage rate most buyers actually pay. As of September 28, 2016, the Bank of Canada posted rate was 4.64%, compared to roughly 2% or so on variable rate mortgages.

For borrowers to qualify for mortgage insurance, their debt-servicing ratios must be no higher than the maximum allowable levels when calculated using the greater of the contract rate and the Bank of Canada posted rate. Lenders and mortgage insurers assess two key debt-servicing ratios to determine if a homebuyer qualifies for an insured mortgage:

  • Gross Debt Service (GDS) ratio—the carrying costs of the home, including the mortgage payment and taxes and heating costs, relative to the homebuyer’s income;
  • Total Debt Service (TDS) ratio—the carrying costs of the home and all other debt payments relative to the homebuyer’s income.

 

 

 

Chief Economist:
Morneau's Big Guns
Aimed At Housing

To qualify for mortgage insurance, a homebuyer must have a GDS ratio no greater than 39% and a TDS ratio no
greater than 44%. Qualifying for a mortgage by applying the typically higher Bank of Canada posted rate when
calculating a borrower’s GDS and TDS ratios serves as a “stress test” for homebuyers, providing new homebuyers
a buffer to be able to continue servicing their debts even in a higher interest rate environment, or if faced with a
reduction in household income.

The announced measure will apply to new mortgage insurance applications received on October 17, 2016 or later.

 

  • Tighter Mortgage Insurance Rules

Lenders have the option to purchase mortgage insurance for homebuyers who make a down payment of at least
20% of the property purchase price, known as “low-ratio” insurance because the loan amounts are generally low
in relation to the value of the home. There are two types of low-ratio mortgage insurance: transactional insurance
on individual mortgages at the point of origination, typically paid for by the borrower, and portfolio (bulk pooled)
insurance that is acquired after origination and typically paid for by the lender. The majority of low-ratio mortgage
insurance is portfolio insurance.

Lender access to low-ratio insurance supports access to mortgage credit for some borrowers, but primarily supports
lender access to mortgage funding through government-sponsored securitization programs.

Effective November 30, 2016, mortgage loans that lenders insure using portfolio insurance and other discretionary
low loan-to-value ratio mortgage insurance must meet the eligibility criteria that previously only applied to high-ratio
insured mortgages. New criteria for low-ratio mortgages to be insured will include the following requirements:

 

  1. A loan whose purpose includes the purchase of a property or subsequent renewal of such a loan;
  2. A maximum amortization length of 25 years;
  3. maximum property purchase price below $1,000,000 at the time the loan is approved;
  4. For variable-rate loans that allow fluctuations in the amortization period, loan payments that are recalculated at least once every five years to conform to the original amortization schedule;
  5. A minimum credit score of 600 at the time the loan is approved;
  6. A maximum Gross Debt Service ratio of 39 per cent and a maximum Total Debt Service ratio
    of 44 per cent at the time the loan is approved, calculated by applying the greater of the
    mortgage contract rate or the Bank of Canada conventional five-year fixed posted rate; and,
  7. A property that will be owner-occupied.

These tighter mortgage insurance regulations will reduce the supply of mortgages and/or increase their cost to the borrower.

 

Consultation on Lender Risk Sharing

The Government announced that it would launch a public consultation process this fall to seek information and
feedback on how modifying the distribution of risk in the housing finance framework by introducing a modest
level of lender risk sharing for government-backed insured mortgages could enhance the current system.

Canada’s system of 100% government-backed mortgage default insurance is unique compared to approaches
in other countries. A lender risk sharing policy would aim to rebalance risk in the housing finance system so that
lenders retain a meaningful, but manageable, level of exposure to mortgage default risk.

 

This proposal by CMHC has been floated for some time and, needless to say, the Canadian Bankers' Association,
is against it. The measure would certainly increase the risk associated with funding mortgages and therefore likely
increase the capital required to be set aside against this additional risk. Therefore, in essence, it increases the
cost to the lenders to finance mortgages. The lenders will undoubtedly attempt to pass off this increased cost
to the borrower or reduce its supply of credit
. Right now, the cost of mortgage insurance is borne by the taxpayer.

 

Bottom Line: These are very meaningful initiatives to slow housing demand, making it more difficult for
Canadians to borrow. Finance Minister Morneau has taken out the big guns. I have no doubt that the pace
of mortgage lending will slow from what it would otherwise be as a result of these government actions.
 
However, these actions do nothing to address the shortage of housing supply in Vancouver and Toronto.

 

Housing has been a very important pillar for the Canadian economy, especially at a time when oil price declines
have decimated the oil sector and manufacturing continues to struggle. This is a case of being very careful what
we wish for-- I'm concerned that we might see more of a slowdown in housing than the government was counting
on, which will certainly affect jobs and growth and reduce tax revenues at a time when budget deficits are
mounting and fiscal stimulus has yet to do its job.