March 5 – Bank of Canada left rate unchanged this week. http://www.bankofcanada.ca/en/fixed-dates/2010/rate_020310.html
GUIDELINE CHANGES:
Lots of talk about the new RULES. I have spoke to CMHC and Genworth representatives and a lot of details are yet to be confirmed. Here are a few things that appear to be in our future:

- Buyers WILL still be ABLE to put 5% down on a purchase.
- The 5 year fixed rate will be used to qualify variable rate mortgages and terms shorter than 5 years.
- Rental offset of 80% will no longer apply. 50% of rents will be added to income
- 20% down for rental properties
- April 19th – If CMHC institutes this change as they have others, an approval before April 19th should still follow the current guidelines and NOT the new guidelines – even with a completion after this date.

These changes should NOT change the guidelines for most buyers putting more than 20% down.

My thoughts:
The rental offset change will have the most affect in Vancouver. For buyers with less than 20% down and using the basement suite to qualify, the change will be large. A $1,000 a month suite under the old rules increased buying power by about $185,000. Under the new rules, buying power will be increased by only $45,000.

As long as the five year rate is discounted, then this will reduce a purchasers buying power of an income of $50,000 from $350,000 to about $330,000. This example assumes no other debt, excellent credit and assumes standard condo fees, taxes and heat.

In Vancouver, it has been almost impossible to get a rental property approved with less than 20% down under the old CMHC guidelines, so I think this will have almost no effect in Vancouver.

RATES:

Variable:
- Prime = *2.25% (Next announcement date is (April 20th)
- Prime minus 0.40% (currently 1.85%) – closed variable
- Prime plus 0.40% - open variable mortgages
- Prime plus 0.50% -lines of credit

Fixed:
1yr – 2.35% 3yr – 3.25% 5yr – 3.69% 7yr – 4.95% 10yr – 5.20%

- Conditions may apply to rates quoted.


Payment per $100,000 mortgage @ 3.25%

- 25 year amortization: $486.17

- 30 year amortization: $434.01

- 35 year amortization: $397.70