January 13, 2020
Why You Should Refinance Your Mortgage or Get a New Mortgage in 2020
Written by Steven Tulman
If you are interested in obtaining a mortgage, our expert mortgage brokers at Clover Mortgage have analyzed data on significant mortgage market trends in 2019 and compared it to our predictions for the mortgage market in 2020 to help you make an informed decision in the new year about refinancing your mortgage or getting approved for a mortgage on a property you hope to purchase.
To begin with, in September of the past year, the First-Time Homebuyer Incentive (FTHBI) was established. First-time buyers can obtain an interest-free downpayment valued at up to 10% of the purchase price of their home, after exchanging an equivalent amount of equity in their home. The program has been criticized for being insufficient for improving home affordability in cities such as Toronto and Vancouver, given that the purchase price for a home is capped at $505,000. Fortunately, during the latest federal elections, the Liberal government promised to improve the program during 2020 by increasing the maximum purchase price in such valuable markets.
The Home Buyer’s Withdrawal limit from a Registered Retirement Savings Plan (RRSP) has also changed, increasing from $25,000 to $35,000. First-time buyers who live in the same household can pool together their retirement savings and withdraw up to $70,000 towards the same home.
Furthermore, the Canadian real estate market also flourished in 2019, recovering from low sales and struggling prices in 2018. The number of home sales beat forecasts for the year, with approximately 486,000 sales made, representing a 6.2% increase from 2018. Average Canadian home prices steadily bloomed by 2.3% year-on-year to reach $500,000.
The BoC also known as the Bank of Canada, also decided to keep the overnight bank rate steady at 1.75%. Despite some unease stirred by a deaccelating global economy and international trade tensions, the Bank of Canada was more swayed by strong economic outcomes domestically. Experts suggest that the rate will likely continue to hold steady throughout the beginning of the new year.
Lastly, borrowers in 2019 experienced plunging mortgage rates. Borrowers shopping for insured, 5-year fixed-rate mortgages in September could attain rates as low as 2.69%, in comparison with 3.24% in January of the same year. With interest rates at nearly two-year lows, borrowers could see savings of more than $4000 across their loan terms.
2019 saw important changes and trends that will facilitate ideal conditions for borrowers interested in making investments in 2020. To better understand these trends and to find the best mortgage available to you, enlist the help of a qualified and experienced mortgage broker at Clover Mortgage.
Regardless of whether you are looking to take out equity from your home to pay off debt as a debt consolidation loan, or have bad credit or a low credit score, Clover Mortgage is here to help you get approved for the best possible option that is available to you. Call us today at Call us at 416-674-6222 or toll free at 1-800-673-2230, or email us at email@example.com to speak with a knowledgeable and helpful mortgage broker about your needs and situation.