Experts on the Outlook for Mortgages and the Housing Market

“Interest rates will continue to dictate the outcome of Canada’s housing market in 2024 with the first and second halves showing different pictures.

We expect slow activity and softer prices to persist in the early part of the year as the Bank of Canada maintains its policy rate at a two-decade high and home ownership stays out of reach for many potential buyers.

But, a pivot toward rate cuts mid-year will get the wheels turning faster over the second half or perhaps even sooner. There will be a lot of pent-up demand to satisfy in the market once confidence returns, which could heat things up in a hurry.”

“As we look back at the year that was, we can say 2023 was a year that tested the resilience of Canadian mortgage holders. And as we look forward, there’s optimism that 2024 will be the year of rate relief.

Building on the 400 basis points worth of rate hikes by the Bank of Canada in 2022, borrowers faced an additional three quarter-point hikes in 2023, raising payments for some variable-rate borrowers and those renewing their mortgage.

While mortgage delinquency rates have risen slightly from their record lows, borrowers have largely proven resilient thus far. By the Bank of Canada’s own estimation, roughly 40% of mortgage-holders have already seen their mortgage renew at a higher rate.

The bulk of renewal pain, however, is coming up in the next several years. Analysts estimate about $251 billion in mortgages will come up for renewal in 2024, with another $352 billion worth in 2025.

While the Bank of Canada expects that at least 8 in 10 mortgage holders will face a “relatively large” mortgage payment increase by the end of 2025, expected interest rate cuts in the years ahead should help ease that payment shock.

Falling interest rates in 2024 are also expected to support a rebound in home sales and prices. But forecasters differ on what those growth rates could look like.”

“Looking ahead to 2024, most experts and analysts expect the Canadian housing market to recover gradually as interest rates stabilize and demand returns. CREA forecasts that national home sales will rise by 13.9 percent to 561,090 units in 2024, while the national average home price will increase by 4.7 percent to $702,200.

The main reasons for this optimism are the improving economic outlook and the pent-up demand from buyers who delayed their purchases in 2023.”

“Our best advice regarding renewals is to start early. Begin exploring renewal options at least four months before your current mortgage term expires. This allows ample time to assess market conditions, interest rates, and estimate new payment amounts.

Provide yourself time to adjust your budget to account for higher mortgage payments. Next, shop around. Work with your Mortgage Broker to compare options.  Don’t settle for the first renewal offer you receive; compare rates and terms from multiple lenders to ensure you’re getting the best deal.

Additionally, consider your financial goals and circumstances. Assess whether your current mortgage still aligns with your needs and if refinancing or switching lenders could provide better terms or savings.

“There are some significant challenges when you are retired and need a mortgage or loan. There is no discrimination based on age as lenders usually qualify the mortgage or loans based on an individual’s credit, income and debt load.

If you are receiving a pension, any investment income or rental income, the lender can still consider it for qualification purposes. But nowadays, it’s a little hard to qualify when you are on a fixed income. There are some limited options when it comes to getting a mortgage or loan when retired.

The popular option is to get HELOC which is secured against your home equity. An alternative is a reverse mortgage. This is an equity based loan for Canadians aged 55 and over only.”

“In most instances the answer is yes, providing you have sufficient equity in your home. If it is determined that you do, then you will be able to take out a mortgage registered in 2nd position behind your existing 1st mortgage.

This new mortgage can be in the form of a line of credit, a debt consolidation loan, a pure equity loan, or a home renovation loan. Taking out another mortgage will not affect your payments or the day to day of your existing mortgage. It will add a new loan and a separate monthly payment to your budget and overall debt picture.”

“We find it helpful to write down every expense for a month or two. Put it on the refrigerator and categorize it as “Groceries”, “Restaurants”, “Other” and make a list of every penny spent that month.

This gives you a better visual of where any extra money is being spent that could be allotted for savings, vacations, retirement. Every little bit helps but knowing where all your money is going is the first steps to allocating it correctly.”

“The best investment is a property that the purchaser can hold on for a long period of time.  When we invest in a property it becomes profitable over a few years.  After the closing costs, transfer tax, and initial improvement investments have been paid off. 

When we purchase a property we can enjoy for at least a few years the chances of the neighborhood developing and improving are higher.  This is when values increase and owners increase the chances of making an interesting profit when they resell.  I always recommend to my buyers to invest in a property they like and can see themselves living in for a long time.”

“The first tip for someone who is struggling to find a buyer for their home is to take a close look at what the true fair market value for the property is. A lot of the times it’s easy to be stuck on a number the neighbour sold for in the past or based on a past appraisal.

However, real estate is very much a factual game and so we have to be willing to put our own desires to the side and look at the data. In most cases this is the solution and a price reduction will typically solve the problem.

A second tip is to assess the condition of the property. If there are odd smells, poor curb appeal, or anything very unique to the property, it’s very common for these factors to reduce the number of potential buyers.”

“Most of us own a home, but most of it belongs to the bank where we got the mortgage. A married couple use their combined credit history to get the mortgage approval with the best possible rate.

If a divorce occurs, and one person stays on in the house, some couples still have their trust in the other spouse and agree to leave the mortgage in both names. Quite often the title of the property will not change either, until it is time to renew the mortgage.

Other couples prefer to  separate everything right away. This will clear their name from the debt and offer no possible risks to the person leaving the title and the mortgage.

For this to happen, the spouse staying on title needs to refinance the property right away and proceed with the transfer of ownership (family transfer).”

“In Canada, it is indeed possible for individuals in their 50s, 60s, 70s, and even 80s to secure a mortgage.

The Canadian Human Rights Act prohibits discrimination based on age and this legal protection is a critical factor in ensuring that older Canadians can consider homeownership or refinancing options without facing undue barriers.

It’s worth noting that while lenders cannot legally discriminate based on age, they do take into account the applicant’s ability to repay the loan. This often includes a comprehensive review of income sources, credit history, and overall financial health.

For seniors, this may mean that lenders will look closely at income sources or net worth to ensure they are stable and able to cover the mortgage payments. Some lenders may be unwilling to consider a 30-year amortization for some older borrowers, but a 25-year amortization is rarely a problem.”

“Consider the following five strategies:

1. Improve your credit score: Lenders typically offer better terms and larger loan amounts to borrowers with higher credit scores. 

2. Increase your income: Higher income can increase the amount you’re eligible to borrow. Consider negotiating a raise, taking on a second job, or starting a side hustle.

3. Reduce your debt-to-income ratio (DTI): Lenders consider your DTI when determining how much you can borrow. Paying off existing debts or reducing your monthly expenses can lower your DTI.

4. Save for a larger down payment: A larger down payment reduces the amount you need to borrow and can result in a larger loan amount. Aim to save at least 20% of the home’s purchase price for a conventional loan.

5. Consider a co-signer: If you have a low income or credit score, a co-signer with a higher income or credit score may help you qualify for a larger loan amount.

By following these strategies and carefully managing your finances, you can increase your chances of qualifying for a larger mortgage and securing the maximum borrowing amount for your home purchase.”

“Interest rates will continue to dictate the outcome of Canada’s housing market in 2024 with the first and second halves showing different pictures.

We expect slow activity and softer prices to persist in the early part of the year as the Bank of Canada maintains its policy rate at a two-decade high and home ownership stays out of reach for many potential buyers.

But, a pivot toward rate cuts mid-year will get the wheels turning faster over the second half or perhaps even sooner. There will be a lot of pent-up demand to satisfy in the market once confidence returns, which could heat things up in a hurry.”

“As we look back at the year that was, we can say 2023 was a year that tested the resilience of Canadian mortgage holders. And as we look forward, there’s optimism that 2024 will be the year of rate relief.

Building on the 400 basis points worth of rate hikes by the Bank of Canada in 2022, borrowers faced an additional three quarter-point hikes in 2023, raising payments for some variable-rate borrowers and those renewing their mortgage.

While mortgage delinquency rates have risen slightly from their record lows, borrowers have largely proven resilient thus far. By the Bank of Canada’s own estimation, roughly 40% of mortgage-holders have already seen their mortgage renew at a higher rate.

The bulk of renewal pain, however, is coming up in the next several years. Analysts estimate about $251 billion in mortgages will come up for renewal in 2024, with another $352 billion worth in 2025.

While the Bank of Canada expects that at least 8 in 10 mortgage holders will face a “relatively large” mortgage payment increase by the end of 2025, expected interest rate cuts in the years ahead should help ease that payment shock.

Falling interest rates in 2024 are also expected to support a rebound in home sales and prices. But forecasters differ on what those growth rates could look like.”

“Looking ahead to 2024, most experts and analysts expect the Canadian housing market to recover gradually as interest rates stabilize and demand returns. CREA forecasts that national home sales will rise by 13.9 percent to 561,090 units in 2024, while the national average home price will increase by 4.7 percent to $702,200.

The main reasons for this optimism are the improving economic outlook and the pent-up demand from buyers who delayed their purchases in 2023.”

“Our best advice regarding renewals is to start early. Begin exploring renewal options at least four months before your current mortgage term expires. This allows ample time to assess market conditions, interest rates, and estimate new payment amounts.

Provide yourself time to adjust your budget to account for higher mortgage payments. Next, shop around. Work with your Mortgage Broker to compare options.  Don’t settle for the first renewal offer you receive; compare rates and terms from multiple lenders to ensure you’re getting the best deal.

Additionally, consider your financial goals and circumstances. Assess whether your current mortgage still aligns with your needs and if refinancing or switching lenders could provide better terms or savings.

“There are some significant challenges when you are retired and need a mortgage or loan. There is no discrimination based on age as lenders usually qualify the mortgage or loans based on an individual’s credit, income and debt load.

If you are receiving a pension, any investment income or rental income, the lender can still consider it for qualification purposes. But nowadays, it’s a little hard to qualify when you are on a fixed income. There are some limited options when it comes to getting a mortgage or loan when retired.

The popular option is to get HELOC which is secured against your home equity. An alternative is a reverse mortgage. This is an equity based loan for Canadians aged 55 and over only.”

“In most instances the answer is yes, providing you have sufficient equity in your home. If it is determined that you do, then you will be able to take out a mortgage registered in 2nd position behind your existing 1st mortgage.

This new mortgage can be in the form of a line of credit, a debt consolidation loan, a pure equity loan, or a home renovation loan. Taking out another mortgage will not affect your payments or the day to day of your existing mortgage. It will add a new loan and a separate monthly payment to your budget and overall debt picture.”

“We find it helpful to write down every expense for a month or two. Put it on the refrigerator and categorize it as “Groceries”, “Restaurants”, “Other” and make a list of every penny spent that month.

This gives you a better visual of where any extra money is being spent that could be allotted for savings, vacations, retirement. Every little bit helps but knowing where all your money is going is the first steps to allocating it correctly.”

“The best investment is a property that the purchaser can hold on for a long period of time.  When we invest in a property it becomes profitable over a few years.  After the closing costs, transfer tax, and initial improvement investments have been paid off. 

When we purchase a property we can enjoy for at least a few years the chances of the neighborhood developing and improving are higher.  This is when values increase and owners increase the chances of making an interesting profit when they resell.  I always recommend to my buyers to invest in a property they like and can see themselves living in for a long time.”

“The first tip for someone who is struggling to find a buyer for their home is to take a close look at what the true fair market value for the property is. A lot of the times it’s easy to be stuck on a number the neighbour sold for in the past or based on a past appraisal.

However, real estate is very much a factual game and so we have to be willing to put our own desires to the side and look at the data. In most cases this is the solution and a price reduction will typically solve the problem.

A second tip is to assess the condition of the property. If there are odd smells, poor curb appeal, or anything very unique to the property, it’s very common for these factors to reduce the number of potential buyers.”

“Most of us own a home, but most of it belongs to the bank where we got the mortgage. A married couple use their combined credit history to get the mortgage approval with the best possible rate.

If a divorce occurs, and one person stays on in the house, some couples still have their trust in the other spouse and agree to leave the mortgage in both names. Quite often the title of the property will not change either, until it is time to renew the mortgage.

Other couples prefer to  separate everything right away. This will clear their name from the debt and offer no possible risks to the person leaving the title and the mortgage.

For this to happen, the spouse staying on title needs to refinance the property right away and proceed with the transfer of ownership (family transfer).”

“In Canada, it is indeed possible for individuals in their 50s, 60s, 70s, and even 80s to secure a mortgage.

The Canadian Human Rights Act prohibits discrimination based on age and this legal protection is a critical factor in ensuring that older Canadians can consider homeownership or refinancing options without facing undue barriers.

It’s worth noting that while lenders cannot legally discriminate based on age, they do take into account the applicant’s ability to repay the loan. This often includes a comprehensive review of income sources, credit history, and overall financial health.

For seniors, this may mean that lenders will look closely at income sources or net worth to ensure they are stable and able to cover the mortgage payments. Some lenders may be unwilling to consider a 30-year amortization for some older borrowers, but a 25-year amortization is rarely a problem.”

“Consider the following five strategies:

1. Improve your credit score: Lenders typically offer better terms and larger loan amounts to borrowers with higher credit scores. 

2. Increase your income: Higher income can increase the amount you’re eligible to borrow. Consider negotiating a raise, taking on a second job, or starting a side hustle.

3. Reduce your debt-to-income ratio (DTI): Lenders consider your DTI when determining how much you can borrow. Paying off existing debts or reducing your monthly expenses can lower your DTI.

4. Save for a larger down payment: A larger down payment reduces the amount you need to borrow and can result in a larger loan amount. Aim to save at least 20% of the home’s purchase price for a conventional loan.

5. Consider a co-signer: If you have a low income or credit score, a co-signer with a higher income or credit score may help you qualify for a larger loan amount.

By following these strategies and carefully managing your finances, you can increase your chances of qualifying for a larger mortgage and securing the maximum borrowing amount for your home purchase.”

“Interest rates will continue to dictate the outcome of Canada’s housing market in 2024 with the first and second halves showing different pictures.

We expect slow activity and softer prices to persist in the early part of the year as the Bank of Canada maintains its policy rate at a two-decade high and home ownership stays out of reach for many potential buyers.

But, a pivot toward rate cuts mid-year will get the wheels turning faster over the second half or perhaps even sooner. There will be a lot of pent-up demand to satisfy in the market once confidence returns, which could heat things up in a hurry.”

“As we look back at the year that was, we can say 2023 was a year that tested the resilience of Canadian mortgage holders. And as we look forward, there’s optimism that 2024 will be the year of rate relief.

Building on the 400 basis points worth of rate hikes by the Bank of Canada in 2022, borrowers faced an additional three quarter-point hikes in 2023, raising payments for some variable-rate borrowers and those renewing their mortgage.

While mortgage delinquency rates have risen slightly from their record lows, borrowers have largely proven resilient thus far. By the Bank of Canada’s own estimation, roughly 40% of mortgage-holders have already seen their mortgage renew at a higher rate.

The bulk of renewal pain, however, is coming up in the next several years. Analysts estimate about $251 billion in mortgages will come up for renewal in 2024, with another $352 billion worth in 2025.

While the Bank of Canada expects that at least 8 in 10 mortgage holders will face a “relatively large” mortgage payment increase by the end of 2025, expected interest rate cuts in the years ahead should help ease that payment shock.

Falling interest rates in 2024 are also expected to support a rebound in home sales and prices. But forecasters differ on what those growth rates could look like.”

“Looking ahead to 2024, most experts and analysts expect the Canadian housing market to recover gradually as interest rates stabilize and demand returns. CREA forecasts that national home sales will rise by 13.9 percent to 561,090 units in 2024, while the national average home price will increase by 4.7 percent to $702,200.

The main reasons for this optimism are the improving economic outlook and the pent-up demand from buyers who delayed their purchases in 2023.”

“Our best advice regarding renewals is to start early. Begin exploring renewal options at least four months before your current mortgage term expires. This allows ample time to assess market conditions, interest rates, and estimate new payment amounts.

Provide yourself time to adjust your budget to account for higher mortgage payments. Next, shop around. Work with your Mortgage Broker to compare options.  Don’t settle for the first renewal offer you receive; compare rates and terms from multiple lenders to ensure you’re getting the best deal.

Additionally, consider your financial goals and circumstances. Assess whether your current mortgage still aligns with your needs and if refinancing or switching lenders could provide better terms or savings.

“There are some significant challenges when you are retired and need a mortgage or loan. There is no discrimination based on age as lenders usually qualify the mortgage or loans based on an individual’s credit, income and debt load.

If you are receiving a pension, any investment income or rental income, the lender can still consider it for qualification purposes. But nowadays, it’s a little hard to qualify when you are on a fixed income. There are some limited options when it comes to getting a mortgage or loan when retired.

The popular option is to get HELOC which is secured against your home equity. An alternative is a reverse mortgage. This is an equity based loan for Canadians aged 55 and over only.”

“In most instances the answer is yes, providing you have sufficient equity in your home. If it is determined that you do, then you will be able to take out a mortgage registered in 2nd position behind your existing 1st mortgage.

This new mortgage can be in the form of a line of credit, a debt consolidation loan, a pure equity loan, or a home renovation loan. Taking out another mortgage will not affect your payments or the day to day of your existing mortgage. It will add a new loan and a separate monthly payment to your budget and overall debt picture.”

“We find it helpful to write down every expense for a month or two. Put it on the refrigerator and categorize it as “Groceries”, “Restaurants”, “Other” and make a list of every penny spent that month.

This gives you a better visual of where any extra money is being spent that could be allotted for savings, vacations, retirement. Every little bit helps but knowing where all your money is going is the first steps to allocating it correctly.”

“The best investment is a property that the purchaser can hold on for a long period of time.  When we invest in a property it becomes profitable over a few years.  After the closing costs, transfer tax, and initial improvement investments have been paid off. 

When we purchase a property we can enjoy for at least a few years the chances of the neighborhood developing and improving are higher.  This is when values increase and owners increase the chances of making an interesting profit when they resell.  I always recommend to my buyers to invest in a property they like and can see themselves living in for a long time.”

“The first tip for someone who is struggling to find a buyer for their home is to take a close look at what the true fair market value for the property is. A lot of the times it’s easy to be stuck on a number the neighbour sold for in the past or based on a past appraisal.

However, real estate is very much a factual game and so we have to be willing to put our own desires to the side and look at the data. In most cases this is the solution and a price reduction will typically solve the problem.

A second tip is to assess the condition of the property. If there are odd smells, poor curb appeal, or anything very unique to the property, it’s very common for these factors to reduce the number of potential buyers.”

“Most of us own a home, but most of it belongs to the bank where we got the mortgage. A married couple use their combined credit history to get the mortgage approval with the best possible rate.

If a divorce occurs, and one person stays on in the house, some couples still have their trust in the other spouse and agree to leave the mortgage in both names. Quite often the title of the property will not change either, until it is time to renew the mortgage.

Other couples prefer to  separate everything right away. This will clear their name from the debt and offer no possible risks to the person leaving the title and the mortgage.

For this to happen, the spouse staying on title needs to refinance the property right away and proceed with the transfer of ownership (family transfer).”

“In Canada, it is indeed possible for individuals in their 50s, 60s, 70s, and even 80s to secure a mortgage.

The Canadian Human Rights Act prohibits discrimination based on age and this legal protection is a critical factor in ensuring that older Canadians can consider homeownership or refinancing options without facing undue barriers.

It’s worth noting that while lenders cannot legally discriminate based on age, they do take into account the applicant’s ability to repay the loan. This often includes a comprehensive review of income sources, credit history, and overall financial health.

For seniors, this may mean that lenders will look closely at income sources or net worth to ensure they are stable and able to cover the mortgage payments. Some lenders may be unwilling to consider a 30-year amortization for some older borrowers, but a 25-year amortization is rarely a problem.”

“Consider the following five strategies:

1. Improve your credit score: Lenders typically offer better terms and larger loan amounts to borrowers with higher credit scores. 

2. Increase your income: Higher income can increase the amount you’re eligible to borrow. Consider negotiating a raise, taking on a second job, or starting a side hustle.

3. Reduce your debt-to-income ratio (DTI): Lenders consider your DTI when determining how much you can borrow. Paying off existing debts or reducing your monthly expenses can lower your DTI.

4. Save for a larger down payment: A larger down payment reduces the amount you need to borrow and can result in a larger loan amount. Aim to save at least 20% of the home’s purchase price for a conventional loan.

5. Consider a co-signer: If you have a low income or credit score, a co-signer with a higher income or credit score may help you qualify for a larger loan amount.

By following these strategies and carefully managing your finances, you can increase your chances of qualifying for a larger mortgage and securing the maximum borrowing amount for your home purchase.”