Latest in Mortgage News, COVID-19, and Economic Recovery.
Diane Gogar • June 24, 2020
Although the volume of news over the last month has been pretty tame in comparison to when COVID-19 initially hit, there has still been a lot going on. If you find yourself wondering about the current state of affairs as it relates to real estate, mortgage financing, and the recovery of our economy mid and post-pandemic, you’ve come to the right place!
Here is a quick recap, a look forward, and links to many good sources of information!
Questionable economic outlook.
Back in the third week of May, the head of the Canadian Mortgage and Housing Corporation (CMHC) made some pretty gloomy predictions.
These Included a potential decrease in house prices of 18%, a jump in mortgage deferrals by 20% from 12% by September, and a debt-to-GDP ratio jump from 99% to 130% by Q3.
However, this particular economic outlook wasn’t widely accepted in the mortgage industry and was seen more as an absolute worst-case scenario. Despite this, CMHC went ahead and made changes to their underwriting guidelines
and qualifying criteria for insured mortgages.
CMHC changes policy for insured mortgages.
On June 4th, 2020, CMHC announced that they would be making changes to their underwriting qualification effective July 1st 2020.
Essentially, they have lowered the buying power of anyone looking for an insured mortgage by up to 10% by limiting the Gross/Total Debt Servicing (GDS/TDS) ratios to 35% and 42% respectively. They changed the credit score requirements to a minimum of 680 for at least one borrower. While they also removed non-traditional sources of down payment that increase indebtedness, (borrowed downpayment). A gifted downpayment from a family member is still acceptable.
Genworth and Canada Guaranty don’t plan on changing guidelines.
In response to CMHC’s changes, the other two mortgage insurers in Canada made announcements that they would not be changing their guidelines.
“Genworth Canada believes that its risk management framework, its dynamic underwriting policies and processes and its ongoing monitoring of conditions and market developments allow it to prudently adjudicate and manage its mortgage insurance exposure, including its exposure to this segment of borrowers with lower credit scores or higher debt service ratios,” said Stuart Levings, President and CEO.
“Canada Guaranty confirms that no changes to underwriting policy are contemplated as a result of recent industry announcements… Given implementation of the qualifying stress test and historic default patterns, Canada Guaranty does not anticipate borrower debt service ratios at time of origination to be a significant predictor of mortgage defaults.”
So although CMHC is taking a very pessimistic view towards our economic recovery and has made it harder to qualify for an insured mortgage going forward, Genworth and Canada Guaranty will be there to make sure more Canadians have access to insured mortgage products.
Economic Outlook from the Bank of Canada.
On June 22nd, Tiff Macklem, the new governor of the Bank of Canada, released his first public press release called Monetary Policy in the Context of COVID-19.
“Currently, we expect growth to resume in the third quarter. The economy will get an immediate boost as containment measures are lifted, people are called back to work, and households resume some of their normal activities. But it will be important not to assume that these growth rates will continue beyond the reopening phase. The pandemic is likely to inflict some lasting damage to demand and supply. The recovery will likely be prolonged and bumpy, with the potential for setbacks along the way.”
Conference Board of Canada.
In a sizeable release, the Conference Board of Canada shared their Canadian Outlook Summary: Summer 2020.
“With the worst of the recession likely over, the outlook for 2021 is brighter. The economy is forecast to rebound by 6.7 per cent in 2021 and 4.8 per cent in 2022. As the threat of the pandemic eases, how well the reopening of the economy and the withdrawal of government support is managed will be a crucial determinant of the economy’s trajectory over the next several years.”
Business as usual.
By all accounts, it’s business as usual amid this global pandemic. Although COVID-19 has impacted the number of houses being bought and sold, prices haven’t dropped. CMHC has made it harder to qualify for an insured mortgage through them, but you have two other insurers providing options, so it’s not a big deal.
If you’re looking to make a move or need to discuss mortgage financing, please don’t hesitate to contact me anytime. I would love to work with you!
Thinking About Selling Your Home? Start With These 3 Key Questions Selling your home is a major move—emotionally, financially, and logistically. Whether you're upsizing, downsizing, relocating, or just ready for a change, there are a few essential questions you should have answers to before you list that "For Sale" sign. 1. How Will I Get My Home Sale-Ready? Before your property hits the market, you’ll want to make sure it puts its best foot forward. That starts with understanding its current market value—and ends with a plan to maximize its appeal. A real estate professional can walk you through what similar homes in your area have sold for and help tailor a prep plan that aligns with current market conditions. Here are some things you might want to consider: Decluttering and removing personal items Minor touch-ups or repairs Fresh paint inside (and maybe outside too) Updated lighting or fixtures Professional staging Landscaping or exterior cleanup High-quality photos and possibly a virtual tour These aren’t must-dos, but smart investments here can often translate to a higher sale price and faster sale. 2. What Will It Actually Cost to Sell? It’s easy to look at the selling price and subtract your mortgage balance—but the real math is more nuanced. Here's a breakdown of the typical costs involved in selling a home: Real estate agent commissions (plus GST/HST) Legal fees Mortgage discharge fees (and possibly a penalty) Utility and property tax adjustments Moving expenses and/or storage costs That mortgage penalty can be especially tricky—it can sometimes be thousands of dollars, depending on your lender and how much time is left in your term. Not sure what it might cost you? I can help you estimate it. 3. What’s My Plan After the Sale? Knowing your next step is just as important as selling your current home. If you're buying again, don’t assume you’ll automatically qualify for a new mortgage just because you’ve had one before. Lending rules change, and so might your financial situation. Before you sell, talk to a mortgage professional to find out what you’re pre-approved for and what options are available. If you're planning to rent or relocate temporarily, think about timelines, storage, and transition costs. Clarity and preparation go a long way. The best way to reduce stress and make confident decisions is to work with professionals you trust—and ask all the questions you need. If you’re thinking about selling and want help mapping out your next steps, I’d be happy to chat anytime. Let’s make a smart plan, together.
As patios wind down and pumpkin spice ramps up, fall is the perfect reset for your home—and your homeowner game plan. These quick wins boost comfort, curb appeal, and efficiency now, and set you up for a low-stress winter (and a strong spring market). 1) Safety & “silent leak” checks (Weekend-ready) Clean gutters & downspouts. Add leaf guards where trees overhang. Roof scan. Look for lifted shingles, cracked flashings, or moss. Seal the shell. Re-caulk window/door trim; replace weatherstripping. Test alarms. New batteries for smoke/CO detectors; add one near bedrooms. Why it matters: Prevent water intrusion and heat loss before storms roll in. 2) Heat smarter, not harder Furnace/boiler tune-up and filter change. Smart thermostat with schedules and geofencing. Draft hunt. Foam gaskets behind outlets, door sweeps on exterior doors. ROI tip: Efficiency upgrades lower monthly bills and can improve lender ratios if you’re eyeing a refinance later. 3) Fall-proof your yard (so spring you says “thanks”) Aerate + overseed + fall fertilize for thicker turf next year. Trim trees/shrubs away from siding and power lines. Mulch perennials and plant spring bulbs now. Shut off/bleed exterior taps and store hoses to avoid burst pipes. 4) Extend outdoor season (cozy edition) Portable fire pit or propane heater + layered blankets. Path/step lighting for darker evenings (solar or low-voltage). Weather-resistant storage for cushions/tools to preserve value. Neighborhood curb appeal: Warm lighting and tidy beds make a big first impression if you list in shoulder season. 5) Water management = winter peace of mind Re-grade low spots and add downspout extensions (2–3+ metres). Check sump pump (and backup). Look for efflorescence or damp corners in the basement. 6) Mini-renos that punch above their weight Entry/mudroom upgrade: hooks, bench, boot trays, closed storage. Laundry room tune-up: counter over machines, sorting bins, task lighting. Kitchen refresh: new hardware, tap, and under-cabinet lighting in one afternoon. Budget guide: Many of these land under a micro-reno budget—perfect for a modest line of credit. 7) Indoor air quality tune-up Deep clean vents and dryers (including the rigid duct). Add door mats (exterior + interior) to catch grit/salt. Houseplants or HEPA purifier for closed-window months. Fast Timeline (pin this to the fridge) Late August–September Gutters/downspouts, roof/caulking, HVAC service, lawn care, plant bulbs, exterior tap shut-off plan, path lighting. October Weatherstripping/sweeps, fire pit setup, organize mudroom/garage, test alarms, sump check, downspout extensions, dryer vent cleaning. Financing smarter: make your mortgage work for your home Annual mortgage check-in. As rates, income, and goals evolve, a quick review can free up cash flow or open options for a small fall project budget. HELOC vs. top-up refinance. For bite-size projects, a HELOC can be flexible. For bigger renos you plan to pay down, a top-up refi might make more sense. Bundle & prioritize. Knock out the high-impact, low-cost items first (air sealing, safety, water management) before the cosmetic upgrades. Not sure which route fits your fall plans? We’ll run the numbers and map the best financing path for your specific budget and goals. Quick Checklist (copy/paste) ☐ Clean gutters/downspouts; add guards ☐ Roof & flashing visual check ☐ Re-caulk, weatherstrip, add door sweeps ☐ HVAC service + new filter ☐ Aerate/overseed/fertilize; trim trees; plant bulbs ☐ Path & entry lighting ☐ Drain/bleed outdoor taps; store hoses ☐ Downspout extensions; sump test ☐ Dryer vent cleaning ☐ Mudroom/garage organization ☐ Schedule mortgage review / discuss HELOC vs refi Ready to make fall your low-stress season? Book a quick fall mortgage check-up—15 minutes to see if a small credit line or a tweak to your current mortgage could cover your priority projects without straining cash flow.
