Say hello to TWO more changes that will impact mortgage holders (and seekers).
Change is good—at least in theory (and according to the very old saying).
However, when you’re an education member who currently has (or is in the market for) a mortgage, even the slightest change in taxes, interest rates, and/or regulations can have you counting your pennies and holding your breath.
After all, it was only last month when the Federal Government introduced stricter rules for high ratio mortgages to ensure borrowers could still make good on their payments (in the event interest rates should happen to rise).
It’s almost as if the Feds were trying to give us a not-so-subtle hint that ‘something’ was coming.
Which leads us to the first of the aforementioned changes: mortgage rates are on the rise.
Are you still holding your breath?
Two of the five big banks announced their decision to hike lending rates by as much as 40 basis points as of mid-November. Depending on the outstanding amount owing, that could translate into tens of thousands of dollars in additional payments over the term of the mortgage. That’s the cost of a bathroom or kitchen renovation—or a European trip during summer break.
If you recently renewed your mortgage before the rate increase, congratulations—timing, as they say, is everything.
If your mortgage is coming due in the months ahead, or if you were in the market for a mortgage and were holding out for the lowest rate, don’t stress. Instead, get informed. Financial literacy is your best defense AND offense to proactively deal with sudden changes to mortgage rates.
To help you with that, here are some suggested educator-specific mortgage readings:
- The top 10 tips for getting the most out of your mortgage renewal
- 3 simple strategies to pay your mortgage off 5 years faster
- Home-buying 101: how to choose the right mortgage lender
The next change affects first-time homebuyers: the Ontario Land Transfer Tax rebate is set to double.
Yes, not all news is bad news when it comes to the latest mortgage-related headlines.
Starting in January 2017, first-time homebuyers in Ontario, who have perhaps been feeling the pinch of higher home prices, will get a bigger break to their bottom line.
The maximum provincial Land Transfer Tax (LTT) rebate will double from $2,000 to $4,000.
The provincial LTT applies to all properties in Ontario and is a percentage of the purchase price. However, first-time homebuyers benefit from being able to claim and receive a full rebate of the provincial LTT amount (up to $4,000 maximum as of January 2017).
This is particularly great news if you’re early in your education career and on the lower end of the pay grid.
While the Ontario Government is doubling the rebate on the land-transfer tax for first-time homebuyers, it is also increasing the same tax on homes being sold for over two million dollars by half a percentage point. The increased revenues from the LTT rate increase on luxury homes will help pay for the doubled rebates for first-time buyers.
Wondering how these specific changes could impact you for better or worse? Reach out to us.
Since 1975, we’ve seen thousands of education members through hundreds of changes to mortgage rates, regulations, and more. If you have a particular concern or would like to know all about the many benefits of switching to Educators Financial Group for your lending needs, we’d be happy to chat with you.
Have one of our mortgage agents contact you.
Learn more about the mortgage types and rates we offer exclusively to education members.
Also be sure to check out The Learning Centre to increase your financial literacy on a wide range of topics.
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The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering of tax, legal, accounting or professional advice. Please ensure to consult your accountant and/or legal advisor for specific advice related to your circumstances. Educators Financial Group will not be held responsible or liable for any losses, costs, damages or expenses incurred by reason of reliance as a result of the aforementioned information. The information presented was obtained from sources that are believed to be reliable. However, Educators Financial Group cannot guarantee their completeness or accuracy.