Also in today’s edition: Rogers’ massive MLSE deal and cuts to temporary residents
Good morning. We crunch the numbers on Canada ’s new mortgage rules – more on that below, along with Rogers ’ massive $4.7-billion takeover of Maple Leaf Sports & Entertainment and Ottawa ’s fresh cuts to temporary foreign residents. But first:, meant to make it easier for buyers to afford pricier homes.
When Ottawa’s new rules go into effect Dec. 15, Canadians will be able to snag a mortgage with default insurance – which is required if your down payment is under 20 per cent – for homes worth as much as $1.5-million, up from a $1-million cap. First-time buyers can also stretch out their payments over 30 years, instead of a maximum of 25, as can anyone purchasing a new build.inevitably, the devil’s in the details.
To show how these rules work together, Alini offers the example of a first-time buyer eyeing a $1,082,200 property, which is the average home price in Toronto. Right now, to obtain a 25-year mortgage, they’d need to put 20-per-cent down. But they couldn’t purchase insurance on the mortgage, since the home costs more than $1-million, so the lowest five-year fixed rate available to them on Ratehub is 4.79 per cent.
Then there’s the nearly $150,000 in interest that’ll have to be scrounged up from somewhere. Already, Canada’s household debt burden is one of the very highest in the world. While wea bit of late, the average household still owes around $1.76 for every dollar of disposable income. If, at the end of 2024, Canadians take advantage of these new rules to grab costly homes and 30-year mortgages, it’d be worth checking back in on that debt-to-income ratio when 2054 rolls around.With its $4.
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