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Canadians behind on car loans, the lowest mortgage rates and more

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This week in real estate: Canadians are falling behind on credit card and car loans – prompting economists to worry mortgages might be next. Plus, a house that’s a “little bit tree house and a little bit cabin in the woods” and the lowest national fixed- and variable-rate mortgages.Tom Arban/Tom Arban

Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.


As Canadians fall behind on credit cards, are mortgages next?

The strain of large debt loads and high interest rates is obvious in credit cards and vehicle loans: delinquency rates for both are now higher than they were before the pandemic. While they are still relatively low – less than 1 per cent – the trajectory has economists worried that mortgages, a lagging indicator, could be next.

Mortgage delinquencies remain at record lows thanks to the extraordinary steps lenders have taken to shield borrowers from the pain of higher rates, such as allowing homeowners to add unpaid interest to a loan’s principal or stop paying down the principal altogether. But both measures extend the amortization period of a mortgage, creating risks down the road.

The kick-the-can approach is coming under increased pressure. This week, Canada’s banking regulator called on financial institutions to tackle mortgage extensions “before levels of borrower stress become unmanageable.”

 

Wildfires across Canada are expected to contribute to higher home insurance prices across the country, as extreme weather events continue to hit insurers. The insurance industry has seen natural-disaster claims more than quadruple since 2008.

DBRS Morningstar analyst Marcos Alvarez said in a research note the increase in this year’s extreme weather and natural catastrophe losses – along with high inflation – will push home insurance prices higher everywhere.

“No single event will impact the price of insurance premiums, but insurers track the ongoing trends over time, including when wildfire events happen,” Craig Stewart, vice-president of climate change and federal issues at IBC said in an interview. “As an insurer prices risk, we have seen in recent years that Canada is a riskier place to insure.”


In the last eight days, mortgage rates are up in every term tracked, writes Robert McLister, except the 10-year fixed, which no one wants anyway.

With at least 20 bps of increases in almost every instance, that means new borrowers are paying at least $11 more per month, per $100,000 borrowed, than they did at the beginning of last week.

This is a tough time to buy a home. Here are 5 ways Canadians are squeezing into new mortgages

Driving the uptrend is the market reaction to our inflation-preoccupied central banks. Aside from the Bank of Canada’s last 25 bps rate hike on June 7, it and the U.S. Federal Reserve have signalled that more hikes may be en route. Bond yields, which usually drive fixed mortgage rates, have run higher as a result.

Rates are as of June 15, 2023, from providers that advertise rates online and lend in at least nine provinces. Insured rates apply to those buying with less than a 20 per cent down payment, or those switching a pre-existing insured mortgage to a new lender. Uninsured rates apply to refinances and purchases over $1-million and may include applicable lender rate premiums. For providers whose rates vary by province, their highest rate is shown.


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The Toronto home of Rick Galezowski and Maggie Bennedsen.Tom Arban/Tom Arban

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“We wanted this to be a little bit tree house and a little bit cabin in the woods,” architect Rick Galezowski says of his Little Portugal home.Tom Arban/Tom Arban

“We wanted this to be a little bit tree house and a little bit cabin in the woods,” architect Rick Galezowski says about the third floor of the house he and his wife designed five years ago in Toronto’s Little Portugal neighbourhood. The house is crisp and architectural yet soothing and soft: no easy feat, especially with a relatively tight budget. While numbers from five years ago don’t have much relevance today, the construction cost was budgeted at $500,000 and “it ballooned to about 550,” Mr. Galezowski says with a laugh.


  • Home of the Week, 662 Harvest Rd., HamiltonMatthew Young/Matthew Young

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662 Harvest Rd, Hamilton

Sitting 300 feet back from the main road you’d be forgiven for thinking this Hamilton home was an industrial building with its dark exterior and deceptively simple rectilinear profile. A blank brick wall of the garage (the door for which is on the side closest to the main entrance) practically shouts “nothing to see here.” But step inside, and you’ll find a house that is filled with elements that play off each other: The wide-plank oak floors have a warm nutty stain that transition to slightly darker walnut cabinets under the countertops in the kitchen.

The house, which sits on 82 by 482 foot lot, features four bedrooms, and glassed-in combination gym/yoga studio in the basement. Head outside for a patio eating space and barbecue area, along with a new heated pool.

What do you think is the asking price for this house?

a. $2.9-million

b. $1.5-million

c. $3.0-million

d. $2.5-million

a. The asking price is $2.9-million.

 

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End of Manitoba legislature session includes replacement-worker ban, machete rules

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WINNIPEG – Manitoba politicians are expected to pass several bills into law before the likely end of legislature session this evening.

The NDP government, with a solid majority of seats, is getting its omnibus budget bill through.

It enacts tax changes outlined in the spring budget, but also includes unrelated items, such as a ban on replacement workers during labour disputes.

The bill would also make it easier for workers to unionize, and would boost rebates for political campaign expenses.

Another bill expected to pass this evening would place new restrictions on the sale of machetes, in an attempt to crack down on crime.

Among the bills that are not expected to pass this session is one making it harder for landlords to raise rents above the inflation rate.

This report by The Canadian Press was first published Nov. 7, 2024

The Canadian Press. All rights reserved.



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Father charged with second-degree murder in infant’s death: police

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A Richmond Hill, Ont., man has been charged with second-degree murder in the death of his seven-week-old infant earlier this year.

York Regional Police say they were contacted by the York Children’s Aid Society about a child who had been taken to a hospital in Toronto on Jan. 15.

They say the baby had “significant injuries” that could not be explained by the parents.

The infant died three days later.

Police say the baby’s father, 30, was charged with second-degree murder on Oct. 23.

Anyone with more information on the case is urged to contact investigators.

This report by The Canadian Press was first published Nov. 7, 2024.

The Canadian Press. All rights reserved.



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Ontario fast-tracking several bills with little or no debate

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TORONTO – Ontario is pushing through several bills with little or no debate, which the government house leader says is due to a short legislative sitting.

The government has significantly reduced debate and committee time on the proposed law that would force municipalities to seek permission to install bike lanes when they would remove a car lane.

It also passed the fall economic statement that contains legislation to send out $200 cheques to taxpayers with reduced debating time.

The province tabled a bill Wednesday afternoon that would extend the per-vote subsidy program, which funnels money to political parties, until 2027.

That bill passed third reading Thursday morning with no debate and is awaiting royal assent.

Government House Leader Steve Clark did not answer a question about whether the province is speeding up passage of the bills in order to have an election in the spring, which Premier Doug Ford has not ruled out.

This report by The Canadian Press was first published Nov. 7, 2024.

The Canadian Press. All rights reserved.



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