Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
consider moving your money from the housing market to financial markets or gold due to high mortgage rates and tough guidelines. Home prices may need to drop significantly before things stabilize. Seeking advice from a financial advisor who understands the market could be helpful in making the right decisions.
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
First time home buyer candidate here! Feel like the government is just moving the goal post as I try to save on the downpayment and hit the goal. The hypocrisy of the self proclaimed Liberal Government is actually making rich richer and poor poorer by making generational slavery.
@@growwithnav , there is a very good video analysis by CBC. That has the title "Do we really want the housing to be affordable?!". It is about the people of Canada and their expectations about the housing prices since most of everyone (unlike you, Navjot) in Canada has bought a home to build equity as the biggest investment asset class and build wealth. The government wants the same. They can't let the Canadian people down by slowing the average typical growth (~4%) on the housing market. No one wants house prices to grow slower than 4%, let alone go down or be affordable. If housing were to grow slower than this, people would invest in other asset classes (stock, US real estate, ETFs etc) and not make banks and the government rich here.
He is talking only about Mortgage - Add Home insurance; property tax; Hydro; water; Gas; Car insurance; Home internet; Phone; Gas and Grocery...............................So husbands salary goes in paying mortgage and wife salary goes in paying all bills. At the end of month in Hand - Babaji ka Thullu.....................And that also if both have 100K salary each.
Right analysis Navjot. I saw these number yesterday itself when I heard the news I was wondering why are they playing with Canadians. Future doesn't look good.
Hey Navjot, watching from Sydney, Australia. It’s surprising that Canada hasn’t had the 5% and 30 yr mortgage rule, given the high house prices in Greater Toronto and BC. With these changes, your system is getting closer to ours in Australia, but it might drive prices even higher. - In Australia, we've had the 5% down payment rule for some time, with no cap. However, our Mortgage Insurance (LMI) is lower at 2%, not 4%. If you're in specialized fields like medicine or finance, you can skip LMI with a 10% down payment. Many banks also offer 85% LVR with no LMI for IT professionals. - We do have stamp duty, which varies by state but averages around 2%. On the plus side, there’s no ongoing property tax for owner-occupied homes(or minimal prop tax for investor). First home buyers get stamp duty exemptions up to $650k and discounts up to $800k. Sydney’s market is tough, anything livable starts at $900k, with a median price of $1.6M. Wages here are higher than in Canada, though. The median wage is just over $100k, and household incomes of $250k+ are common. IT households often reach $300k+, which keeps buyers in the $1.6M range. Looking at this trend, it’s quite likely Canada’s housing market could head in the same direction as Australia’s. Who knows? It might even create a business case for higher wages.
I work with commercial real estate builders are taking 50 year mortgage because with 25 and 30 year of mortgage they cannot pay their monthly mortgage payments.
I am at the beginning of my "investment journey", planning to put 85K into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
The issue is people have the "I want to do it myself mentality" but not equipped enough for a crash, hence get burnt. Ideally, advisors are reps for investing jobs, and at first-hand encounter, my portfolio has yielded over 300% since 2020 just after the pandemic to date.
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Until 2008, we had no down payment and 40 years amortization. What the government has relaxed is what they have tightened before. Why the government did this? Per Capita GDP is going down. In simple terms, people are getting smaller pay checks, because we have too many immigrants, and employers are paying less. I was a first time buyer, until I realized this. Government does not want the house price to go low, because it is not good for economy and their tax revenue. Banks do not want the price to go down, they lend more money and make more interest income, realtors want higher price for their commission, same goes to the mortgage broker. Seller does not want the price to go down. All these people have control over the market. Home buyer only has a wish and perhaps some hard earned and saved money. If the government wants to remove fraud, they should allow any number of years for amortization but the income should be verified directly with CRA. This will bring all the frauds to a screeching halt.
Now the agents are looking for the first-time homebuyers who might be idiot enough to take on these large debts. However, there is a scarcity of idiots in the market. The era of real estate market manipulation is over. The only way forward is to start fresh. Giving high risk subprime mortgages just shows how big of a mess it is.
You are 100% Correct it seems like someone there making this kind of huge decisions don't know basic Math 🤔. In what world does it make sense a lot of people cannot afford a home right now and streching to 30 years up to 1.5 Milly with less than 20% is just stupid. There is a law of cause and effect by the time they realize that it will be someone's else problem "All of us the Taxpayers " 😮
@@jitheshl7037 Yup and also mentaility among politician / govt guys who owns houses ...like we own houses already and we can't let it go down ...pathetic look all around.
Simple calc below to get how overpriced the market is in Toronto: Average post tax cash flow for a family in Toronto 7k. Considering both work and earn. Ideal expense for rent: 35% = 2450 Rental yield should be 4%, which gives price for a Semi detached house at 735k. Semi detached price right now 1M. So, its already 35% overpriced. They are just delaying this correction with all these tactics. Eventually, with immigration control and more housing supply, real estate is bound to correct 30-35%. PS. The basements were not made to rent out. :P
Sure… there are many more relevant numbers that blow this simple calculation out of the water :) but I am sure you are good at numbers and research and can find it for yourself. The market has corrected 20-25% already - we still don’t call it a crash. And after these surprising new rules, and BoC being aggressive on rate cuts, you still think the govt wants the crash? Don’t get me wrong , I am with you on a much needed correction :) it’s important to sustain the market long term.
Hi Nav, great video for a first timer checking in your channel. You mentioned 1.5 M cap insured mortgage is only for first time home buyers but I believe that cap is applicable for all buyers (not just first time). Also, any new build home gets 30 year amortization rather than just to first time buyer. I am sure you imply that but I am only articulating here. Thanks!
Great Information Nav. In my opinion its a great move by Banks for the first time home buyer, while i do not disagree that you are paying more intrest on your mortgage, i feel 30 year this is a great oppertunity for people to get into real estate and build equity. On a 1 million mortgage divided by 5 equal terms you are paying approx 200k in principal every term, now with 30 year mortgage on a same amount you are building 165k principal per 5 year term, so its a great head start for someone who cannot afford mortgage with current rules. To sum up in 30 years 500000, will be equal to 50 k in todays value and 500k intrest will make u sit on a minimuk 6-7 million $ equity. Historicaly, it has been prooved that minimum wage doubles every 22yrs, which itself tells how the prices of houses are going to inflate in coming year. Its a great oppertunity to make wealth guys.
Thank you nav for the info, its so true i don't know what this government is doing, will cause more issues than resolve. Continued success for you nav.
I am trying to buy an home in Surrey and want to bid the home for 1.6m . But my realtor says now this home will go for 1.9m with this rule . And in coming weeks minimum price for home in Surrey will be 2.5m . So buy fast for 1.9m .
Amazing video and I always like watching the analysis and home work you do. All these policy changes would have been okay if the pay stub also increases anually with that rate. Back in India, people used to go onsite for work and clear debt sooner with dollars, but here I'm not sure how one could really close a 30 yr mortgage if somebody is already touching 40's. I dont think any young canadian or a first time home buyer is looking to take a shot at 1.5M home. So to whom thiese changes really meant? Paying more grand to the same home doesnt mean it becomes more valuable or actual increase in worth. So definitiely if somebody is in late 30's or early 40's, high chances that they will pass on the legacy of paying mortgage to their kids and future generations. Really somebody foolish only could fall intothis trap.
Pa Ji, the exception case that you have mentioned that may work WILL indeed be the helping hand for many people who don’t want buy homes 100km outside GTA, they will buy it with 120k down and rent out the basement which is more affordable and a chance to come out of life long rentals. I think you have downplayed the importance of this category which will be widely useful to many. Cheers
It's Just a copy paste from US model for more affordability without providing and other opportunities to become eligible for houses. In United states its very common to have two jobs to afford the house where in Canada you still hunting for the first job 30-year mortgage will not help either.
There is something you are missing Completely ... In US You can lock a rate of 30 years and you don't have to keep looking for a new rate every 5 years ... That makes a lot of difference
@@divyarakhiani8517 It’s Simple Game of demand and supply and providing enough opportunities in terms of employment to full-fill in house demand Canada clearly missing on employment front even India has only done on IT front plus we have huge population issue only China has replicate US model but it comes with lot democratic cost.
Not in the short term. They can’t go up. But the market will improve and all these will play a major role. This announcement is much bigger than we can imagine, especially when the economy will improve. But only time will tell.
Hey Nav! You mentioned about making 13 payment to the mortgage to pay down in 25 years. However investing that extra amount each year would generate higher return even factoring in that extra interest payments. Just my opinion.
I think the government should have just gone ahead and made it 35 to 45 years amortization. So people will just realize that by the time they retire, they just paid off a mortgage.
Is this a smart move? Saving for a 20% downpayment, but only putting 5% down and getting mortgage insurance to keep interest rates lower. Then, doing a lump sump down (15%) and requesting cancelation of mortgage insurance while keeping the same lower interest rate? Honestly, I'm not sure if this is even possible Thoughts on this?
It can't blow up that much. Even if you put 20% down for 1.5M you need household income of 250k.. ATLEAST. IS CHRISTIA FREELAND EDUCATED? This is best case scenario, most prob you need higher income. what first time homebuyers will have that kinda income. And these 1.5 M houses are the ones that sold for 700k 4 years back and also they were brand new. They want you to take debt to make someone else rich.
@@growwithnav, young married people with their both parents on each side can have them become a co-signed on the mortgage and be able to afford the 1.5M home with the minimum downpayment instead of 20% despite of not having $290k income
Hi Nav! I love watching your videos, I watch every video. Thank you for providing valuable information. I have one question here if you can answer, in your first example you showed mortgage insurance at the time of buy as well as at re-financing. At the time of re-financing, it should be taken as pro-rata basis otherwise it’s not fair. Can you please also make video on CHMC mortgage insurance. How they charge and conditions?
Good for people who want to purchase condos whose prices will fall down due to reduced demand ...Still there are people who just want a roof over the head and not everybody is into 1 million detached properties and renting basements to deal with nuisance of tenants
Too much optimistic view. Inflation will come back if it happens (ofcourse by 2026, 2025 will be easy sailing due to base effect) and Bond market will keep BoC in check (rates will be low for long time, lol). Labor market and Immigration might not support this time as it did post Covid, unless we hear MMT or UBI chatter again...
Amazing video! Gave me a very good perspective! Does this mean going for a variable rate now is not that good an idea ? If inflation were to go up, then interest rate would go up as well, so choosing to go for a variable interest rate now by seeing the interest rate cuts is not a good idea right ?
To increase affordability real estate prices need to significantly DROP. Period. Yet that is the one thing Canada REFUSES to do and continues to borrow from the future. Not only your whole life, but your children's lives, and now maybe even theirs will be forced to pay for your the burden incurred today. Even if not literally the mortgage payments, they will definitely be paying through lost opportunity and quality of life.
@@growwithnav gov't needs to crack down on investors, and I don't mean foreign buyers or from illegal money, I mean literally the large proportion of local Canadians who are turning real estate into a purely investment driven opportunity where the profits are too lucrative to ignore... buy property, rent or flip, use funds to buy more, and repeat... this has become the life goal of most Canadians. The upkeep costs for buying and holding property like property tax are also kept artificially small relative to the values of the properties, making it very easy to buy and hold, and being house rich while income poor is also a great way to avoid a lot of taxes while still being very wealthy under the covers. This and more needs to stop, so RE can come back to being strictly for people to live as one of life's necessities. There are many ways to go about it but since the gov't and most locals are part of the scheme it just won't happen.
Hey Navjot, excellent video that covers all the important aspects. I wanted to reach out to you to clarify the comment on the slide at 14:15: "This only makes sense if you buy a home with a rentable basement unit." Do correct me, but my understanding is that you cannot use a CMHC mortgage product to rent out, and it has to be your primary residence.
Hi Nav! Thanks so much for your informative video! It's my first time watching one of your videos and I'm already subscribed! I'm a first time home buyer (immigrant) and it sounds like the prices are just going to keep going up based on this... We have a basic downpayment (enough for 5-10%) and we're hoping to hit the 600k range for a home. We were planning on saving more for a bigger downpayment but now this has me worried. Do you recommend buying this year since the new rules will cause an increase in the home prices?
It might cause home prices to go up… maybe not in 4-5 months , but 8-12 months as interest rates start to come down and these new rules come into full effect… buy when you feel ready :)
First time home buyer here, I live in Toronto and I welcome this new rule. I don’t totally agree with your analysis, ps: I am a CPA! The video smells lot of biases and one-sidedness. Novjot in the making of a mini Robert Kiyosaki😂
The only logical reason I can think of keeping this is because of elections and this decision will keep the core voters aka older Canadians happy as they will not lose equity on their home till elections next year. A largely populist strategy.
@@growwithnav I actually don't want that. but things paves way for that! How the hell we can have a good life if Canada is these expensive to live a peaceful life. You answer me, SIR!!!??
Thank you Navjot. Ever since I heard this news, I was waiting for your video because no one analysis this from the buyer and seller's perspective better than you. How honestly you addressed that these changes will somehow benefit mortgage agent and realtors but not really the First time home buyers. Kudos to your efforts. :)
I think we will still see the rates come down.. that’s what makes this an unpopular move - the market is finally ripe for buyers and this intervention will artificially increase the demand. They should have just let the market take its course!!
I've been investing in Bitcoin by myself. I'm not really happy with what's going on, just few weeks ago I lost about $7,000 in a particular trade. Can you help me out or at least advise me on what to do?
You talk so much and most of it nonsense. When you compare the $1.45 mil purchase non-insured with CMHC insured at 12:44, you miss the fact that you get a better rate from the bank. That's a "big blunder" to use your terminology. There are other mistakes that you make in your assertions, but you'd have to ask me nicely if you want advice. P.S. A more expensive house is not necessarily bigger and require more upkeep, it could be the reverse actually. Property taxes are also not necessarily higher, nobody from the city will enter your house to determine if you have nice furnishings and new appliance or not (as an example). The prop taxes are calculated by location and lot size.
Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
consider moving your money from the housing market to financial markets or gold due to high mortgage rates and tough guidelines. Home prices may need to drop significantly before things stabilize. Seeking advice from a financial advisor who understands the market could be helpful in making the right decisions.
I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.
First time home buyer candidate here! Feel like the government is just moving the goal post as I try to save on the downpayment and hit the goal. The hypocrisy of the self proclaimed Liberal Government is actually making rich richer and poor poorer by making generational slavery.
not India
Sad. The market will still be bearish for the next little while though - so we got time 🙌
@@AdityaJape India is way worse if you are not part of the brahman & banya gang
@@growwithnav , there is a very good video analysis by CBC. That has the title "Do we really want the housing to be affordable?!".
It is about the people of Canada and their expectations about the housing prices since most of everyone (unlike you, Navjot) in Canada has bought a home to build equity as the biggest investment asset class and build wealth. The government wants the same. They can't let the Canadian people down by slowing the average typical growth (~4%) on the housing market. No one wants house prices to grow slower than 4%, let alone go down or be affordable.
If housing were to grow slower than this, people would invest in other asset classes (stock, US real estate, ETFs etc) and not make banks and the government rich here.
He is talking only about Mortgage - Add Home insurance; property tax; Hydro; water; Gas; Car insurance; Home internet; Phone; Gas and Grocery...............................So husbands salary goes in paying mortgage and wife salary goes in paying all bills. At the end of month in Hand - Babaji ka Thullu.....................And that also if both have 100K salary each.
Such an amazing video within 24 hours!! Real hard work
🙌🙌
Right analysis Navjot. I saw these number yesterday itself when I heard the news I was wondering why are they playing with Canadians. Future doesn't look good.
Hmmmm… I can’t imagine how the market will play out in 2026-2027 🤯
Its setup to destabilize the housing market on purpose. As yourself why they are doing this? Because they want people rending not owning.
Hey Navjot, watching from Sydney, Australia. It’s surprising that Canada hasn’t had the 5% and 30 yr mortgage rule, given the high house prices in Greater Toronto and BC. With these changes, your system is getting closer to ours in Australia, but it might drive prices even higher.
- In Australia, we've had the 5% down payment rule for some time, with no cap. However, our Mortgage Insurance (LMI) is lower at 2%, not 4%. If you're in specialized fields like medicine or finance, you can skip LMI with a 10% down payment. Many banks also offer 85% LVR with no LMI for IT professionals.
- We do have stamp duty, which varies by state but averages around 2%. On the plus side, there’s no ongoing property tax for owner-occupied homes(or minimal prop tax for investor). First home buyers get stamp duty exemptions up to $650k and discounts up to $800k.
Sydney’s market is tough, anything livable starts at $900k, with a median price of $1.6M. Wages here are higher than in Canada, though. The median wage is just over $100k, and household incomes of $250k+ are common. IT households often reach $300k+, which keeps buyers in the $1.6M range.
Looking at this trend, it’s quite likely Canada’s housing market could head in the same direction as Australia’s. Who knows? It might even create a business case for higher wages.
@@thevishahrukh thank you for a very insightful post… very interesting 🙌
I work with commercial real estate builders are taking 50 year mortgage because with 25 and 30 year of mortgage they cannot pay their monthly mortgage payments.
I am at the beginning of my "investment journey", planning to put 85K into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
The issue is people have the "I want to do it myself mentality" but not equipped enough for a crash, hence get burnt. Ideally, advisors are reps for investing jobs, and at first-hand encounter, my portfolio has yielded over 300% since 2020 just after the pandemic to date.
Glad to have stumbled on this comment, Please who is the consultant that assist you and if you don't mind, how do I get in touch with them?
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Until 2008, we had no down payment and 40 years amortization. What the government has relaxed is what they have tightened before. Why the government did this? Per Capita GDP is going down. In simple terms, people are getting smaller pay checks, because we have too many immigrants, and employers are paying less.
I was a first time buyer, until I realized this. Government does not want the house price to go low, because it is not good for economy and their tax revenue. Banks do not want the price to go down, they lend more money and make more interest income, realtors want higher price for their commission, same goes to the mortgage broker. Seller does not want the price to go down. All these people have control over the market. Home buyer only has a wish and perhaps some hard earned and saved money.
If the government wants to remove fraud, they should allow any number of years for amortization but the income should be verified directly with CRA. This will bring all the frauds to a screeching halt.
Agree. Though, it’s always been this way. The govt always sides with businesses and 70% of Canadians that are home owners.
It's crazy that this was rolled out without a proper implementation of CRA income verification. Fraud will be rampant.
Great video! I'm a Mortgage Agent, lots of people were celebrating this cap raise....not me, I thought it was just a bunch of dangerous crap.
🙌🙌
Brilliantly Explained.
Glad it was helpful!
Great job on this video, Nav! One of your best videos.
🙌🙌
Now the agents are looking for the first-time homebuyers who might be idiot enough to take on these large debts. However, there is a scarcity of idiots in the market. The era of real estate market manipulation is over. The only way forward is to start fresh. Giving high risk subprime mortgages just shows how big of a mess it is.
I agree .
Basic rule . Buy what you can afford ,nd pay it faster .Then only u can put money in ur pocket not to bank's or govt pocket .
💯
You are 100% Correct it seems like someone there making this kind of huge decisions don't know basic Math 🤔. In what world does it make sense a lot of people cannot afford a home right now and streching to 30 years up to 1.5 Milly with less than 20% is just stupid. There is a law of cause and effect by the time they realize that it will be someone's else problem "All of us the Taxpayers " 😮
Exactly!! Crazy…
It's coming from thinking only "How can we keep home prices to keep going up?" as opposed to "How can we make homes more affordable?".
@@jitheshl7037 Yup and also mentaility among politician / govt guys who owns houses ...like we own houses already and we can't let it go down ...pathetic look all around.
Hope so middle class people will understand this math nd make right decision .
Happy to see you here
Simple calc below to get how overpriced the market is in Toronto:
Average post tax cash flow for a family in Toronto 7k. Considering both work and earn.
Ideal expense for rent: 35% = 2450
Rental yield should be 4%, which gives price for a Semi detached house at 735k.
Semi detached price right now 1M. So, its already 35% overpriced. They are just delaying this correction with all these tactics.
Eventually, with immigration control and more housing supply, real estate is bound to correct 30-35%.
PS. The basements were not made to rent out. :P
Sure… there are many more relevant numbers that blow this simple calculation out of the water :) but I am sure you are good at numbers and research and can find it for yourself.
The market has corrected 20-25% already - we still don’t call it a crash.
And after these surprising new rules, and BoC being aggressive on rate cuts, you still think the govt wants the crash?
Don’t get me wrong , I am with you on a much needed correction :) it’s important to sustain the market long term.
It’s good that loan limits have increased in addition to rate cuts at USA I’m already seeing refinance interest here in USA as well😂
Great video Nav.
Hi Nav, great video for a first timer checking in your channel.
You mentioned 1.5 M cap insured mortgage is only for first time home buyers but I believe that cap is applicable for all buyers (not just first time). Also, any new build home gets 30 year amortization rather than just to first time buyer. I am sure you imply that but I am only articulating here.
Thanks!
Any home (not just new build) gets 30 year amortization.
You are right about the 1.5 cap. You can only qualify for a $1.5M home at
You haven’t touched the point that existing home owners can buy a new home from builder with 30 year amortization and 1.5 M with less than 20% down
It’s for all builds - new and old now.
Excellent video. Govt should incentivize SME businesses instead. having a GDP relying on real estate is not sustainable.
💯
The Govt caused the housing issues in the first place.
Your analysis is thorough, and the numbers you presented are clear and logical. I fully agree with the points you made in the video.
🙌🙌
I was eagerly waiting for your take on this. Did not disappoint! Thank you for your detailed analysis and well informed opinion on these changes.
Glad you enjoyed it!
I believe the insured mortgage cap for 1 m to 1.5 m is for all buyers not just first time home buyers !!
Wow. Perfect analysis. Thanks so much
Glad you liked it!
Great work!
Thanks!
Excellent Analysis Navjot ji. You are absolutely right. Well done 💐💐👏👏
Thanks a lot
Navjot, great video. Now, I am desperatly looking for a video titled "How to save yourself with Canada's new mortgage rules".
But there will be less buyers for old homes now if supply increases
Thanks. Excellent analysis.
🙌
Such a great and eye opener video. Much appreciate the detailed explanations..
Glad it was helpful!
Great Information Nav.
In my opinion its a great move by Banks for the first time home buyer, while i do not disagree that you are paying more intrest on your mortgage, i feel 30 year this is a great oppertunity for people to get into real estate and build equity.
On a 1 million mortgage divided by 5 equal terms you are paying approx 200k in principal every term, now with 30 year mortgage on a same amount you are building 165k principal per 5 year term, so its a great head start for someone who cannot afford mortgage with current rules.
To sum up in 30 years 500000, will be equal to 50 k in todays value and 500k intrest will make u sit on a minimuk 6-7 million $ equity.
Historicaly, it has been prooved that minimum wage doubles every 22yrs, which itself tells how the prices of houses are going to inflate in coming year.
Its a great oppertunity to make wealth guys.
💯💯
Such an amazing video!! Thanks Nav🙏🙏
Glad you liked it!!
Good Insights 👍 Loved the video.
Thank you 🙏
Thank you nav for the info, its so true i don't know what this government is doing, will cause more issues than resolve. Continued success for you nav.
🙌🙌
I am trying to buy an home in Surrey and want to bid the home for 1.6m . But my realtor says now this home will go for 1.9m with this rule . And in coming weeks minimum price for home in Surrey will be 2.5m . So buy fast for 1.9m .
That is bullshit. You need a new realtor :)
Fire him… today!
Great thorough breakdown.
Thank you 😊
No stress test at renewals for all mortgages? Any updates on that
Good for home owners for sure 🙌
very simple... it just increase prices for smaller homes, because the demand will be high for single family homes.
Cherry on the top is interest will be lowered to further push the prices higher
🤯
How you calculated that mortgage payment?
Do you think Gov took this decision without discussing with Bank of canada?
For sure they all are part of game.
@@SushilKumarLingala who knows… I hope so..
Amazing video and I always like watching the analysis and home work you do. All these policy changes would have been okay if the pay stub also increases anually with that rate. Back in India, people used to go onsite for work and clear debt sooner with dollars, but here I'm not sure how one could really close a 30 yr mortgage if somebody is already touching 40's. I dont think any young canadian or a first time home buyer is looking to take a shot at 1.5M home. So to whom thiese changes really meant? Paying more grand to the same home doesnt mean it becomes more valuable or actual increase in worth. So definitiely if somebody is in late 30's or early 40's, high chances that they will pass on the legacy of paying mortgage to their kids and future generations. Really somebody foolish only could fall intothis trap.
I agree, unless once makes a lot of money… usually business owners would buy something like this and be able to pay off quickly.
Pa Ji, the exception case that you have mentioned that may work WILL indeed be the helping hand for many people who don’t want buy homes 100km outside GTA, they will buy it with 120k down and rent out the basement which is more affordable and a chance to come out of life long rentals. I think you have downplayed the importance of this category which will be widely useful to many. Cheers
I agree. The problem is, for how long… the $1M + homes will attract more bids and drive that segment up quickly
It's Just a copy paste from US model for more affordability without providing and other opportunities to become eligible for houses. In United states its very common to have two jobs to afford the house where in Canada you still hunting for the first job 30-year mortgage will not help either.
Agree… especially today when the economy sucks
There is something you are missing Completely ... In US You can lock a rate of 30 years and you don't have to keep looking for a new rate every 5 years ...
That makes a lot of difference
@@divyarakhiani8517 It’s Simple Game of demand and supply and providing enough opportunities in terms of employment to full-fill in house demand Canada clearly missing on employment front even India has only done on IT front plus we have huge population issue only China has replicate US model but it comes with lot democratic cost.
It is hard to imagine prices will go up ! Wishful thinking ....very divergent view from reality/affordability, which is crushed
Not in the short term. They can’t go up. But the market will improve and all these will play a major role. This announcement is much bigger than we can imagine, especially when the economy will improve. But only time will tell.
Hey Nav! You mentioned about making 13 payment to the mortgage to pay down in 25 years. However investing that extra amount each year would generate higher return even factoring in that extra interest payments. Just my opinion.
I agree. Do watch the previous video on retirement planning to get a context of where I am coming from
I love your videos, you always give great real advice! are you a financial planner as well?
Thanks :) no, not a financial planner
@@growwithnav could you be my financial advisor please? 😄
I think the government should have just gone ahead and made it 35 to 45 years amortization. So people will just realize that by the time they retire, they just paid off a mortgage.
That would be crazy… but I won’t be surprise if they push the conventional loans to 35-40 in the name of affordability!!
@@growwithnav true. May be in next 10 years
Lol! Welcome to Zimbabwe!
Hi Nav just wondering to know what mortgage rate did you use for the example you use thanks
4.5%
Thinking of buying a house? Won't even qualify in GTA, Vanc,Vic
What do we do then?
I would never buy a house in this country on a loan. Especially, a big 'No' for 30 years. Being in debt for 30 years is a receipe of disaster for me.
👍🙌
Is this a smart move?
Saving for a 20% downpayment, but only putting 5% down and getting mortgage insurance to keep interest rates lower.
Then, doing a lump sump down (15%) and requesting cancelation of mortgage insurance while keeping the same lower interest rate?
Honestly, I'm not sure if this is even possible
Thoughts on this?
You can’t cancel mortgage insurance in canada :)
If we can lock in mortagage rates for 30 years like in the u.s maybe
I wish.
Will bringing the down payment to 15% on C$1 million home for first home buyers a good idea?
No
It can't blow up that much. Even if you put 20% down for 1.5M you need household income of 250k.. ATLEAST. IS CHRISTIA FREELAND EDUCATED? This is best case scenario, most prob you need higher income. what first time homebuyers will have that kinda income.
And these 1.5 M houses are the ones that sold for 700k 4 years back and also they were brand new. They want you to take debt to make someone else rich.
Agree… stupid stupid rule in the name of affordability that can only be afforded by the top 3% Canadians
Or mortgage fraud will increase!!
@@growwithnav, young married people with their both parents on each side can have them become a co-signed on the mortgage and be able to afford the 1.5M home with the minimum downpayment instead of 20% despite of not having $290k income
The payments will still be high. They should not do it, but I know where you coming from.
She is FREELAND, everything is free lol
Hi Nav! I love watching your videos, I watch every video. Thank you for providing valuable information. I have one question here if you can answer, in your first example you showed mortgage insurance at the time of buy as well as at re-financing. At the time of re-financing, it should be taken as pro-rata basis otherwise it’s not fair. Can you please also make video on CHMC mortgage insurance. How they charge and conditions?
This would mean the demand for condo market may further go down….
True… Condo market may not move as much… only freeholds and homes with rentable basements is my gut feeling
Good for people who want to purchase condos whose prices will fall down due to reduced demand ...Still there are people who just want a roof over the head and not everybody is into 1 million detached properties and renting basements to deal with nuisance of tenants
Too much optimistic view. Inflation will come back if it happens (ofcourse by 2026, 2025 will be easy sailing due to base effect) and Bond market will keep BoC in check (rates will be low for long time, lol). Labor market and Immigration might not support this time as it did post Covid, unless we hear MMT or UBI chatter again...
This is just going to drive up home prices just because people can get eligible for more mortgage, people are desperate.
Hmm very possible
U speaks so fast brother , I have to pause u couple of times and sometimes replay again
Sorry, will try to improve :)
Amazing video! Gave me a very good perspective!
Does this mean going for a variable rate now is not that good an idea ? If inflation were to go up, then interest rate would go up as well, so choosing to go for a variable interest rate now by seeing the interest rate cuts is not a good idea right ?
Too early to say. The rules will only come into effect in Dec, and banks are slow to implement anyways.
To increase affordability real estate prices need to significantly DROP. Period. Yet that is the one thing Canada REFUSES to do and continues to borrow from the future. Not only your whole life, but your children's lives, and now maybe even theirs will be forced to pay for your the burden incurred today. Even if not literally the mortgage payments, they will definitely be paying through lost opportunity and quality of life.
So, what can we do about it?
@@growwithnav Replace this Govt with a competent one. Like the Conservatives.
This was all done by design. Look up UN Agenda 2030
@@growwithnav gov't needs to crack down on investors, and I don't mean foreign buyers or from illegal money, I mean literally the large proportion of local Canadians who are turning real estate into a purely investment driven opportunity where the profits are too lucrative to ignore... buy property, rent or flip, use funds to buy more, and repeat... this has become the life goal of most Canadians. The upkeep costs for buying and holding property like property tax are also kept artificially small relative to the values of the properties, making it very easy to buy and hold, and being house rich while income poor is also a great way to avoid a lot of taxes while still being very wealthy under the covers. This and more needs to stop, so RE can come back to being strictly for people to live as one of life's necessities. There are many ways to go about it but since the gov't and most locals are part of the scheme it just won't happen.
What I meant was, if the govt doesn’t do anything about it - what will you and I do?
The rules are there to save the banks not the people
100% banks always win
Hey Navjot, excellent video that covers all the important aspects. I wanted to reach out to you to clarify the comment on the slide at 14:15: "This only makes sense if you buy a home with a rentable basement unit." Do correct me, but my understanding is that you cannot use a CMHC mortgage product to rent out, and it has to be your primary residence.
If you live in the main house and rent the secondary smaller unit; CMHC will allow that.
Hi Sir, I am planning to close a deal (home purchase) on Dec 31st 2024. Will this 30 years amortization is applicable for me ? Please advise.
That will be too risky. You can’t apply for that mortgage until Dec 16, not enough time unfortunately.
what is the best rate we can lock our interest rate from variable to fixed considering inflation in the future due to these changes?
3.5% is my target for the clients if you are on variable.
For 1 million house how much house hold income required.
Do watch the video. I have a calculation on that… around $200K household income .
Hi Nav! Thanks so much for your informative video! It's my first time watching one of your videos and I'm already subscribed! I'm a first time home buyer (immigrant) and it sounds like the prices are just going to keep going up based on this... We have a basic downpayment (enough for 5-10%) and we're hoping to hit the 600k range for a home. We were planning on saving more for a bigger downpayment but now this has me worried. Do you recommend buying this year since the new rules will cause an increase in the home prices?
It might cause home prices to go up… maybe not in 4-5 months , but 8-12 months as interest rates start to come down and these new rules come into full effect… buy when you feel ready :)
@@growwithnav Thank you! :)
More fools in the market more equity for houses.
Hey, do you think increase in house price means increase in rent for renters? 😅
Not really - maybe in the long run, but if more people can afford to buy, less would rent and the rents may come down.
Rental will go down in near future .so, those who will rely on rent to pay their morgage will stuck in long term .
My mortgage is coming up for renewal. Are you interested in providing me a renewal option?
Sure, you can book a call from the link in the bio.
Can someone choose between 25years or 30years Amortization.. Is it flexible
Yes
First time home buyer here, I live in Toronto and I welcome this new rule. I don’t totally agree with your analysis, ps: I am a CPA! The video smells lot of biases and one-sidedness. Novjot in the making of a mini Robert Kiyosaki😂
what are you talking about?
The only logical reason I can think of keeping this is because of elections and this decision will keep the core voters aka older Canadians happy as they will not lose equity on their home till elections next year. A largely populist strategy.
Yes 💯 %
Time to move
Can I leave Canada??
Sure, if that’s what you want :)
@@growwithnav I actually don't want that. but things paves way for that! How the hell we can have a good life if Canada is these expensive to live a peaceful life. You answer me, SIR!!!??
Yeah man!! You have to give up peace for a few years to live a good life in canada. Totally understand your frustration.
@@growwithnav What do you mean few years ? You practically need to give up peace for all your life here in Canada ....
Thank you Navjot. Ever since I heard this news, I was waiting for your video because no one analysis this from the buyer and seller's perspective better than you. How honestly you addressed that these changes will somehow benefit mortgage agent and realtors but not really the First time home buyers. Kudos to your efforts. :)
Thank you 😊
@growwithnav what's your take on its effects on the upcoming interest rates?
I think we will still see the rates come down.. that’s what makes this an unpopular move - the market is finally ripe for buyers and this intervention will artificially increase the demand. They should have just let the market take its course!!
Hit $115k today. I'm really grateful for all the knowledge and nuggets you had thrown my way over the last months. Started with 14k in January
How please
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I will advise you stop trading on your own if you keep losing. And i don't trade on my own anymore, I always required help and assistance
She's my family personal Broker and also a Broker to many families here in the United states, she is a licensed Broker.
😱Sounds familiar, I have heard her names on several occasions.. And both her success stories on wall street journey!
You talk so much and most of it nonsense. When you compare the $1.45 mil purchase non-insured with CMHC insured at 12:44, you miss the fact that you get a better rate from the bank. That's a "big blunder" to use your terminology. There are other mistakes that you make in your assertions, but you'd have to ask me nicely if you want advice. P.S. A more expensive house is not necessarily bigger and require more upkeep, it could be the reverse actually. Property taxes are also not necessarily higher, nobody from the city will enter your house to determine if you have nice furnishings and new appliance or not (as an example). The prop taxes are calculated by location and lot size.
Thank you
lag gai.....