GST Rebate, Missed Credit Payments, and Mortgage Updates
The Canadian Government’s new GST rebate on homes under $1 million, and a partial rebate on homes between $1 million and $1.5 million, has not done much to prevent an overall softening of the real estate market. The GST rebate is great news for the market and First-Time buyers, but it’s hard to overlook some troubling numbers that are starting to be revealed. Recent numbers from Equifax Canada indicate an increase in the number of Canadians who are missing mortgage, auto loan, and credit card payments.
According to Equifax’s Consumer Trends and Insights, 1.4 million consumers missed a credit payment in the first quarter of this year, an increase of 146,000 from the same quarter last year.
“It’s younger consumers and lower-income consumers where we are seeing missed payments rising,” said Rebecca Oakes, vice president of advanced analytics at Equifax Canada.
Missing any payment can affect your credit rating and score, which can cause higher interest rates and reluctance from lenders to lend to you in the future. Consider using your home equity to help you through a difficult time. Rates for alternative lending have never been better, with 1st mortgage rates as low as 5.75% and 2nd mortgage rates as low as 8.99%. Lenders are also offering “no payment” options, lower fees and quick funding solutions.
Prime mortgage rates have not changed significantly, but we have seen a modest increase in some fixed-term rates. We continue to believe that the Bank of Canada will lower rates in the future and suggest that borrowers consider a variable-rate product. The next rate decision is scheduled for the end of July.