TD Economics brought to you by Dina Ignjatovic, Economist
Data Release: Housing starts kick off the year on strong footing
- Canadian housing starts kicked off the year on a strong note, with homebuilders breaking ground on 207k units (annualized) in January. This extends December's sharp gain, and pushes the 6-month moving average up just shy of the 200k unit mark.
- The strength in January stemmed from the multi-family sector, which was up 4.2% following a 14% gain in December. Meanwhile, single family construction was down 4.6% on the month, reversing some of December's gains.
- Regionally, Ontario remained the key driver of growth, with starts up by a whopping 25% in January. Homebuilding in the Atlantic Provinces was also up during the month while the remaining regions recorded declines. B.C. experienced the largest pullback, as home starts slid 33% from the month prior.
Key Implications
- Overall, housing starts have been hovering around the 200k mark annualized (on a trend basis) for the last six quarters, or just slightly above the current rate of household formation. However, homebuilding construction should begin to slow over the course of the year, consistent with a cooling in overall housing market activity.
- Still, the recent strength in multi-unit projects could have further room to run given the surge in building permit approvals seen over the second half of last year. This could be partly offset by single-family construction, which is already at relatively lofty levels.
- The regional story will continue to reverberate across the housing markets, with central Canada leading the way, while B.C. and the oil-rich provinces lagging behind.
Comparison of Collateral versus Standard Charge Mortgages
March 1 2016 Posted by Jennifer Gaudet
Comparison of Collateral versus Standard Charge Mortgages
More lenders are moving to collateral charge mortgages so it’s becoming increasingly important to understand the differences between a collateral and standard charge mortgage. Which is better for you? They both have advantages and disadvantages so it all depends on your preferences and future needs. It’s important to understand those differences so you can make sure you get the mortgage that best fits your long-term goals.
Collateral Charge
- Ideal if you want to be able to access your equity for debt consolidation, renovations or to invest in property or investments easily and cost effectively i.e. no legal fees (rate may be higher than original, and you’ll need to qualify).
- Your mortgage is registered for the same or more than the property value, which is why you can easily access your equity.
- May affect your negotiating ability with your lender at renewal. It is harder to switch lenders without getting a new mortgage and paying legal fees, which range from $500 to $1,000.
- Could be difficult to get a second mortgage unless your home significantly appreciates in value.
- Lender may be able to seize equity to cover other debts with that same lender.
Standard Charge
- Ideal if you won’t need to refinance your mortgage during your mortgage term.
- Ideal if you want to have the ability to easily and cost effectively move from lender to lender at renewal.
- Offered by majority of lenders. Some offer both – standard charge mortgages and HELOCs that are often a collateral charge. You choose the option that best meets your needs.
- If you need to borrow more, you have the option of a second mortgage or line of credit.
- You are not as tied to your lender for your full amortization period; it’s easier to switch lenders at renewal with little or no cost; keeps your options open.
Whether you’re buying your first or next home, getting ready for renewal, taking out some equity for debt consolidation, renovations, or investing, let us help you get the right mortgage type (collateral or standard charge) with the rate and features matched to your needs now and in the future.
Jennifer Gaudet
Associate Mortgage Broker - Military Mortgage Specialist
- 902-824-2906
- jennifer@jennifergaudet.ca
- Licence # 2024-3000814
Blog Categories
- Blog Main
- EVENTS (1)
- First Time Home Buyers (14)
- Industry News (5)
- Industry Trends (4)
- Mortgage Tips & Advice (31)