Prairie Mountain Properties Ltd.

Bank of Canada reduces policy rate by 50 basis points to 3¾%.

This means that the prime rate that is used by most lenders for variable or adjusted rate mortgages should drop to 5.95%

The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out. The upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.

With inflation now back around the 2% target, Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range. If the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further. However, the timing and pace of further reductions in the policy rate will be guided by incoming information and our assessment of its implications for the inflation outlook. We will take decisions one meeting at a time. The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.

The next Bank of Canada announcement is Dec 11, 2024

HOT, HOT, HOT....OFF THE PRESS! MUST READ FOR REAL ESTATE INVESTORS!!
CMHC Now Insuring up to 4 Units and up to $2M Starting January 15, 2025. Up to 90% LTV and 30 Year Amortization.

The Federal Government of Canada has announced a series of groundbreaking measures aimed at increasing housing supply and affordability across the nation. Central to these initiatives is the focus on unlocking under utilized and vacant land, particularly government-owned properties, for new residential developments.

Additionally, new rules are being implemented to encourage the development of secondary suites on existing residential properties, making use of unused basements, garages, and other spaces. These actions not only aim to create affordable housing options but also reduce urban sprawl by increasing density in established neighborhoods. This strategic approach opens up exciting opportunities for homeowners to increase property values and for real estate professionals to tap into a growing market of clients looking to maximize their investments through these new policies.

The Department of Finance Canada also announced significant changes to mortgage insurance rules. This comes after Septembers announcement of mortgage reforms for first time homebuyers. These changes, slated to take effect on January 15, 2025, are poised to revolutionize how homeowners can leverage their properties, potentially easing the housing crunch and creating new opportunities for real estate agents, mortgage brokers, and property owners alike.

The new mortgage insurance rules will enable homeowners to add more units to their existing properties.

This initiative aligns with recent municipal zoning reforms in Canada's major cities, made possible through Housing Accelerator Fund agreements. These reforms have paved the way for increased density and more flexible use of residential properties.

What's Changing: The New Rules Explained
The core of this policy change revolves around making it easier for homeowners to finance the addition of secondary suites to their properties. Here's what you need to know:

Eligibility:
The new rules apply to all borrowers seeking mortgage insurance to add more units (secondary suites) to their properties. To qualify, borrowers must:
-Already own their properties
-Occupy one of the current units (or have a close relative doing so)
-Intend to construct additional units
-Not use the additional unit(s) for short-term rentals

Refinancing:
- INSURED refinancing will be permitted specifically for the purpose of building additional units.

Legal Requirements:
- New units must be fully self-contained (e.g., basement suites with separate entrances, laneway homes) and comply with municipal zoning regulations.

Property Limits:
- Maximum of four dwelling units per property (including the existing unit)
- The "as improved" value of the property must be less than $2 million.

Financing Terms:
-Loan-to-Value (LTV) ratio: Up to 90% of the property value, including the added value of secondary suite(s)
-Maximum amortization period: 30 years
-Additional financing must not exceed project costs

Effective Date: These new rules will apply to mortgage insurance applications submitted by lenders to insurers on or after January 15, 2025.

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Federal Government Mortgage Announcement today!

The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, today announced a suite of reforms to mortgage rules to make mortgages more affordable for Canadians and put homeownership within reach:

- Increasing the $1 million price cap for insured mortgages to $1.5 million, effective December 15, 2024, to reflect current housing market realities and help more Canadians qualify for a mortgage with a downpayment below 20 per cent. Increasing the insured mortgage cap—which has not been adjusted since 2012—to $1.5 million will help more Canadians buy a home.
- Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers and to all buyers of new builds, effective December 15, 2024, to reduce the cost of monthly mortgage payments and help more Canadians buy a home. By helping Canadians buy new builds, including condos, the government is announcing yet another measure to incentivize more new housing construction and tackle the housing shortage. This builds on the Budget 2024 commitment, which took effect on August 1, 2024, permitting 30-year mortgage amortizations for first-time homebuyers purchasing new builds, including condos.