Montreal Housing Bubble / Bulle Immobiliere Montreal

Montreal Housing Bubble / Bulle Immobiliere Montreal

Hi,

Did you know that Canadian bond have been raising lately?

Graph : http://www.bloomberg.com/quote/GCAN10YR:IND/chart

Canadian Bond are going higher . This thing will have a direct relationship to the mortgage rate at some point.

Just between May and Now, bonds increased by 1%.

In addition, CMHC decided to put a cap limit for which it could have an effect of +0.2 to 0.6%.

What does it means? In a few month mortgage rate will be higher and therefore the cost of borrowing as well.

I suggest you to do a simulation with the mortgage calculator of Patrick Gunville to see the true effect of rising interest rate (try to simulate the worse case) : http://www.patrickgunville.com/wp-content/uploads/2013/08/Mortgage-Calculator.xls

Is Montreal immune to an housing bubble??? The answer is obvious.


Links

To explain in details bond vs mortgage rate : http://www.truenorthmortgage.ca/how-government-bond-yields-relate-to.html

CMHC putting a new cap limit : http://www.bcdirectmortgages.com/blog/archives/348