About Me

My photo
GTA, Ontario, Canada
A New Sales Record Has Been Achieved By The Jackie Goodlet Team Who Work Out Of The Whitby Office And Specializes In High End Resale And New Home Sales. According To Broker Dave Pearce The Jackie Goodlet Team Wrote More Transactions Than Anyone Else In The 30 Year History Of Our Firm. Their 255 Transactions Had A Total Volume Of More Than $185,000,000 (185 Million). With Over 25 Years Experience In The Business The Jackie Goodlet Team Has Acquired A Wealth Of Knowledge In All Areas Of Real Estate Including Resale, New Builds, Cottages, Lease, Condos, Vacant Land, Investment And Commercial Properties. With Exceptional Negotiating Skills We Are Confident We Can Save You Time And Money On All Your Real Estate Endeavours. We Look Forward To Hearing From You And Your Referrals Are Always Welcome And Rewarded!

Sunday, June 14, 2020

Bank of Canada says HELOC limits were pushed to brink even before COVID-19

Even before the COVID-19 pandemic took hold in Canada, around 17% of homeowners had already pushed their home equity lines of credit to between 90% and 100% of their available limits, according to figures from the Bank of Canada.

The central bank’s calculations also showed that by the end of Q4 2019, around 5% drew more than 80% but less than 90% from their HELOCs. Meanwhile, 12% of Canadians drew more than half but less than 80% of their available credit.

“These filings cover pre-pandemic numbers, and more credit has likely been utilized since,” Better Dwelling said in its analysis of the BoC figures. “Most households had HELOC credit available to help them in this downturn.”

In April, finance columnist Dale Jackson said that the coronavirus outbreak has pushed a significant number of Canadians to borrow from HELOCs, especially considering the economic impact of the crisis.

“Central banks have been slashing their trend-setting rates and injecting liquidity into the markets,” Jackson said in a Bloomberg analysis. “HELOC rates, like most variable-rate loans, are tied to the prime interest rate.”

However, this trend might lead to Canadian banks restricting access to this product type later this year, according to Ben Rabidoux, president of North Cove Advisors.

“HELOCs, in some ways, have the potential to magnify risk on banks’ balance sheets, because in times of stress, people want to draw on them,” Rabidoux said last month. “If [federal aid] runs out before we see a return to prior employment levels, we would see people draw down on HELOCs. Maybe that’s what forces the banks to rethink that exposure.”

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

No comments:

Post a Comment