Mortgage rates probably won’t be dramatically changed by the Bank of Canada’s benchmark overnight rate, economists say. (Sean Kilpatrick/Canadian Press)
Six of 10 markets surveyed showed improvement in affordability, the bank said, with the biggest improvements seen in Calgary, Montreal and Ottawa-Gatineau.
Pockets of affordability emerge
The bank’s gauge of affordability is the percentage of income required for a monthly mortgage payment on a median-priced home, assuming a 25-year amortization and a five-year term.
In Calgary, which has been hit hard by the dramatic drop in oil prices, the the mortgage payment stood at 28.2 per cent of income for the first quarter of this year. That was off by 0.7 percentage points from the last quarter of 2015, and down by 2.2 percentage points from the first three months of last year, the bank said.
‘Montreal homes have become the most affordable in a decade’– National Bank
In Montreal, the first quarter drop was 0.5 percentage points from the end of last year, the same decline seen in the Ottawa-Gatineau area.
“Montreal homes have become the most affordable in a decade,” National Bank economists Matthieu Arsenau and Kyle Dahms said in their report.
They also said Calgary’s percentage of income needed for a monthly payment is now at a record low.
Nationally, the portion of income increased by 0.1 percentage points to 31 per cent in the first three months of the year, the bank said. That followed a increase of 0.8 percentage points in the last three months of 2015.
Meanwhile, Vancouver and Toronto continue to see soaring prices, and eroding afforability, the bank said.
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