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GTA Split Signal: Buyers, Renewers, and the Math · Your Mortgage Minute | Onlendhub

• 0:15
  SPEAKER_00: Welcome to another episode of Your Mortgage Minute.
• 0:18
  SPEAKER_00: I am Sarah, your co-host, with our mortgage expert Moole here in the studio.
• 0:22
  SPEAKER_00: Okay, Mooley.
• 0:24
  SPEAKER_00: October's GTA resale numbers feel like the market's arguing with itself.
• 0:28
  SPEAKER_00: TRREB's unadjusted release has sales down almost 8% year over year, and the average price down 2.7%.
• 0:37
  SPEAKER_00: The seasonally adjusted read has sales up 1.2% month over month, and the HPI up 0.1%.
• 0:46
  SPEAKER_00: Though it's still down 4.3% from a year ago, how's a mortgage-bound buyer or a renewer supposed to read that without whiplash?
• 0:55
  SPEAKER_01: Two different questions, that's all.
• 0:57
  SPEAKER_01: The release isn't arguing with itself.
• 0:59
  SPEAKER_01: The unadjusted year-over-year number compares this October to last October.
• 1:03
  SPEAKER_01: 5,603 sales versus 6,083, with new listings and active listings down too.
• 1:10
  SPEAKER_01: The seasonally adjusted month over month number asks something else.
• 1:14
  SPEAKER_01: After normal seasonal patterns, did activity pick up from September to October?
• 1:19
  SPEAKER_01: It did.
• 1:20
  SPEAKER_01: Both things are true at once.
• 1:21
  SPEAKER_00: So the year over year drop is real.
• 1:24
  SPEAKER_00: It just doesn't say what happened between September and October.
• 1:28
  SPEAKER_01: Exactly.
• 1:29
  SPEAKER_01: And don't lean too hard on the average price.
• 1:31
  SPEAKER_01: It's mixed sensitive.
• 1:33
  SPEAKER_01: If more detached homes trade and fewer condos trade, the average can move even when the typical home didn't budge.
• 1:39
  SPEAKER_01: The HPI adjusts for that composition, but it's still an index, not a promise about your property.
• 1:45
  SPEAKER_01: Treat it as a split signal, not a bottom call, not a rate forecast.
• 1:49
  SPEAKER_00: But isn't that having it both ways?
• 1:52
  SPEAKER_00: Down year over year, up, month over month?
• 1:55
  SPEAKER_00: People want one answer.
• 1:57
  SPEAKER_01: It'd be both ways if the two numbers measured the same thing.
• 2:01
  SPEAKER_01: They don't.
• 2:01
  SPEAKER_01: Different time frames, different adjustments.
• 2:04
  SPEAKER_01: Using one to cancel the other is where people go wrong.
• 2:07
  SPEAKER_01: The market stat is context.
• 2:09
  SPEAKER_01: Your financing is the decision.
• 2:11
  SPEAKER_00: Okay, so what does a buyer who needs a mortgage actually take from it?
• 2:16
  SPEAKER_01: Context, not a trigger.
• 2:17
  SPEAKER_01: TRREB said inflation and borrowing cost uncertainty kept buyers on the sidelines, and its CIO argued lower selling prices have partly offset higher mortgage payments.
• 2:28
  SPEAKER_01: That's the point.
• 2:29
  SPEAKER_01: Affordability is price plus financing.
• 2:32
  SPEAKER_01: On the financing side, for an uninsured mortgage at a federally regulated lender, OSPI's minimum qualifying rate is the greater of the contract rate plus two percentage points, or 5.25%.
• 2:45
  SPEAKER_01: At 4.5%, that works out to 6.5%.
• 2:49
  SPEAKER_01: That's the official formula for that calculation.
• 2:51
  SPEAKER_01: Lender underwriting and the transaction itself can differ.
• 2:55
  SPEAKER_01: And a pre-approval isn't a blank check.
• 2:57
  SPEAKER_00: And renewers?
• 2:58
  SPEAKER_00: For them, this isn't theory.
• 3:00
  SPEAKER_00: It's the next envelope in the mail.
• 3:03
  SPEAKER_01: Right.
• 3:03
  SPEAKER_01: So take the example: a$480,000 balance, 1.9% today, renewing at 4.5% with 25 years left on the amortization.
• 3:14
  SPEAKER_01: The payment goes from$2,09 to$2,657.
• 3:19
  SPEAKER_01: That's$647 more every month.
• 3:23
  SPEAKER_01: Plain subtraction,$2,657 minus$2,09.
• 3:28
  SPEAKER_01: Same balance, same amortization.
• 3:31
  SPEAKER_01: The rate change is doing all the work.
• 3:33
  SPEAKER_00: And stretching to 30 years to soften the payment?
• 3:36
  SPEAKER_00: I can see why that's tempting.
• 3:38
  SPEAKER_01: Then it drops to$2,420 a month,$236 less than the renewal payment.
• 3:44
  SPEAKER_01: But don't confuse a lower payment with a lower cost.
• 3:47
  SPEAKER_01: You're stretching the amortization, so the principal comes down slower and the total interest changes, and the lender has to approve it.
• 3:55
  SPEAKER_01: It can help cash flow.
• 3:56
  SPEAKER_01: It's not free money.
• 3:58
  SPEAKER_00: Right.
• 3:58
  SPEAKER_00: Smaller payment, same debt.
• 4:01
  SPEAKER_00: What about the appraisal though?
• 4:02
  SPEAKER_00: If the values come down, does that kill a renewal or a not automatically?
• 4:08
  SPEAKER_01: It tightens options.
• 4:09
  SPEAKER_01: It doesn't end them.
• 4:10
  SPEAKER_01: Original value was$850,000.
• 4:13
  SPEAKER_01: The current appraisal is$790,000.
• 4:17
  SPEAKER_01: At an 80% loan to value ceiling, the ceiling was$680,000.
• 4:22
  SPEAKER_01: Now it's$632,000.
• 4:24
  SPEAKER_01: That's$48,000 less room, but the appraisal is one input.
• 4:29
  SPEAKER_01: Underwriting, income, credit, and the type of transaction still matter.
• 4:34
  SPEAKER_00: Which is where the straight switch question comes up.
• 4:37
  SPEAKER_00: People hear renewal and assume the same test applies across the board.
• 4:41
  SPEAKER_01: It doesn't.
• 4:42
  SPEAKER_01: An eligible uninsured straight switch isn't automatically subject to that prescribed minimum qualifying rate.
• 4:49
  SPEAKER_01: Official rules in lender underwriting can differ by transaction.
• 4:53
  SPEAKER_01: A straight renewal with your existing lender, a switch, a refinance, new money, they can all be treated differently.
• 5:00
  SPEAKER_01: So ask the lender to confirm what actually applies to your file.
• 5:04
  SPEAKER_00: So the practical read: unadjusted year over year says softer.
• 5:09
  SPEAKER_00: Seasonally adjusted month over month says a touch firmer.
• 5:13
  SPEAKER_00: The average price is mixed sensitive, and renewers should test their own payment and their own file, not the headline.
• 5:22
  SPEAKER_00: Thanks for listening to this episode of Your Mortgage Minute by OnlandHub.ca.
• 5:27
  SPEAKER_00: See you in another episode next week.
• 5:29
  SPEAKER_00: Until then, have a great week.
• 5:31
  SPEAKER_00: That's the read I'd take into a renewal conversation.
• 5:34
  SPEAKER_00: Educational content only, not financial, legal, or tax advice.