A cooling GTA housing market has created an unexpected hurdle for homeowners: declining property appraisals. According to the Bank of Canada’s recent Financial Stability Report, many borrowers are finding their home equity insufficient to meet the 80% loan-to-value threshold required for refinancing.
Victor Tran of Rates.ca notes that while many homeowners have the credit scores and income to qualify, lower appraisal values are effectively ‘stranding’ them with their current lenders. This lack of equity limits bargaining power, leaving borrowers unable to shop for better rates or access home equity lines of credit (HELOC). With 80% of clients currently opting for fixed-rate mortgages to manage economic uncertainty, the inability to refinance is forcing many into renewal terms they might otherwise avoid. For more on how these valuation gaps are impacting your renewal options, visit the full report at MPA Mag.
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