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Read the January 28th, 2026 Monetary Report

January 28, 2026

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

The outlook for the global and Canadian economies is little changed relative to the projection in the October Monetary Policy Report (MPR). However, the outlook is vulnerable to unpredictable US trade policies and geopolitical risks.

Economic growth in the United States continues to outpace expectations and is projected to remain solid, driven by AI-related investment and consumer spending. Tariffs are pushing up US inflation, although their effect is expected to fade gradually later this year. In the euro area, growth has been supported by activity in service sectors and will get additional support from fiscal policy. China’s GDP growth is expected to slow gradually, as weakening domestic demand offsets strength in exports. Overall, the Bank expects global growth to average about 3% over the projection horizon.

Global financial conditions have remained accommodative overall. Recent weakness in the US dollar has pushed the Canadian dollar above 72 cents, roughly where it had been since the October MPR. Oil prices have been fluctuating in response to geopolitical events and, going forward, are assumed to be slightly below the levels in the October report.

US trade restrictions and uncertainty continue to disrupt growth in Canada. After a strong third quarter, GDP growth in the fourth quarter likely stalled. Exports continue to be buffeted by US tariffs, while domestic demand appears to be picking up. Employment has risen in recent months. Still, the unemployment rate remains elevated at 6.8% and relatively few businesses say they plan to hire more workers.

Economic growth is projected to be modest in the near term as population growth slows and Canada adjusts to US protectionism. In the projection, consumer spending holds up and business investment strengthens gradually, with fiscal policy providing some support. The Bank projects growth of 1.1% in 2026 and 1.5% in 2027, broadly in line with the October projection. A key source of uncertainty is the upcoming review of the Canada-US-Mexico Agreement.

CPI inflation picked up in December to 2.4%, boosted by base-year effects linked to last winter’s GST/HST holiday. Excluding the effect of changes in taxes, inflation has been slowing since September. The Bank’s preferred measures of core inflation have eased from 3% in October to around 2½% in December. Inflation was 2.1% in 2025 and the Bank expects inflation to stay close to the 2% target over the projection period, with trade-related cost pressures offset by excess supply.

Monetary policy is focused on keeping inflation close to the 2% target while helping the economy through this period of structural adjustment. Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today. However, uncertainty is heightened and we are monitoring risks closely. If the outlook changes, we are prepared to respond. The Bank is committed to ensuring that Canadians continue to have confidence in price stability through this period of global upheaval.

Information note

The next scheduled date for announcing the overnight rate target is March 18, 2026. The Bank’s next MPR will be released on April 29, 2026.

Wait! Are You Really Ready to Buy That Home?

Wed, 21 Jan 2026 08:30:32 GMT

So, you’re thinking about buying a home.

You’ve got Pinterest boards full of kitchen inspo, you’re casually scrolling listings at midnight, and your friends are talking about interest rates like they’re the weather.

But before you dive headfirst into house hunting— wait .

Let’s talk about what “ready” really means when it comes to one of the biggest purchases of your life. Because being ready to own a home is about way more than just having a down payment (although that’s part of it).

Here are the real signs you're ready—or not quite yet—to take the plunge into homeownership:

1. You're Financially Stable (and Not Just on Payday)

Homeownership isn’t a one-time cost. Sure, there’s the down payment, but don’t forget about:

Closing costs
Property taxes
Maintenance & repairs
Insurance
Monthly mortgage payments

If your budget is stretched thin every month or you don’t have an emergency fund, pressing pause might be smart. Owning a home can be more expensive than renting in the short term—and those unexpected costs will show up.

2. You’ve Got a Steady Income and Job Security

Lenders like to see consistency. That doesn’t mean you need to be at the same job forever—but a reliable, documented income (ideally for at least 2 years) goes a long way in qualifying for a mortgage.

Thinking of switching jobs or going self-employed? That might affect your eligibility, so timing is everything.

3. You Know Your Credit Score—and You’ve Worked On It

Your credit score tells lenders how risky (or trustworthy) you are. A higher score opens more doors (literally), while a lower score may mean higher rates—or a declined application.

Pro tip: Pull your credit report before applying. Fix errors, pay down balances, and avoid taking on new debt if you’re planning to buy soon.

4. You’re Ready to Stay Put (At Least for a Bit)

Buying a home isn’t just a financial decision—it’s a lifestyle one. If you’re still figuring out your long-term plans, buying might not make sense just yet.

Generally, staying in your home for at least 3–5 years helps balance the upfront costs and gives your investment time to grow. If you’re more of a “see where life takes me” person right now, that’s totally fine—renting can offer the flexibility you need.

5. You’re Not Just Buying Because Everyone Else Is

This one’s big. You’re not behind. You’re not failing. And buying a home just because it seems like the “adult” thing to do is a fast way to end up with buyer’s remorse.

Are you buying because it fits your goals? Because you’re ready to settle, invest in your future, and take care of a space that’s all yours?

If the answer is yes—you’re in the right headspace.

So… Are You Ready?

If you’re nodding along to most of these, amazing! You might be more ready than you think.

If you’re realizing there are a few things to get in order, that’s okay too. It’s way better to prepare well than to rush into something you're not ready for.

Wherever you’re at, I’d love to help you take the next step—whether that’s getting pre-approved, making a plan, or just asking questions without pressure.

Let’s make sure your homebuying journey starts strong.
Connect anytime—I’m here when you’re ready.

How to Get a Mortgage for a Second Property

Wed, 14 Jan 2026 08:30:16 GMT

Thinking About Buying a Second Property? Here’s What to Know

Buying a second property is an exciting milestone—but it’s also a big financial decision that deserves thoughtful planning.

Whether you're dreaming of a vacation retreat, building a rental portfolio, or looking to support a family member with a place to live, there are plenty of reasons to consider a second home. But before you jump in, it's important to understand the strategy and steps involved.

Start with “Why”

The best place to begin? Clarify your motivation.

Ask yourself:

Why do I want to buy a second property?
What role will it play in my life or finances?
How does this fit into my long-term goals?

Whether your focus is lifestyle, income, or legacy planning, knowing your “why” will help you make smarter decisions from the start.

Talk to a Mortgage Expert Early

Once you’ve nailed down your goals, the next step is to sit down with an independent mortgage professional. Why?

Because buying a second property isn't quite the same as buying your first. Even if you’ve qualified before, financing a second home has unique considerations—especially when it comes to down payments, debt ratios, and how lenders assess risk.

How Much Do You Need for a Down Payment?

Here’s where the purpose of the property really matters:

Owner-occupied or family use: You may qualify with as little as 5–10% down, depending on the property and lender.
Income property: Expect to put down 20–35%, especially for short-term rentals or if it won’t be occupied by you or a family member.

Your down payment amount can be one of the biggest hurdles—but with strategic planning, it’s often manageable.

Ways to Fund the Down Payment

If you don’t have the full amount in cash, you might be able to tap into your current home’s equity to help fund the purchase. Here are a few ways to do that:

✅ Refinance your existing mortgage to access additional funds
✅ Secure a second mortgage behind your current one
✅ Open a HELOC (Home Equity Line of Credit)
✅ Use a reverse mortgage (in certain age-qualified scenarios)
✅ Take out a new mortgage if your current home is mortgage-free

These options depend on your income, credit, home value, and overall financial picture—another reason why having a pro in your corner matters.

Second Property Strategy: It’s More Than Just Numbers

This purchase should be part of a bigger financial plan—one that balances risk and reward. It’s about:

Assessing your full financial health
Maximizing your existing assets
Minimizing your cost of borrowing
Aligning your purchase with your long-term goals

Ready to Take the Next Step?

There’s no one-size-fits-all answer when it comes to buying a second property. That’s why it helps to talk things through with someone who understands both the big picture and the small details.

If you’re ready to explore your options and build a plan to make that second property dream a reality, let’s connect. I’d love to help you take the next step with confidence.

What Is a Cashback Mortgage and How Does It Work?

Wed, 07 Jan 2026 08:30:16 GMT

Cashback Mortgages: Are They Worth It? Here’s What You Need to Know

If you’ve been exploring mortgage options and come across the term cashback mortgage , you might be wondering what exactly it means—and whether it’s a smart move.

Let’s break it down in simple terms.

What Is a Cashback Mortgage?

A cashback mortgage is just like a regular mortgage—but with one extra feature: you receive a lump sum of cash when the mortgage closes .

This cash is typically:

A fixed amount , or
A percentage of the total mortgage , usually between 1% and 7% , depending on your mortgage term and lender.

The money is tax-free and paid directly to you on closing day.

What Can You Use the Cashback For?

There are no restrictions on how you use the funds. Here are some common uses:

Covering closing costs
Buying new furniture
Renovations or home upgrades
Paying off high-interest debt
Boosting your cashflow during a tight transition

Whether it’s to help you settle in or catch up financially, cashback can offer a helpful buffer— but it comes at a cost .

The True Cost of a Cashback Mortgage

Here’s the part many people overlook: cashback mortgages come with higher interest rates than standard mortgages.

Why? Because the lender is essentially advancing you a small loan upfront—and they’re going to make that money back (and then some) through your mortgage payments.

So while the upfront cash feels like a bonus, you’ll pay more in interest over time to have that convenience.

Breaking Down the Numbers

It’s hard to give a blanket answer about how much more you’ll pay since it depends on:

Your interest rate
The cashback amount
The mortgage term
Your payment schedule

This is why it’s important to run the numbers with a mortgage professional who can help you compare this option with others based on your personal financial situation.

Are You Eligible for a Cashback Mortgage?

Not everyone qualifies.

Cashback mortgages generally come with stricter requirements . Lenders often want to see:

Excellent credit history
Strong, stable income
Low debt-to-income ratio

If your mortgage file includes anything “outside the box”—like being self-employed or recently changing jobs—qualifying for a cashback mortgage might be tough.

What If You Need to Break the Mortgage?

This is one of the biggest risks with cashback mortgages.

If your circumstances change and you need to break your mortgage early, you could be on the hook for:

Paying back some or all of the cashback you received, and
A prepayment penalty (typically the interest rate differential or 3 months’ interest—whichever is higher)

That can be a very expensive combination. So if there’s even a chance you might need to sell, refinance, or move before your term is up, a cashback mortgage might not be the best fit.

Should You Consider a Cashback Mortgage?

Maybe—but only with eyes wide open.

Cashback mortgages can be helpful in the right scenario, but they’re not free money. They’re a lending tool that benefits the lender , and the key is knowing exactly what you’re agreeing to.

Final Thoughts: Talk to an Expert First

Choosing the right mortgage isn’t just about the lowest rate or the biggest perk—it’s about making a choice that fits your whole financial picture.

If you’re considering a cashback mortgage, or just want to explore all your options, let’s talk. As an independent mortgage professional , I can help you weigh the pros and cons of various products, so you can make a confident, informed decision.

Have questions? I’d be happy to help—reach out anytime.

Getting a Mortgage Shouldn’t Be Stressful—We Can Help

Wed, 31 Dec 2025 08:30:10 GMT

Buying a Home? Follow These 6 Key Steps for a Smooth Experience

Buying a home is likely one of the biggest financial decisions you’ll ever make. It’s exciting—but it can also be overwhelming, especially when it comes to understanding how mortgage financing works.

To help make the process smoother (and far less stressful), here are six essential steps every homebuyer should follow:

1. Start With a Mortgage Professional—Not MLS

It’s tempting to start your home search by scrolling through listings and booking showings—but the real first step should be speaking with an independent mortgage professional .

Unlike a bank that offers only one set of products, an independent mortgage expert has access to multiple lenders and options . That means better advice, better rates, and a better chance of finding a mortgage that truly fits your needs.

2. Build a Personalized Mortgage Plan

Unless you’re buying your home with cash, you’ll need a solid financing strategy. That means:

Reviewing your credit score
Running affordability calculations
Exploring different mortgage types, terms, and features
Understanding down payments and closing costs

The sooner you start planning, the more confident you’ll feel. Don’t wait until you’ve found the “perfect” property— get ahead of the process now .

3. Figure Out What You Can Actually Afford

What a lender says you can borrow doesn’t always match what you can comfortably pay each month.

Take a close look at your budget, lifestyle, and spending habits. Think about how your mortgage payments, property taxes, utilities, and other costs will fit into your everyday cash flow.

Avoid the stress of being house-poor by knowing your real-life affordability , not just your paper pre-approval.

4. Get Pre-Approved the Right Way

A true mortgage pre-approval isn’t just entering numbers into an online calculator. It means:

Completing a mortgage application
Submitting all your required documentation
Having a mortgage professional fully assess your file

When you’re officially pre-approved, you’ll shop for homes with confidence , knowing what you qualify for and that you’re financially ready.

5. Submit Your Documents Promptly and Stay Flexible

Once you find a property and your offer is accepted, time is of the essence. That’s when all the upfront work you’ve done really pays off.

Be ready to:

Provide additional documentation if requested
Respond to your mortgage professional quickly
Stay flexible and proactive throughout the approval process

Your lender needs to verify everything before finalizing the loan, so staying organized is key.

6. Don’t Make Big Financial Changes Before Closing

Once you’ve secured financing and waived your conditions, freeze your finances until after you get the keys.

Seriously—don’t:

Change jobs
Apply for new credit
Take out a loan
Make a large withdrawal

Even small changes can throw off your approval. Keep everything status quo until you officially take possession.

Recap: 6 Steps to a Smooth Home Purchase

Connect with an independent mortgage professional
Create a mortgage plan early
Know what you can afford (not just what you qualify for)
Get fully pre-approved
Stay on top of documentation
Avoid major financial changes before possession

Ready to Buy with Confidence?

If you’re thinking about buying a home—or just want to know what’s possible—let’s talk. I’ll help you map out a personalized plan that makes your homebuying journey feel simple, strategic, and stress-free.

Reach out anytime. I’d love to help you get started.

Get Unbiased Advice: Work with an Independent Mortgage Pro

Wed, 24 Dec 2025 08:30:15 GMT

Why Work With an Independent Mortgage Professional?

If you’re in the market for a mortgage, here’s the most important thing to know:

Working with an independent mortgage professional can save you money and provide better options than dealing directly with a single bank.

If that’s all you read—great! But if you’d like to understand why that statement is true, keep reading.

The Best Mortgage Isn’t Just About the Lowest Rate

It’s easy to fall for slick marketing that promotes ultra-low mortgage rates. But the lowest rate doesn’t always mean the lowest cost .

The best mortgage is the one that costs you the least amount of money over time —not just the one with the flashiest headline rate. Things like:

Prepayment penalties
Portability
Flexibility to refinance
Amortization structure
Fixed vs. variable terms

…can all affect the true cost of your mortgage.

An independent mortgage professional looks beyond the rate. They’ll help you find a product that fits your unique financial situation , long-term goals, and lifestyle—so you’re not hit with expensive surprises down the road.

Save Time (and Your Sanity)

Applying for a mortgage can be complicated. Every lender has different rules, documents, and policies—and trying to navigate them all on your own can be time-consuming and frustrating.

When you work with an independent mortgage professional:

You fill out one application
They shop that application across multiple lenders
You get expert advice tailored to your needs

This means less paperwork , less stress , and more confidence in your options.

Get Unbiased Advice That Puts You First

Bank specialists work for the bank. Their job is to sell you that bank’s mortgage products—whether or not it’s the best deal for you.

Independent mortgage professionals work for you. They’re provincially licensed, and their job is to help you:

Compare multiple lenders
Understand the fine print
Make informed, long-term financial decisions

And the best part? Their services are typically free to you . Mortgage professionals are paid a standardized fee by the lender when a mortgage is placed—so you get expert guidance without any out-of-pocket cost.

Access More Mortgage Options

When you go to your bank, you’re limited to that bank’s mortgage products.

When you go to an independent mortgage professional, you get access to:

Major banks
Credit unions
Monoline lenders (who only offer mortgages)
Alternative and private lenders (if needed)

That’s far more choice , and a much better chance of finding a mortgage that truly fits your needs and goals.

The Bottom Line

If you want to:

Save money over the life of your mortgage
Save time by avoiding unnecessary back-and-forth
Access more lenders and products
Get honest, client-first advice

…then working with an independent mortgage professional is one of the smartest decisions you can make.

Let’s Make a Plan That Works for You

If you're ready to talk about mortgage financing—or just want to explore your options—I'm here to help. Let's connect and put together a strategy that makes sense for your goals and your future.

Reach out anytime. I’d be happy to help.

Is Alternative Lending the Right Choice for Your Mortgage Needs?

Wed, 17 Dec 2025 08:30:23 GMT

Alternative Lending in Canada: What It Is and When It Makes Sense

Not everyone fits into the traditional lending box—and that’s where alternative mortgage lenders come in.

Alternative lending refers to any mortgage solution that falls outside of the typical big bank offerings. These lenders are flexible, creative, and focused on helping Canadians who may not qualify for traditional financing still access the real estate market.

Let’s explore when alternative lending might be the right fit for you.

1. You Have Damaged Credit

Bad credit doesn’t have to mean your homeownership dreams are over.

Many alternative lenders take a big-picture approach . While credit scores matter, they’ll also look at:

Stable employment
Consistent income
Size of your down payment or existing equity

If your credit has taken a hit but you can demonstrate strong income and savings—or have a solid explanation for past credit issues— an alternative lender may approve your mortgage when a bank won’t.

Pro tip: Use an alternative mortgage as a short-term solution while you rebuild your credit, then refinance into a traditional mortgage with better terms down the line.

2. You're Self-Employed

Being your own boss has its perks—but mortgage approval isn’t usually one of them.

Traditional lenders require verifiable, consistent income—often two years’ worth. But self-employed Canadians typically write off significant expenses, reducing their declared income.

Alternative lenders are more flexible and understanding of self-employed income structures. If your business is profitable and your personal finances are healthy, you may qualify even with lower stated income.

Even if interest rates are slightly higher, this option is often worth it—especially when balanced against tax planning and business deductions .

3. You Earn Non-Traditional Income

Today’s income sources aren’t always conventional. If you earn through:

Airbnb rentals
Tips and gratuities
Rideshare or delivery apps (like Uber or Uber Eats)
Commissions or contracts

You might face challenges with traditional lenders.

Alternative lenders are often more willing to work with these non-standard income streams , especially if the rest of your mortgage application is strong. Some will consider a shorter income history or evaluate your average earnings in a more flexible way.

4. You Need Expanded Debt-Service Ratios

Canada’s mortgage stress test has made it harder for many borrowers to qualify with big banks.

Alternative lenders can offer more generous debt-service ratio limits —meaning you might be able to qualify for a larger mortgage or a more suitable home, especially in competitive markets.

While traditional GDS/TDS limits typically sit at 35/42 or 39/44 (depending on your credit), some alternative lenders will go higher, especially if:

You have a larger down payment
Your loan-to-value ratio is lower
Your overall financial profile is strong

It’s not a free-for-all—but it’s more flexible than bank lending.

So, Is Alternative Lending Right for You?

Alternative lending is designed to offer solutions when life doesn’t fit the traditional mold . Whether you're rebuilding credit, running your own business, or earning income in new ways, this path could help you get into a home sooner—or keep your current one.

And here’s the key: You can only access alternative lenders through the mortgage broker channel .

Let’s Explore Your Options

Not sure where you fit? That’s okay. Every mortgage story is unique—and I’m here to help you write yours.

If you’re curious about alternative mortgage products, want a second opinion, or need help getting approved, let’s talk . I’d be happy to help you explore the best solution for your situation.

Reach out anytime. It would be a pleasure to work with you.

Bank of Canada Rate Announcement Dec 10th, 2025

Wed, 10 Dec 2025 15:10:25 GMT

Bank of Canada maintains policy rate at 2.1/4%.

FOR IMMEDIATE RELEASE

December 10, 2025

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

Major economies around the world continue to show resilience to US trade protectionism, but uncertainty is still high. In the United States, economic growth is being supported by strong consumption and a surge in AI investment. The US government shutdown caused volatility in quarterly growth and delayed the release of some key economic data. Tariffs are causing some upward pressure on US inflation. In the euro area, economic growth has been stronger than expected, with the services sector showing particular resilience. In China, soft domestic demand, including more weakness in the housing market, is weighing on growth. Global financial conditions, oil prices, and the Canadian dollar are all roughly unchanged since the Bank’s October Monetary Policy Report (MPR).

Canada’s economy grew by a surprisingly strong 2.6% in the third quarter, even as final domestic demand was flat. The increase in GDP largely reflected volatility in trade. The Bank expects final domestic demand will grow in the fourth quarter, but with an anticipated decline in net exports, GDP will likely be weak. Growth is forecast to pick up in 2026, although uncertainty remains high and large swings in trade may continue to cause quarterly volatility.

Canada’s labour market is showing some signs of improvement. Employment has shown solid gains in the past three months and the unemployment rate declined to 6.5% in November. Nevertheless, job markets in trade-sensitive sectors remain weak and economy-wide hiring intentions continue to be subdued.

CPI inflation slowed to 2.2% in October, as gasoline prices fell and food prices rose more slowly. CPI inflation has been close to the 2% target for more than a year, while measures of core inflation remain in the range of 2½% to 3%. The Bank assesses that underlying inflation is still around 2½%. In the near term, CPI inflation is likely to be higher due to the effects of last year’s GST/HST holiday on the prices of some goods and services. Looking through this choppiness, the Bank expects ongoing economic slack to roughly offset cost pressures associated with the reconfiguration of trade, keeping CPI inflation close to the 2% target.

If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. Uncertainty remains elevated. If the outlook changes, we are prepared to respond. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval.

Information note

The next scheduled date for announcing the overnight rate target is January 28, 2026. The Bank’s next MPR will be released at the same time.

Is Refinancing Your Mortgage a Good Way to Consolidate Debt?

Wed, 03 Dec 2025 08:30:01 GMT

If you're a homeowner juggling multiple debts, you're not alone. Credit cards, car loans, lines of credit—it can feel like you’re paying out in every direction with no end in sight. But what if there was a smarter way to handle it?

Good news: there is. And it starts with your home.

Use the Equity You’ve Built to Lighten the Load

Every mortgage payment you make, every bit your home appreciates—you're building equity. And that equity can be a powerful financial tool.

Instead of letting high-interest debts drain your income, you can leverage your home’s equity to combine and simplify what you owe into one manageable, lower-interest payment.

What Does That Look Like?

This strategy is called debt consolidation , and there are a few ways to do it:

Refinance your existing mortgage
Access a Home Equity Line of Credit (HELOC)
Take out a second mortgage

Each option has its own pros and cons, and the right one depends on your situation. That’s where I come in—we’ll look at the numbers together and choose the best path forward.

What Can You Consolidate?

You can roll most types of consumer debt into your mortgage, including:

Credit cards
Personal loans
Payday loans
Car loans
Unsecured lines of credit
Student loans

These types of debts often come with sky-high interest rates. When you consolidate them into a mortgage—secured by your home—you can typically access much lower rates, freeing up cash flow and reducing financial stress.

Why This Works

Debt consolidation through your mortgage offers:

Lower interest rates (often significantly lower than credit cards or payday loans)
One simple monthly payment
Potential for faster repayment
Improved cash flow

And if your mortgage allows prepayment privileges—like lump-sum payments or increased monthly payments—those features can help you pay everything off even faster.

Smart Strategy, Not Just a Quick Fix

This isn’t just about lowering your monthly bills (although that’s a major perk). It’s about restructuring your finances in a way that’s sustainable, efficient, and empowering.

Instead of feeling like you're constantly catching up, you can create a plan to move forward with confidence—and even start saving again.

Here’s What the Process Looks Like:

Review your current debts and cash flow
Assess how much equity you’ve built in your home
Explore consolidation options that fit your goals
Create a personalized plan to streamline your payments and reduce overall costs

Ready to Regain Control?

If your debts are holding you back and you're ready to use the equity you've worked hard to build, let's talk. There’s no pressure—just a practical conversation about your options and how to move toward a more flexible, debt-free future.

Reach out today. I’m here to help you make the most of what you already have.

Breaking Down the Real Costs of Homeownership

Wed, 26 Nov 2025 08:30:12 GMT

Don’t Forget About Closing Costs

When planning to buy a home, most people focus on saving for the down payment. But the truth is, that’s only part of the equation. To actually finalize the purchase, you’ll also need to budget for closing costs —the out-of-pocket expenses that come up before you get the keys.

Closing costs can add up quickly, which is why they should be part of your pre-approval conversation right from the start. Lenders will even require proof that you’ve got enough funds set aside. For example, if you’re getting an insured (high-ratio) mortgage, you’ll need at least 1.5% of the purchase price available in addition to your down payment. That means a 10% down payment actually requires 11.5% of the purchase price in cash to make everything work.

Let’s break down some of the most common expenses you should prepare for:

1. Home Inspection & Appraisal

Inspection : Paid by you, this gives peace of mind that the property is in good shape and doesn’t have hidden problems.
Appraisal : Required by the lender to confirm value. Sometimes this is covered by mortgage insurance, sometimes by you.

2. Legal Fees

A lawyer or notary is required to handle the title transfer and make sure the mortgage is properly registered. Legal fees are often one of the larger closing costs—unless you’re also responsible for property transfer tax.

3. Taxes

Many provinces charge a property or land transfer tax based on the home’s purchase price. These fees can range from hundreds to thousands of dollars, so you’ll want to factor them in early.

4. Insurance

Property insurance is mandatory—lenders won’t release funds without proof that the home is insured on closing day.
Optional coverage like mortgage life, disability, or critical illness insurance may also be worth considering depending on your financial plan.

5. Moving Costs

Whether you’re renting a truck, hiring movers, or bribing friends with pizza and gas money, moving comes with expenses. Cross-country moves especially can be surprisingly pricey.

6. Utilities & Deposits

Setting up new services (electricity, water, internet) can involve connection fees or deposits, particularly if you don’t already have a payment history with the utility provider.

Plan Ahead, Stress Less

This list covers the big-ticket items, but every purchase is unique. That’s why it pays to have an accurate estimate of your personal closing costs before you make an offer.

If you’d like help planning ahead—or want a breakdown tailored to your situation—let’s connect. I’d be happy to walk you through the numbers and make sure you’re fully prepared.

Why a Mortgage Pre-Approval Protects Both Your Head and Your Heart

Wed, 19 Nov 2025 08:30:09 GMT

Why a Mortgage Pre-Approval Protects Both Your Head and Your Heart

There’s no denying it—buying a home is an emotional journey. In a competitive market, it can feel like you need to stretch beyond your comfort zone or bid above asking just to have a chance. That pressure can make it hard to separate what you want from what you can realistically afford.

One of the biggest pitfalls buyers face is falling in love with a home that’s outside their price range. Once that happens, every other property seems like a compromise—even the ones that might have been a perfect fit otherwise.

The best way to avoid this heartache? Get pre-approved before you start shopping.

What a Pre-Approval Does for You

A mortgage pre-approval gives you more than just a number—it provides clarity, confidence, and protection:

Know your buying power : Shop within your true price range and avoid disappointment.
Spot potential roadblocks : Uncover issues like credit bureau errors before you make an offer.
Get organized : Learn exactly what documentation you’ll need so there are no surprises.
Lock in a rate : Many lenders hold your rate for 30–120 days, giving you peace of mind if rates rise.
Save yourself heartache : Protect yourself from falling for a home you can’t afford.

Head vs. Heart

Buying a home is about balance. Your head tells you what’s financially sound, your heart tells you what feels right—and both matter. A pre-approval helps bring those two sides together, so you can make confident choices without emotional stress clouding your judgment.

The Bottom Line

Looking at properties for fun is one thing—but if you’re serious about buying, a pre-approval is the smartest first step you can take. It sets realistic expectations, saves time, and protects your emotions along the way.

If you’d like to explore your options and get pre-approved, I’d be happy to walk through the process with you. Let’s make sure you’re ready to shop with confidence.

Co-Signing a Mortgage in Canada: Pros, Cons & What to Expect

Wed, 12 Nov 2025 08:30:08 GMT

Co-Signing a Mortgage in Canada: Pros, Cons & What to Expect

Thinking about co-signing a mortgage? On the surface, it might seem like a simple way to help someone you care about achieve homeownership. But before you sign on the dotted line, it’s important to understand exactly what co-signing means—for them and for you.

You’re Fully Responsible

When you co-sign, your name is on the mortgage—and that makes you just as responsible as the primary borrower. If payments are missed, the lender won’t only go after them; they’ll come after you too. Missed payments or default can damage your credit score and put your financial health at risk.

That’s why trust is key. If you’re going to co-sign, make sure you have a clear picture of the borrower’s ability to manage payments—and consider monitoring the account to protect yourself.

You’re Committed Until They Can Stand Alone

Co-signing isn’t temporary by default. Even once the initial mortgage term ends, you won’t automatically be removed. The borrower has to re-qualify on their own, and only then can your name be taken off. If they don’t qualify, you stay on the mortgage for another term.

Before agreeing, talk openly about expectations: How long might you be on the mortgage? What’s the plan for eventually removing you? Having these conversations upfront prevents surprises later.

It Affects Your Own Borrowing Power

When lenders calculate your debt service ratios, the co-signed mortgage counts as your debt—even if you never make a payment on it. This could reduce how much you’re able to borrow in the future, whether it’s for your own home, an investment property, or even refinancing.

If you see another mortgage in your future, you’ll want to consider how co-signing could limit your options.

The Upside: Helping Someone Get Ahead

On the positive side, co-signing can be life-changing for the borrower. You could be helping a family member or friend buy their first home, start building equity, or take an important step forward financially. If handled with clear expectations and trust, it can be a meaningful way to support someone you care about.

The Bottom Line

Co-signing a mortgage comes with both risks and rewards. It’s not a decision to take lightly, but with careful planning, transparency, and professional advice, it can be done responsibly.

If you’re considering co-signing—or want to explore safer alternatives—let’s connect. I’d be happy to walk you through what to expect and help you decide if it’s the right move for you.

Everything You Need to Know About Mortgage Financing in Canada

Wed, 05 Nov 2025 08:30:09 GMT

For most Canadians, buying a home isn’t possible without a mortgage. And while getting a mortgage may seem straightforward—borrow money, buy a home, pay it back—it’s the details that make the difference. Understanding how mortgages work (and what to watch out for) is key to keeping your borrowing costs as low as possible.

The Basics: How a Mortgage Works

A mortgage is a loan secured against your property. You agree to pay it back over an amortization period (often 25 years), divided into shorter terms (ranging from 6 months to 10 years). Each term comes with its own interest rate and rules.

While the interest rate is important, it’s not the only thing that determines the true cost of your mortgage. Features, penalties, and flexibility all play a role—and sometimes a slightly higher rate can save you thousands in the long run.

Key Questions to Ask Before Choosing a Mortgage

How long will you stay in the property?
Your timeframe helps determine the right term length and product.
Do you need flexibility to move?
If a work transfer or lifestyle change is possible, portability may be important.
What are the penalties for breaking the mortgage early?
This is one of the biggest factors in the real cost of borrowing. A low rate won’t save you if breaking costs you tens of thousands.
How are penalties calculated?
Some lenders use more borrower-friendly formulas than others. It’s not easy to calculate yourself—get professional help.
Can you make extra payments?
Prepayment privileges allow you to pay off your mortgage faster, potentially saving years of interest.
How is the mortgage registered on title?
Some registrations (like collateral charges) can limit your ability to switch lenders at renewal without extra costs.
Which type of mortgage fits best?
Fixed, variable, HELOCs, or even reverse mortgages each have their place depending on your financial and life situation.
What’s your down payment?
A larger down payment could reduce or eliminate mortgage insurance premiums, saving thousands upfront.

Why the Lowest Rate Isn’t Always the Best Choice

It’s tempting to chase the lowest rate, but mortgages with rock-bottom pricing often come with restrictive terms. For example, saving 0.10% on your rate may put a few extra dollars in your pocket each month, but if the mortgage has harsh penalties, you could end up paying thousands more if you break it early.

The goal isn’t just the lowest rate—it’s the lowest overall cost of borrowing . That’s why it’s so important to look beyond the headline number and consider the whole picture.

The Bottom Line

Mortgage financing in Canada is about more than rate shopping. It’s about aligning your mortgage with your financial goals, lifestyle, and future plans. The best way to do that is to work with an independent mortgage professional who can walk you through the fine print and help you secure the product that truly keeps your costs low.

If you’d like to explore your options—or review your current mortgage to see if it’s really working in your favour—let’s connect. I’d be happy to help.

Bank of Canada Cuts but may have also thrown us a Curveball Oct 29

Fri, 31 Oct 2025 15:32:59 GMT

Apologies in advance for all the baseball puns! We are fully on the Blue Jay bandwagon over here ad loving every minute of it! Who knew baseball could be so much fun and wow, the strategy!! Very impressed!!

As you likely heard, the Bank of Canada took the mound and cut the BOC policy rate to 2.25% which will push prime down to 4.45%. That’s the lowest since mid-2022.

This was not a celebratory pitch. It was a damage-control adjustment to help an economy that’s limping between bases.

Why the BoC Made the Move

Think of the economy as a lineup that’s losing steam:

GDP contracted — investment and exports are getting jammed inside
Jobs remain soft — hiring is weak, unemployment is climbing
Trade uncertainty (especially CUSMA renewal drama) has businesses choking up on the bat
Consumers are still swinging , but they can’t win the series alone

Inflation Scoreboard

Inflation isn’t a shutout, but the score is manageable:

CPI hovering near 2–2.5%
Core still “sticky” around 3%, but trending lower
BoC believes price pressures will cool further in coming innings

That gave them the green light to make this cut without risking a walk-off inflation disaster.

Forward Guidance = “Don’t Expect Extra Cuts Right Away”

Macklem essentially said:

If the game plays out as expected, this is the right rate for now.

Translation: barring a shock, don’t expect another cut in December.

This is likely a pause , not the start of an aggressive easing cycle.

Markets agree — odds of another cut next meeting are tiny.

Bank of Canada Rate Announcement Oct 29th, 2025

Wed, 29 Oct 2025 14:17:18 GMT

Bank of Canada lowers policy rate to 2¼%.

FOR IMMEDIATE RELEASE

Read the October 29th, 2025 Monetary Report

October 29, 2025

The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

With the effects of US trade actions on economic growth and inflation somewhat clearer, the Bank has returned to its usual practice of providing a projection for the global and Canadian economies in this Monetary Policy Report (MPR). Because US trade policy remains unpredictable and uncertainty is still higher than normal, this projection is subject to a wider-than-usual range of risks.

While the global economy has been resilient to the historic rise in US tariffs, the impact is becoming more evident. Trade relationships are being reconfigured and ongoing trade tensions are dampening investment in many countries. In the MPR projection, the global economy slows from about 3¼% in 2025 to about 3% in 2026 and 2027.

In the United States, economic activity has been strong, supported by the boom in AI investment. At the same time, employment growth has slowed and tariffs have started to push up consumer prices. Growth in the euro area is decelerating due to weaker exports and slowing domestic demand. In China, lower exports to the United States have been offset by higher exports to other countries, but business investment has weakened. Global financial conditions have eased further since July and oil prices have been fairly stable. The Canadian dollar has depreciated slightly against the US dollar.

Canada’s economy contracted by 1.6% in the second quarter, reflecting a drop in exports and weak business investment amid heightened uncertainty. Meanwhile, household spending grew at a healthy pace. US trade actions and related uncertainty are having severe effects on targeted sectors including autos, steel, aluminum, and lumber. As a result, GDP growth is expected to be weak in the second half of the year. Growth will get some support from rising consumer and government spending and residential investment, and then pick up gradually as exports and business investment begin to recover.

Canada’s labour market remains soft. Employment gains in September followed two months of sizeable losses. Job losses continue to build in trade-sensitive sectors and hiring has been weak across the economy. The unemployment rate remained at 7.1% in September and wage growth has slowed. Slower population growth means fewer new jobs are needed to keep the employment rate steady.

The Bank projects GDP will grow by 1.2% in 2025, 1.1% in 2026 and 1.6% in 2027. On a quarterly basis, growth strengthens in 2026 after a weak second half of this year. Excess capacity in the economy is expected to persist and be taken up gradually.

CPI inflation was 2.4% in September, slightly higher than the Bank had anticipated. Inflation excluding taxes was 2.9%. The Bank’s preferred measures of core inflation have been sticky around 3%. Expanding the range of indicators to include alternative measures of core inflation and the distribution of price changes among CPI components suggests underlying inflation remains around 2½%. The Bank expects inflationary pressures to ease in the months ahead and CPI inflation to remain near 2% over the projection horizon.

With ongoing weakness in the economy and inflation expected to remain close to the 2% target, Governing Council decided to cut the policy rate by 25 basis points. If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. If the outlook changes, we are prepared to respond. Governing Council will be assessing incoming data carefully relative to the Bank’s forecast.

The Canadian economy faces a difficult transition. The structural damage caused by the trade conflict reduces the capacity of the economy and adds costs. This limits the role that monetary policy can play to boost demand while maintaining low inflation. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval.

Information note

The next scheduled date for announcing the overnight rate target is December 10, 2025. The Bank’s next MPR will be released on January 28, 2026.

Tips to Pay Off Your Mortgage Early

Wed, 22 Oct 2025 07:30:21 GMT

Owning a home feels great—carrying a large mortgage, not so much. The good news? With the right strategies, you can shorten your amortization, save thousands in interest, and become mortgage-free sooner than you think. Here are four proven ways to make it happen:

1. Switch to Accelerated Payments

One of the simplest ways to reduce your mortgage faster is by moving from monthly payments to accelerated bi-weekly payments . Instead of 12 monthly payments a year, you’ll make 26 half-payments. That works out to the equivalent of one extra monthly payment each year, shaving years off your mortgage—often without you noticing much difference in your budget.

2. Increase Your Regular Payments

Most mortgages allow you to boost your regular payment by 10–25%. Some even let you double up payments occasionally. Every extra dollar goes directly toward your principal, which means less interest and faster progress toward paying off your balance.

3. Make Lump-Sum Payments

Depending on your lender, you may be able to make lump-sum payments of 10–25% of your original mortgage balance each year. This option is ideal if you receive a bonus, inheritance, or other windfall. Applying a lump sum directly to your principal immediately reduces the interest charged for the rest of your term.

4. Review Your Mortgage Annually

It’s easy to put your mortgage on auto-pilot, but a yearly review keeps you in control. By sitting down with an independent mortgage professional, you can check if refinancing, restructuring, or adjusting terms could save you money. A quick annual review helps ensure your mortgage is always working for you—not against you.

The Bottom Line

Paying off your mortgage early doesn’t require a massive lifestyle change—it’s about making smart, consistent choices. Whether it’s accelerated payments, lump sums, or regular reviews, every step you take helps reduce your debt faster.

If you’d like to explore strategies tailored to your situation—or want a free annual mortgage review—let’s connect. I’d be happy to help you find the fastest path to mortgage freedom.

Buying a Vacation Property or Rental? Here’s What Lenders Look For

Wed, 15 Oct 2025 07:30:14 GMT

Owning a vacation home or an investment rental property is a dream for many Canadians. Whether it’s a cottage on the lake for family getaways or a rental unit to generate extra income, real estate can be both a lifestyle choice and a smart financial move. But before you dive in, it’s important to know what lenders look for when financing these types of properties.

1. Down Payment Requirements

The biggest difference between buying a primary residence and a vacation or rental property is the down payment.

Vacation property (owner-occupied, seasonal, or secondary home): Typically requires at least 5–10% down, depending on the lender and whether the property is winterized and accessible year-round.
Rental property: Usually requires a minimum of 20% down. This is because rental income can fluctuate, and lenders want extra security before approving financing.

2. Property Type & Location

Not all properties qualify for traditional mortgage financing. Lenders consider:

Accessibility : Is the property accessible year-round (roads maintained, utilities available)?
Condition : Seasonal or non-winterized cottages may not meet standard lending criteria.
Zoning & Use : If it’s a rental, lenders want to ensure it complies with municipal bylaws and zoning regulations.

Properties that fall outside these norms may require financing through alternative lenders, often with higher rates but more flexibility.

3. Rental Income Considerations

If you’re buying a property with the intent to rent it out, lenders may factor the rental income into your mortgage application.

Long-term rentals : Lenders typically accept 50–80% of the expected rental income when calculating your debt-service ratios.
Short-term rentals (Airbnb, VRBO, etc.) : Many traditional lenders are cautious about using projected income from short-term rentals. Alternative lenders may be more flexible, depending on the property’s location and your financial profile.

4. Debt-Service Ratios

Lenders use your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to determine if you can handle the mortgage payments alongside your other obligations. With investment or vacation properties, lenders may apply stricter guidelines, especially if your primary residence already carries a large mortgage.

5. Credit & Financial Stability

Your credit score, employment history, and overall financial health still matter. Since vacation and rental properties are considered higher risk, lenders want reassurance that you can handle the additional debt—even if rental income fluctuates or the property sits vacant.

6. Insurance Requirements

Rental properties often require specialized landlord insurance, and vacation homes may need coverage tailored to seasonal or secondary use. Lenders will want proof of adequate insurance before releasing mortgage funds.

The Bottom Line

Buying a vacation property or rental can be exciting, but financing these purchases comes with extra rules and considerations. From higher down payments to stricter property requirements, lenders want to be confident that you can handle the responsibility.

If you’re considering a second property, the best step is to work with a mortgage professional who can compare lender requirements, outline your options, and find the financing that works best for you.

Thinking about making your dream of a vacation or rental property a reality? Connect with us today.

What to Expect in the Closing Process: A Step-by-Step Guide

Wed, 08 Oct 2025 07:30:18 GMT

You’ve found the right home, your offer’s been accepted, and your financing is approved—congratulations! But before you can pick up the keys and celebrate, there’s one more important stage: the closing process.

Closing is the final step in your homebuying journey, where all the paperwork, legal details, and financial transactions come together. It can feel overwhelming if you don’t know what to expect, but with the right preparation, closing can be smooth and stress-free.

Here’s a step-by-step guide to help you understand the process.

Step 1: Hire a Lawyer or Notary

A real estate lawyer (or notary, depending on your province) handles the legal side of closing. They will:

Review the purchase agreement and mortgage documents
Conduct a title search to confirm the seller has the legal right to sell the property
Ensure the mortgage lender is properly registered on the title
Handle the transfer of funds between you, the lender, and the seller

Your lawyer or notary will be your main point of contact during closing, so choose one you trust and who communicates clearly.

Step 2: Finalize Your Mortgage

Your lender will send the mortgage instructions directly to your lawyer or notary. At this stage:

You’ll provide proof of property insurance (lenders require this before releasing funds)
You’ll confirm your down payment and closing costs are available in your lawyer’s trust account
The lawyer will prepare all documents for your review and signature

Step 3: Pay Closing Costs

Closing costs typically range from 1.5% to 4% of the purchase price. These can include:

Legal fees
Title insurance
Land transfer tax (where applicable)
Adjustments for property taxes or utilities prepaid by the seller
Home inspection or appraisal fees (if not already paid)

Your lawyer will provide a final statement of adjustments so you know exactly how much is due on closing day.

Step 4: Sign the Paperwork

A few days before closing, you’ll meet with your lawyer or notary to sign all the necessary documents, including:

Mortgage agreement
Title transfer
Insurance confirmations
Statement of adjustments

Bring valid government-issued ID to this appointment.

Step 5: Transfer of Funds

On the day of closing:

Your lender sends the mortgage funds to your lawyer
Your lawyer combines these funds with your down payment and pays the seller
Legal ownership of the property is transferred into your name
The lender is registered on title as a secured creditor

Step 6: Get the Keys!

Once the paperwork is filed and the funds have cleared, your lawyer will confirm that the transaction is complete. You’ll then get the keys to your new home—officially making it yours.

The Bottom Line

The closing process is a series of important steps, but with the right team in place, it doesn’t have to be stressful. By working closely with your mortgage professional and lawyer, you’ll have guidance every step of the way—from signing the documents to turning the key in the front door.

If you’d like help preparing for the closing process—or want a clear breakdown of your own closing costs— connect with us today.

OSFI’s Rental Mortgage Update: The Truth Behind the Headlines

Mon, 06 Oct 2025 19:05:43 GMT

The Buzz

Everyone’s been talking:

“You can’t use rental income to qualify anymore!”
“Investors are toast!”

Not true!

This isn’t a new rule about who can borrow.
It’s a change in how banks classify risk AND it’s mostly behind-the-scenes .

What OSFI Actually Said

OSFI (the federal banking regulator) told lenders:

“Don’t double-count borrower income when qualifying multiple properties.”

That means:

You can still use personal income to qualify for a rental purchase.
You just can’t reuse the same income that’s already tied up servicing another mortgage.
If more than 50% of the income used to qualify comes from rent, that loan gets classified as income-producing (a.k.a. higher risk for the bank’s capital rules).

What This Means for Borrowers

No direct rule change to how clients qualify today.
Banks may adjust internal risk buckets.
If anything, you might see a tiny rate bump (we’re talking 0.05%-ish).
The change takes effect Nov 1 / 2025 for major banks.

So for now, no reason to panic, but we will be watching and waiting for lender clarification on policy changes, if any.

What Realtors Should Know

Encourage clients to talk to a mortgage professional early! This is especially important if they own multiple properties.
Some lenders may tighten up or add small buffers for rental income.
Today it is still business as usual.

The Bottom Line

This isn’t a lending crackdown.
It’s regulatory housekeeping about how banks report risk.

Borrowers can still buy rentals.
Lenders can still lend.
OSFI just wants cleaner math.

Big thanks to Rob McLister (Mortgage Logic News) for cutting through the noise and clarifying what this really means for our industry.

Stress-Testing Your Mortgage Affordability: Why It Matters

Wed, 01 Oct 2025 07:30:19 GMT

Buying a home is one of the biggest financial commitments you’ll ever make. That’s why lenders want to be sure you can handle your mortgage payments—not just today, but also if interest rates rise in the future. This is where the mortgage stress test comes in.

Many Canadians hear the term but aren’t entirely sure what it means or how it affects them. Let’s break it down in plain language.

What Is the Mortgage Stress Test?

The stress test is a rule introduced by the federal government that requires all mortgage applicants to qualify at a higher rate than the one they’ll actually pay.

Currently, you must qualify at the greater of your contract rate + 2% or the benchmark qualifying rate (set by the Office of the Superintendent of Financial Institutions).

For example:

If your lender offers you a 5-year fixed mortgage at 5.25%, you must show you could still afford the payments at 7.25% .
Even if rates don’t rise that high, the stress test ensures you won’t be overextended if they do.

Why Does It Matter?

The stress test protects both borrowers and lenders by:

Preventing over-borrowing : It ensures you don’t take on more debt than you can realistically handle.
Preparing for rate hikes : With interest rates fluctuating, it’s a safeguard against sudden increases.
Strengthening financial stability : It lowers the risk of defaults, protecting the housing market as a whole.

While it can sometimes feel like a barrier—reducing the amount you qualify for—it’s ultimately designed to keep you from becoming “house poor.”

How Does It Impact Buyers?

The stress test can significantly affect your homebuying budget. For example, without it, you might qualify for a $600,000 mortgage, but with the stress test applied, you may only qualify for $500,000.

That doesn’t mean your dream of homeownership is out of reach—it just means you may need to adjust expectations or explore other strategies, such as:

Increasing your down payment
Paying down existing debts
Considering alternative lenders who may have different qualification standards

Why Work With a Mortgage Professional?

Every lender applies the stress test, but not every lender views your application the same way. An independent mortgage professional can:

Shop multiple lenders to find the best fit
Run affordability scenarios at different rates
Help you understand how much house you can truly afford—without stretching your finances too thin

The Bottom Line

The mortgage stress test isn’t meant to stop you from buying a home—it’s there to protect you from financial strain down the road. By understanding how it works and planning ahead, you can make smarter choices and buy with confidence.

If you’re thinking about purchasing a home, refinancing, or simply want to know how the stress test affects your options, connect with us today. We’ll help you stress-test your budget and find the mortgage solution that works best for you.

What To Do If You Have Missed A Payment

Wed, 24 Sep 2025 07:30:08 GMT

If you’ve missed a payment on your credit card or line of credit and you’re wondering how to handle things and if this will impact your creditworthiness down the road, this article is for you.

But before we get started, if you have an overdue balance on any of your credit cards at this exact moment, go, make the minimum payment right now. Seriously, log in to your internet banking and make the minimum payment. The rest can wait.

Here’s the good news, if you’ve just missed a payment by a couple of days, you have nothing to worry about. Credit reporting agencies only record when you’ve been 30, 60, and 90 days late on a payment. So, if you got busy and missed your minimum payment due date but made the payment as soon as you realized your error, as long as you haven’t been over 30 days late, it shouldn’t show up as a blemish on your credit report.

However, there’s nothing wrong with making sure. You can always call your credit card company and let them know what happened. Let them know that you missed the payment but that you paid it as soon as you could. Keeping in contact with them is the key. By giving them a quick call, if you have a history of timely payments, they might even go ahead and refund the interest that accumulated on the missed payment. You never know unless you ask!

Now, if you’re having some cash flow issues, and you’ve been 30, 60, or 90 days late on payments, and you haven’t made the minimum payment, your creditworthiness has probably taken a hit. The best thing you can do is make all the minimum payments on your accounts as soon as possible.

Getting up to date as quickly as possible will mitigate the damage to your credit score. The worst thing you can do is bury your head in the sand and ignore the problem, because it won’t go away.

If you cannot make your payments, the best action plan is to contact your lender regularly until you can. They want to work with you! The last thing they want is radio silence on your end. If they haven’t heard from you after repeated missed payments, they might write off your balance as “bad debt” and assign it to a collection agency. Collections and bad debts look bad on your credit report.

As far as qualifying for a mortgage goes, repeated missed payments will negatively impact your ability to get a mortgage. But once you’re back to making regular payments, the more time that goes by, the better your credit will get. It’s all about timing. Always try to be as current as possible with your payments.

So If you plan to buy a property in the next couple of years, it’s never too early to work through your financing, especially if you’ve missed a payment or two in the last couple of years and you’re unsure of where you stand with your credit.

Please connect directly; it would be a pleasure to walk through your mortgage application and credit report. Let’s look and see exactly where you stand and what steps you need to take to qualify for a mortgage.

Bank of Canada Rate Announcement Sept 17th, 2025

Wed, 17 Sep 2025 14:35:31 GMT

Bank of Canada lowers policy rate to 2½%.

FOR IMMEDIATE RELEASE

September 17, 2025

The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%.

After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing. In the United States, business investment has been strong but consumers are cautious and employment gains have slowed. US inflation has picked up in recent months as businesses appear to be passing on some tariff costs to consumer prices. Growth in the euro area has moderated as US tariffs affect trade. China’s economy held up in the first half of the year but growth appears to be softening as investment weakens. Global oil prices are close to their levels assumed in the July Monetary Policy Report (MPR). Financial conditions have eased further, with higher equity prices and lower bond yields. Canada’s exchange rate has been stable relative to the US dollar.

Canada’s GDP declined by about 1½% in the second quarter, as expected, with tariffs and trade uncertainty weighing heavily on economic activity. Exports fell by 27% in the second quarter, a sharp reversal from first-quarter gains when companies were rushing orders to get ahead of tariffs. Business investment also declined in the second quarter. Consumption and housing activity both grew at a healthy pace. In the months ahead, slow population growth and the weakness in the labour market will likely weigh on household spending.

Employment has declined in the past two months since the Bank’s July MPR was published. Job losses have largely been concentrated in trade-sensitive sectors, while employment growth in the rest of the economy has slowed, reflecting weak hiring intentions. The unemployment rate has moved up since March, hitting 7.1% in August, and wage growth has continued to ease.

CPI inflation was 1.9% in August, the same as at the time of the July MPR. Excluding taxes, inflation was 2.4%. Preferred measures of core inflation have been around 3% in recent months, but on a monthly basis the upward momentum seen earlier this year has dissipated. A broader range of indicators, including alternative measures of core inflation and the distribution of price changes across CPI components, continue to suggest underlying inflation is running around 2½%. The federal government’s recent decision to remove most retaliatory tariffs on imported goods from the US will mean less upward pressure on the prices of these goods going forward.

With a weaker economy and less upside risk to inflation, Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks. Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity. Governing Council is proceeding carefully, with particular attention to the risks and uncertainties. Governing Council will be assessing how exports evolve in the face of US tariffs and changing trade relationships; how much this spills over into business investment, employment, and household spending; how the cost effects of trade disruptions and reconfigured supply chains are passed on to consumer prices; and how inflation expectations evolve.

The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled.

Information note

The next scheduled date for announcing the overnight rate target is October 29, 2025. The Bank’s October Monetary Policy Report will be released at the same time.

Down Payment Options for Canadian Homebuyers

Wed, 10 Sep 2025 07:30:13 GMT

For most Canadians, the down payment is the biggest hurdle to homeownership. A down payment is the initial amount you contribute toward your property purchase, while the lender covers the rest through a mortgage. By law, Canadian lenders can only finance up to 95% of a property’s value, which means you’ll need at least 5% down to qualify.

If you’re putting down less than 20%, your mortgage must be insured through one of Canada’s three default insurance providers— CMHC, Sagen (formerly Genworth), or Canada Guaranty . This insurance comes at a cost, but it can be rolled into your mortgage amount. The less you put down, the higher the premium.

Since saving a down payment can feel overwhelming, it helps to know the different sources you can draw from. Here are the most common options available to Canadian homebuyers:

1. Savings & Personal Resources

The most straightforward source is your own savings. Lenders will ask to see a 90-day history of the funds in your account. Any large deposits outside of regular payroll must be explained with documentation—such as the sale of a vehicle or a transfer from an investment account. This requirement isn’t just red tape; it’s part of Canada’s anti-money laundering rules.

2. Proceeds from the Sale of a Property

If you’ve recently sold another home, you can use the proceeds as a down payment on your new purchase. Proof of the sale—such as the final statement of adjustments from your lawyer—will be required.

3. RRSP Home Buyers’ Plan (HBP)

First-time buyers can withdraw up to $35,000 each (or $70,000 as a couple) from their RRSPs to put toward a down payment under the federal Home Buyers’ Plan . The funds are withdrawn tax-free, but they must be repaid over a 15-year period. This is a popular option for buyers who have been steadily contributing to their retirement savings.

4. Gifted Down Payment

With today’s housing prices, many buyers turn to family for help. A parent or immediate family member can provide a gift that makes up part—or even all—of the required down payment. The lender will require a signed gift letter confirming that the money is a true gift (with no repayment expected) and proof that the funds have been deposited into your account.

5. Borrowed Down Payment

In some cases, you may be able to borrow your down payment. This option is usually available only if you have strong credit and sufficient income. The payments on the borrowed funds are factored into your debt service ratios, so affordability is key. Lenders typically use 3% of the outstanding balance when calculating the additional payment.

The Bottom Line

A down payment doesn’t have to come from just one source—it can be a combination of savings, gifted funds, RRSPs, or other resources. What matters most is being able to show where the money came from and that it meets lender requirements.

If you’d like to explore your options or learn how much you might qualify for, it’s never too early to start the conversation. Connect with us today—we’d be happy to help you create a plan and take the first steps toward homeownership.

The Source Of Your Downpayment Matters

Wed, 03 Sep 2025 07:30:14 GMT

If you’re looking to purchase a property, although you might not think it matters too much, the source of your downpayment means a great deal to the lender. Let’s discuss the lender requirements, what your downpayment tells the lender about your financial situation, a how downpayment helps establish the mortgage loan to value.

Anti-money laundering

Lenders care about your downpayment source because, legally, they have to. To prevent money laundering, lenders have to document the source of the downpayment on every home purchase.

Acceptable forms of downpayment are money from your resources, borrowed funds through an insured program called the FlexDown, or money you receive as a gift from an immediate family member.

To prove the funds are from your resources and not laundered money from the proceeds of crime, you’ll be required to provide bank statements showing the money has been in your account for at least 90 days or that you’ve accumulated the funds through payroll deposits or other acceptable means.

Now, if you’re borrowing all or part of your downpayment, you’ll need to include the costs of carrying the payments on the borrowed downpayment in your debt service ratios. If you’re the recipient of a gift from a direct family member, you’ll need to provide a signed gift letter indicating that the funds are a true gift and have no schedule for repayment. From there, you’ll need to show the money deposit into your account.

Financial suitability

Lenders care about the source of the downpayment because it is an indicator that you are financially able to purchase the property.

Showing the lender that your downpayment is coming from your resources is the best. This demonstrates that you have positive cash flow and that you’re able to save money and manage your finances in a way that indicates you’ll most likely make your mortgage payments on time. If your downpayment is borrowed or from a gift, there’s a chance that they’ll want to scrutinize the rest of your application more closely.

The bigger your downpayment, the better, well, as far as the lender is concerned. The way they see it, there is a direct correlation between how much money you have as equity to the likelihood you will or won’t default on their mortgage. Essentially, the more equity you have, the less likely you will walk away from the mortgage, which lessens their risk.

Downpayment establishes the loan to value (LTV)

Thirdly, your downpayment establishes the loan to value ratio. The loan to value ratio or LTV is the percentage of the property’s value compared to the mortgage amount. In Canada, a lender cannot lend more than 95% of a property’s value. So, if you’re buying a home for $400k, the lender can lend $380k, and you’re responsible for coming up with 5%, $ 20k in this situation.

But you might be asking yourself, how does the source of the downpayment impact LTV? Great question, and to answer this, we have to look at how to establish property value. Simply put, something is worth what someone is willing to pay for it and what someone is willing to sell it for. Of course, within reason, having no external factors coming into play. When dealing with real estate, an appraisal of the property will include comparisons of what other people have agreed to pay for similar properties in the past.

You’ll often hear of situations where buyers and sellers try to inflate the sale price to help finalize the transaction artificially. Any scenario where the buyer isn’t coming up with all of the money for the downpayment, independent of the seller, impacts the LTV.

All details of a real estate transaction purchase and sale have to be disclosed to the lender. If there’s any money transferring behind the scenes, this impacts the LTV, and the lender won’t proceed with financing. Non-disclosure to the lender is mortgage fraud.

So there you have it; hopefully, this provides context to why lenders ask for documents to prove the source of your downpayment. If you’d like to talk about mortgage financing, please connect anytime; it would be a pleasure to work with you.

From Summer Shine to Fall Fine: Smart Home Projects to Tackle Before the First Frost

Thu, 28 Aug 2025 00:02:23 GMT

As patios wind down and pumpkin spice ramps up, fall is the perfect reset for your home—and your homeowner game plan. These quick wins boost comfort, curb appeal, and efficiency now, and set you up for a low-stress winter (and a strong spring market).

1) Safety & “silent leak” checks (Weekend-ready)

Clean gutters & downspouts. Add leaf guards where trees overhang.
Roof scan. Look for lifted shingles, cracked flashings, or moss.
Seal the shell. Re-caulk window/door trim; replace weatherstripping.
Test alarms. New batteries for smoke/CO detectors; add one near bedrooms.
Why it matters: Prevent water intrusion and heat loss before storms roll in.

2) Heat smarter, not harder

Furnace/boiler tune-up and filter change.
Smart thermostat with schedules and geofencing.
Draft hunt. Foam gaskets behind outlets, door sweeps on exterior doors.
ROI tip: Efficiency upgrades lower monthly bills and can improve lender ratios if you’re eyeing a refinance later.

3) Fall-proof your yard (so spring you says “thanks”)

Aerate + overseed + fall fertilize for thicker turf next year.
Trim trees/shrubs away from siding and power lines.
Mulch perennials and plant spring bulbs now.
Shut off/bleed exterior taps and store hoses to avoid burst pipes.

4) Extend outdoor season (cozy edition)

Portable fire pit or propane heater + layered blankets.
Path/step lighting for darker evenings (solar or low-voltage).
Weather-resistant storage for cushions/tools to preserve value.
Neighborhood curb appeal: Warm lighting and tidy beds make a big first impression if you list in shoulder season.

5) Water management = winter peace of mind

Re-grade low spots and add downspout extensions (2–3+ metres).
Check sump pump (and backup).
Look for efflorescence or damp corners in the basement.

6) Mini-renos that punch above their weight

Entry/mudroom upgrade: hooks, bench, boot trays, closed storage.
Laundry room tune-up: counter over machines, sorting bins, task lighting.
Kitchen refresh: new hardware, tap, and under-cabinet lighting in one afternoon.
Budget guide: Many of these land under a micro-reno budget—perfect for a modest line of credit.

7) Indoor air quality tune-up

Deep clean vents and dryers (including the rigid duct).
Add door mats (exterior + interior) to catch grit/salt.
Houseplants or HEPA purifier for closed-window months.

Fast Timeline (pin this to the fridge)

Late August–September

Gutters/downspouts, roof/caulking, HVAC service, lawn care, plant bulbs, exterior tap shut-off plan, path lighting.

October

Weatherstripping/sweeps, fire pit setup, organize mudroom/garage, test alarms, sump check, downspout extensions, dryer vent cleaning.

Financing smarter: make your mortgage work for your home

Annual mortgage check-in. As rates, income, and goals evolve, a quick review can free up cash flow or open options for a small fall project budget.
HELOC vs. top-up refinance. For bite-size projects, a HELOC can be flexible. For bigger renos you plan to pay down, a top-up refi might make more sense.
Bundle & prioritize. Knock out the high-impact, low-cost items first (air sealing, safety, water management) before the cosmetic upgrades.

Not sure which route fits your fall plans? We’ll run the numbers and map the best financing path for your specific budget and goals.

Quick Checklist (copy/paste)

☐ Clean gutters/downspouts; add guards
☐ Roof & flashing visual check
☐ Re-caulk, weatherstrip, add door sweeps
☐ HVAC service + new filter
☐ Aerate/overseed/fertilize; trim trees; plant bulbs
☐ Path & entry lighting
☐ Drain/bleed outdoor taps; store hoses
☐ Downspout extensions; sump test
☐ Dryer vent cleaning
☐ Mudroom/garage organization
☐ Schedule mortgage review / discuss HELOC vs refi

Ready to make fall your low-stress season?

Book a quick fall mortgage check-up—15 minutes to see if a small credit line or a tweak to your current mortgage could cover your priority projects without straining cash flow.

What Is A Spousal Buyout?

Wed, 27 Aug 2025 07:30:17 GMT

If you’re going through or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property and buy out your ex-spouse.

If you’re like most people, your property is your most significant asset and is where most of your equity is tied up. If this is the case, it’s possible to structure a new mortgage that allows you to purchase the property from your ex-spouse for up to 95% of the property’s value. Alternatively, if your ex-spouse wants to keep the property, they can buy you out using the same program.

It’s called the spousal buyout program. Here are some of the common questions people have about the program.

Is a finalized separation agreement required?

Yes. To qualify, you’ll need to provide the lender with a copy of the signed separation agreement, which clearly outlines asset allocation.

Can the net proceeds be used for home renovations or pay off loans?

No. The net proceeds can only buy out the other owner’s share of equity and/or pay off joint debt as explicitly agreed upon in the finalized separation agreement.

What is the maximum amount that you can access through the program?

The maximum equity you can withdraw is the amount agreed upon in the separation agreement to buy out the other owner’s share of the property and/or retire joint debts (if any), not exceeding 95% loan to value.

What is the maximum permitted loan to value?

The maximum loan to value is the lesser of 95% or the remaining mortgage + the equity required to buy out other owner and/or pay off joint debt (which, in some cases, can total < 95% LTV. The property must be the primary owner-occupied residence.

Do all parties have to be on title?

Yes. All parties to the transaction have to be current registered owners on title. Your solicitor will be required to confirm this with a title search.

Do the parties have to be a married or common-law couple?

No. Not only will the spousal buyout program support married and common-law couples who are divorcing or separating, but it’s also designed for friends or siblings who need an exit from a mortgage. The lender can consider this on an exception basis with insurer approval. In this case, as there won’t be a separation agreement, a standard clause will need to be included in the purchase contract to outline the buyout.

Is a full appraisal required?

Yes. When considering this type of mortgage, a physical appraisal of the property is required as part of the necessary documents to finalize the transaction.

While this is a good start to answering some of the questions you might have about getting a mortgage to help you through a marital breakdown, it’s certainly not comprehensive. When you work with an independent mortgage professional, not only do you get a choice between lenders and considerably more mortgage options, but you get the unbiased mortgage advice to ensure you understand all your options and get the right mortgage for you.

Please connect anytime; it would be a pleasure to discuss your needs directly and provide you with options to help you secure the best mortgage financing available. Also, please be assured that all communication will be held in the strictest of confidence.

Assigning A Construction Mortgage

Wed, 20 Aug 2025 07:30:10 GMT

One of the benefits of working with an independent mortgage professional is having lots of great financing options! Rather than dealing with a single lender with one set of products, independent mortgage professionals work with multiple lenders who offer a wide selection of mortgage financing options that provide more choice.

Increased choice in mortgage products is beneficial when your situation isn’t “normal,” or you don’t quite fit the profile of a standard buyer. Purchasing a new construction home through an assignment contract would be a great example of this.

The good news is, there are lenders available exclusively through the broker channel that have favourable policies for assignment purchases.

Here are some of the highlights:

All standard purchase qualifications apply, including applicable income verification, established credit, and required downpayment
Assignments can be at the original purchase price or current market value
Minimum 620 beacon score with no previous bankruptcies or consumer proposals
The full downpayment must come from the purchaser and not include any incentives from the seller.

As far as documentation goes, the lender will want to see the original purchase agreement signed by all parties, the MLS listing, the assignment agreement signed by the builder, the original purchaser, and the new buyer. The lender will also want to see the side agreement between the original purchaser and the new buyer, including the amended purchase price. The lender will want to substantiate the value through a full appraisal.

Now, as every situation is different, this list of conditions is in no way exhaustive but meant to show that assigning a new construction purchase contract is doable while highlighting some of the terms necessary to secure financing.

If you’re looking to purchase new construction through an assignment contract, or if you’d like to discuss purchasing a home through traditional means, please connect anytime! It would be a pleasure to outline the mortgage products on the market that won’t limit your financing options!

How Payment Frequency Impacts Mortgage Financing

Wed, 13 Aug 2025 07:30:09 GMT

You’ve most likely heard that there are two certainties in life; death and taxes. Well, as it relates to your mortgage, the single certainty is that you will pay back what you borrow, plus interest. With that said, the frequency of how often you make payments to the lender is somewhat up to you!

The following looks at the different types of payment frequencies and how they impact your mortgage.

Here are the six payment frequency types

Monthly payments – 12 payments per year
Semi-Monthly payments – 24 payments per year
Bi-weekly payments – 26 payments per year
Weekly payments – 52 payments per year
Accelerated bi-weekly payments – 26 payments per year
Accelerated weekly payments – 52 payments per year

Options one through four are straightforward and designed to match your payment frequency with your employer. So if you get paid monthly, it makes sense to arrange your mortgage payments to come out a few days after payday. If you get paid every second Friday, it might make sense to have your mortgage payments match your payday.

However, options five and six have that word accelerated before the payment frequency. Accelerated bi-weekly and accelerated weekly payments accelerate how fast you pay down your mortgage. Choosing the accelerated option allows you to lower your overall cost of borrowing on autopilot. Here’s how it works.

With the accelerated bi-weekly payment frequency, you make 26 payments in the year. Instead of dividing the total annual payment by 26 payments, you divide the total yearly payment by 24 payments as if you set the payments as semi-monthly. Then you make 26 payments on the bi-weekly frequency at the higher amount.

So let’s use a $1000 payment as the example:

Monthly payments formula: $1000/1 with 12 payments per year. A payment of $1000 is made once per month for a total of $12,000 paid per year.

Semi-monthly formula: $1000/2 with 24 payments per year. A payment of $500 is paid twice per month for a total of $12,000 paid per year.

Bi-weekly formula: $1000 x 12 / 26 with 26 payments per year. A payment of $461.54 is made every second week for a total of $12,000 paid per year.

Accelerated bi-weekly formula: $1000/2 with 26 payments per year. A payment of $500 is made every second week for a total of $13,000 paid per year.

You see, by making the accelerated bi-weekly payments, it’s like you end up making two extra payments each year. By making a higher payment amount, you reduce your mortgage principal, which saves interest on the entire life of your mortgage.

The payments for accelerated weekly payments work the same way. It’s just that you’d be making 52 payments a year instead of 26.

By choosing an accelerated option for your payment frequency, you lower the overall cost of borrowing by making small extra payments as part of your regular payment schedule.

Now, exactly how much you’ll save over the life of your mortgage is hard to nail down. Calculations are hard to do because of the many variables; mortgages come with different amortization periods and terms with varying interest rates along the way. However, an accelerated bi-weekly payment schedule could reduce your amortization by up to three years if maintained throughout the life of your mortgage.

If you’d like to look at some of the numbers as they relate to you and your mortgage, please don’t hesitate to connect anytime; it would be a pleasure to work with you.

Mortgage Options At Renewal

Wed, 06 Aug 2025 07:30:02 GMT

It’s a commonly held belief that if you’ve made your mortgage payments on time throughout the entirety of your mortgage term, that the lender is somehow obligated to renew your mortgage.

The truth is, a lender is never under any obligation to renew your mortgage. When you sign a mortgage contract, the lender draws it up for a defined time, so when that term comes to an end, the lender has every right to call the loan.

Now, granted, most lenders are happy to renew your mortgage, but several factors could come into play to prevent this from happening, including the following:

You’ve missed mortgage payments over the term.
The lender becomes aware that you’ve recently claimed bankruptcy.
The lender becomes aware that you’re going through a separation or divorce.
The lender becomes aware that you lost your job.
Someone on the initial mortgage contract has passed away.
The lender no longer likes the economic climate and/or geographic location of your property.
The lender is no longer licensed to lend money in Canada.

Again, while most lenders are happy to renew your mortgage at the end of the term, you need to understand that they are not under any obligation to do so.

So how do you protect yourself?

Well, the first plan of action is to get out in front of things. At least 120 days before your mortgage term expires, you should be speaking with an independent mortgage professional to discuss all of your options. By giving yourself this lead time and seeking professional advice, you put yourself in the best position to proactively look at all your options and decide what’s best for you.

When assessing your options at the time of renewal, even if the lender offers you a mortgage renewal, staying with your current lender is just one of the options you have. Just because your current lender was the best option when you got your mortgage doesn’t mean they are still the best option this time around. The goal is to assess all your options and choose the one that lowers your overall cost of borrowing. It’s never a good idea to sign a mortgage renewal without looking at all your options.

Also, dealing with an independent mortgage professional instead of directly with the lender ensures you have someone working for you, on your team, instead of seeking guidance from someone with the lender’s best interest in mind.

So if you have a mortgage that’s up for renewal, whether you’re being offered a renewal or not, the best plan of action is to protect yourself by working with an independent mortgage professional. Please connect anytime; it would be a pleasure to work with you!

Bank of Canada Rate Announcement Jul 30th, 2025

Wed, 30 Jul 2025 14:15:44 GMT

Bank of Canada holds policy rate at 2¾%.

FOR IMMEDIATE RELEASE

Read the July 30th., 2025 Monetary Report

July 30, 2025

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.

While some elements of US trade policy have started to become more concrete in recent weeks, trade negotiations are fluid, threats of new sectoral tariffs continue, and US trade actions remain unpredictable. Against this backdrop, the July Monetary Policy Report (MPR) does not present conventional base case projections for GDP growth and inflation in Canada and globally. Instead, it presents a current tariff scenario based on tariffs in place or agreed as of July 27, and two alternative scenarios—one with an escalation and another with a de-escalation of tariffs.

While US tariffs have created volatility in global trade, the global economy has been reasonably resilient. In the United States, the pace of growth moderated in the first half of 2025, but the labour market has remained solid. US CPI inflation ticked up in June with some evidence that tariffs are starting to be passed on to consumer prices. The euro area economy grew modestly in the first half of the year. In China, the decline in exports to the United States has been largely offset by an increase in exports to the rest of the world. Global oil prices are close to their levels in April despite some volatility. Global equity markets have risen, and corporate credit spreads have narrowed. Longer-term government bond yields have moved up. Canada’s exchange rate has appreciated against a broadly weaker US dollar.

The current tariff scenario has global growth slowing modestly to around 2½% by the end of 2025 before returning to around 3% over 2026 and 2027.

In Canada, US tariffs are disrupting trade but overall, the economy is showing some resilience so far. After robust growth in the first quarter of 2025 due to a pull-forward in exports to get ahead of tariffs, GDP likely declined by about 1.5% in the second quarter. This contraction is mostly due to a sharp reversal in exports following the pull-forward, as well as lower US demand for Canadian goods due to tariffs. Growth in business and household spending is being restrained by uncertainty. Labour market conditions have weakened in sectors affected by trade, but employment has held up in other parts of the economy. The unemployment rate has moved up gradually since the beginning of the year to 6.9% in June and wage growth has continued to ease. A number of economic indicators suggest excess supply in the economy has increased since January.

In the current tariff scenario, after contracting in the second quarter, GDP growth picks up to about 1% in the second half of this year as exports stabilize and household spending increases gradually. In this scenario, economic slack persists in 2026 and diminishes as growth picks up to close to 2% in 2027. In the de-escalation scenario, economic growth rebounds faster, while in the escalation scenario, the economy contracts through the rest of this year.

CPI inflation was 1.9% in June, up slightly from the previous month. Excluding taxes, inflation rose to 2.5% in June, up from around 2% in the second half of last year. This largely reflects an increase in non-energy goods prices. High shelter price inflation remains the main contributor to overall inflation, but it continues to ease. Based on a range of indicators, underlying inflation is assessed to be around 2½%.

In the current tariff scenario, total inflation stays close to 2% over the scenario horizon as the upward and downward pressures on inflation roughly offset. There are risks around this inflation scenario. As the alternative scenarios illustrate, lower tariffs would reduce the direct upward pressure on inflation and higher tariffs would increase it. In addition, many businesses are reporting costs related to sourcing new suppliers and developing new markets. These costs could add upward pressure to consumer prices.

With still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, Governing Council decided to hold the policy interest rate unchanged. We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs related to tariffs and the reconfiguration of trade. If a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained, there may be a need for a reduction in the policy interest rate.

Governing Council is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases from tariffs and trade disruptions are passed on to consumer prices; and how inflation expectations evolve.

We are focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled.

Information note

The next scheduled date for announcing the overnight rate target is September 17, 2025.

Why The Subject Property Matters

Wed, 23 Jul 2025 08:00:45 GMT

When looking to qualify for a mortgage, typically, a lender will want to review four areas of your mortgage application: income, credit, downpayment/equity and the property itself. Assuming you have a great job, excellent credit, and sufficient money in the bank to qualify for a mortgage, if the property you’re looking to purchase isn’t in good condition, if you don't have a plan, you might get some pushback from the lender.

The property matters to the lender because they hold it as collateral if you default on your mortgage. As such, you can expect that a lender will make every effort to ensure that any property they finance is in good repair. Because in the rare case that you happen to default on your mortgage, they want to know that if they have to repossess, they can sell the property quickly and recoup their money.

So when assessing the property as part of any mortgage transaction, an appraisal is always required to establish value. If your mortgage requires default mortgage insurance through CMHC, Sagen (formerly Genworth), or Canada Guaranty, they’ll likely use an automated system to appraise the property where the assessment happens online. A physical appraisal is required for conventional mortgage applications, which means an appraiser will assess the property on-site.

So why is this important to know? Well, because even if you have a great job, excellent credit, and money in the bank, you shouldn’t assume that you’ll be guaranteed mortgage financing. A preapproval can only take you so far. Once the mortgage process has started, the lender will always assess the property you’re looking to purchase. Understanding this ahead of time prevents misunderstandings and will bring clarity to the mortgage process.

Practically applied, if you’re attempting to buy a property in a hot housing market and you go in with an offer without a condition of financing, once the appraisal is complete, if the lender isn’t satisfied with the state or value of the property, you could lose your deposit.

Now, what happens if you’d like to purchase a property that isn’t in the best condition? Being proactive includes knowing that there is a purchase plus improvements program that can allow you to buy a property and include some of the cost of the renovations in the mortgage. It’s not as simple as just increasing the mortgage amount and then getting the work done, there’s a process to follow, but it’s very doable.

So if you have any questions about financing your next property or potentially using a purchase plus improvements to buy a property that needs a little work, please connect anytime. It would be a pleasure to walk you through the process.

Buying a Vacation Home? Here’s What You Need to Know

Thu, 17 Jul 2025 07:15:00 GMT

The idea of owning a vacation home—your own cozy escape from everyday life—is a dream many Canadians share. Whether it’s a lakeside cabin, a ski chalet, or a beachside bungalow, a second property can add lifestyle value, rental income, and long-term wealth. But before you jump into vacation home ownership, it’s important to think through the details—both financial and practical.

Start With Your 5- and 10-Year Plan

Before you get swept away by the perfect view or your dream destination, take a step back and ask yourself:

Will you use it enough to justify the cost?
Are there other financial goals that take priority right now?
What’s the opportunity cost of tying up your money in a second home?

Owning a vacation home can be incredibly rewarding, but it should fit comfortably within your long-term financial goals—not compete with them.

Financing a Vacation Property: What to Consider

If you don’t plan to pay cash, then financing your vacation home will be your next major step. Mortgage rules for second properties are more complex than those for your primary residence, so here’s what to think about:

1. Do You Have Enough for a Down Payment?

Depending on the type of property and how you plan to use it, down payment requirements typically range from 5% to 20%+ . Factors like whether the property is winterized, the purchase price, and its location all come into play.

2. Can You Afford the Additional Debt?

Lenders will calculate your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to assess whether you can take on a second mortgage.

GDS: Should not exceed 39% of your income
TDS: Should not exceed 44%

If you’re not sure how to calculate these, that’s where I can help!

3. Is the Property Mortgage-Eligible?

Remote or non-winterized properties, or those located outside of Canada, may not qualify for traditional mortgage financing. In these cases, we may need to look at creative lending solutions .

4. Owner-Occupied or Investment Property?

Whether you’ll live in the home occasionally, rent it out, or use it strictly as an investment affects what type of financing you’ll need and what your tax implications might be.

Location, Location… Logistics

Choosing the right vacation property is more than just finding a beautiful setting. Consider:

Current and future development in the area
Available municipal services (sewer, water, road maintenance)
Transportation access – how easy is it to get to your vacation home in all seasons?
Resale value and long-term potential
Seasonal access or weather challenges

What Happens When You’re Not There?

Unless you plan to live there full-time, you'll need to consider:

Will you rent it out for extra income?
Will you hire a property manager or rely on family/friends?
What’s required to maintain valid home insurance while it’s vacant?

Planning ahead will protect your investment and give you peace of mind while you’re away.

Not Sure Where to Start? I’ve Got You Covered.

Buying a vacation home is exciting—but it can also be complicated. As a mortgage broker, I can help you:

Understand your financial readiness
Calculate your GDS/TDS ratios
Review down payment and lending requirements
Explore creative solutions like second mortgages , reverse mortgages , or alternative lenders

Whether you’re just starting to dream or ready to take action, let’s build a plan that gets you one step closer to your ideal getaway.

Reach out today—it would be a pleasure to work with you.

Parental Leave

Wed, 16 Jul 2025 07:45:43 GMT

Chances are if the title of this article piqued your interest enough to get you here, your family is probably growing. Congratulations!

If you’ve thought now is the time to find a new property to accommodate your growing family, but you’re unsure how your parental leave will impact your ability to get a mortgage, you’ve come to the right place!

Here’s how it works. When you work with an independent mortgage professional, it won’t be a problem to qualify your income on a mortgage application while on parental leave, as long as you have documentation proving that you have guaranteed employment when you return to work.

A word of caution, if you walk into your local bank to look for a mortgage and you disclose that you’re currently collecting parental leave, there’s a chance they’ll only allow you to use that income to qualify. This reduction in income isn’t ideal because at 55% of your previous income up to $595/week, you won’t be eligible to borrow as much, limiting your options.

The advantage of working with an independent mortgage professional is choice. You have a choice between lenders and mortgage products, including lenders who use 100% of your return-to-work income.

To qualify, you’ll need an employment letter from your current employer that states the following:

Your employer’s name preferably on the company letterhead
Your position
Your initial start date to ensure you’ve passed any probationary period
Your scheduled return to work date
Your guaranteed salary

For a lender to feel confident about your ability to cover your mortgage payments, they want to see that you have a position waiting for you once your parental leave is over. You might also be required to provide a history of your income for the past couple of years, but that is typical of mortgage financing.

Whether you intend to return to work after your parental leave is over or not, once the mortgage is in place, what you decide to do is entirely up to you. Mortgage qualification requires only that you have a position waiting for you.

If you have any questions about this or anything else mortgage-related, please connect anytime. It would be a pleasure to work with you.

Make the Most of Summer: Outdoor Project Ideas for Every Space

Thu, 10 Jul 2025 07:15:06 GMT

Summer in Canada is short—but sweet. With warm weather and long evenings, it’s the perfect time to get outside and enjoy your outdoor space, no matter how big (or small) it is. Whether you have a tiny patio or a sprawling backyard, a few creative upgrades can go a long way toward turning your space into your personal summer oasis.

Below are ideas for every type of outdoor space, from cozy balconies to large backyards!

For Patio-Only Spaces

Limited to a balcony or concrete patio? No problem! Small spaces can still offer big enjoyment.

1. Upgrade the Flooring
Add interlocking tiles to give your concrete floor a more polished look—wood grain, grass panels, or composite styles are all popular, easy-to-install options.

2. Create an Outdoor Movie Zone
Hang a pull-down screen or grab a portable stand, pair it with a mini projector, and voilà—your very own outdoor movie theatre under the stars!

3. Start an Herb Garden
Railing planters are perfect for growing basil, mint, parsley, and more. Fresh herbs at your fingertips—and they smell amazing too!

4. Add Some Twinkle
Wrap fairy lights around your railing or overhead beams to bring cozy vibes and nighttime charm.

5. Grill Like a Pro
Maximize your BBQ season with a compact baby-que. Weber’s Q Series is a great option for small spaces without compromising grilling power.

For Small Yards

A little yard can still pack a lot of personality. Here are ways to make the most of every square foot:

1. Game Time!
Add a mini putting green or an axe-throwing target (just be safe!) for quick bursts of backyard fun that don’t take up much space.

2. Warm Up Your Nights
Add a heating lamp or portable fire bowl to keep your evenings cozy well into the fall.

3. Grow Your Own Produce
Build or buy a raised garden box to grow tomatoes, cucumbers, lettuce, or other easy vegetables. Gardening is relaxing—and delicious!

4. DIY Bird Bath
Make a pedestal bird bath using an old vase, a platter, and strong glue. You likely have everything you need already at home—and the local birds will thank you!

For Big Yards

If space isn’t an issue, the sky’s the limit! Here are some larger-scale projects to take your yard to the next level:

1. Build a Catio
Yep, it’s a “cat patio”! Give your feline friends a safe way to enjoy the outdoors with a screened-in enclosure attached to your home.

2. Create a Permanent Fire Pit
Use stones and a fire ring to build a beautiful, safe fire pit. You can even add airflow cutouts to reduce smoke—perfect for those marshmallow roasts!

3. Tile a Dining Area
Install paving stones or tiles to define an outdoor dining space. Add a table, some string lights, and enjoy al fresco meals all summer long.

Need More Inspiration?

If none of these projects quite fit your vision, check out Home Depot’s DIY backyard ideas—complete with step-by-step instructions and material lists to help you bring your outdoor dreams to life.

Soak It Up While It Lasts

No matter the size of your space, there’s always something you can do to enhance your outdoor experience. So get out there, get creative, and make the most of these sunny summer days.

See you back here in August—with more tips, tricks, and homeowner insights!

Deposit Lending And Bridge Financing

Wed, 09 Jul 2025 07:45:07 GMT

Let’s say you have a home that you’ve outgrown; it’s time to make a move to something better suited to your needs and lifestyle. You have no desire to keep two properties, so selling your existing home and moving into something new (to you) is the best idea.

Ideally, when planning out how that looks, most people want to take possession of the new house before moving out of the old one. Not only does this make moving your stuff more manageable, but it also allows you to make the new home a little more “you” by painting or completing some minor renovations before moving in.

But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in.

Bridge financing allows you to bridge the financial gap between the firm sale of your current home and the purchase of your new home. Bridge financing allows you to access some of the equity in your existing property and use it for the downpayment on the property you are buying.

So now let’s also say that it’s a very competitive housing market where you’re looking to buy. Chances are you’ll want to make the best offer you can and include a significant deposit. If you don’t have immediate access to the cash in your bank account, but you do have equity in your home, a deposit loan allows you to make a very strong offer when negotiating the terms of purchasing your new home.

Now, to secure bridge financing and/or a deposit loan, you must have a firm sale on your existing home. If you don’t have a firm sale on your home, you won’t get the bridge financing or deposit loan because there is no concrete way for a lender to calculate how much equity you have available.

A firm sale is the key to securing bridge financing and a deposit loan.

So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.

How To Get A Mortgage After Bankruptcy

Wed, 02 Jul 2025 08:00:30 GMT

Sometimes life throws you a financial curveball. Bankruptcy and consumer proposals happen. It doesn’t mean your life is over, and it doesn’t mean you won’t ever qualify for a mortgage again.

The key to financial success here is getting things under control as quickly as possible. You must demonstrate to the potential lenders that what happened in the past won’t happen again in the future.

So if you’re thinking about getting a mortgage post-bankruptcy, lenders will want answers to the following questions:

How long have you been discharged?

Securing a mortgage will be dependent on how long it has been since you were discharged from your bankruptcy or consumer proposal. Most lenders consider the discharge date on both to be your new ground zero.

And while there is no legally defined waiting period for when you can apply for a new mortgage post-bankruptcy, what lenders will assess is how you’re managing your finances after your financial troubles.

Have you established new credit?

You can show lenders that they can trust you after bankruptcy by establishing new credit and managing that credit flawlessly. So as soon as you’ve been discharged, it’s a good idea to get a secured credit card and start rebuilding your credit score.

To be considered completely established, you’ll want to have two years of credit history on two trade lines with a credit limit of $2500 on each trade line. You’ll also want to make sure that you have no late or missed payments.

How much do you have available for a downpayment?

The more money you have to put towards purchasing a property, or the more equity you have in your property in the case of a refinance, the better your chances of getting a mortgage. The more money you bring to the table, the more comfortable a lender will feel about the risk they take of losing their investment should you run into future financial difficulty.

What is your total debt service ratio?

Another consideration lenders will look at is how much money you make compared to the cost of making your mortgage payments. So it probably goes without saying that the more money you make compared to the amount you want to borrow, the better.

Conventional or insured financing.

If you’re looking to get the best mortgage products available, here are some of the things a lender will want to see:

You’ve been discharged for at least two years plus a day.

You’ve established your credit (as listed above).

You have at least 5% down for the first $500k of the purchase and 10% down for anything over $500k.

If you don’t have a 20% downpayment, you will be required to secure mortgage insurance through CMHC, Sagen (formerly Genworth), or Canada Guaranty.

The cost to service the property and all your debts don’t exceed 44% of your gross income.

Alternative lending

As independent mortgage professionals, our job is to provide solutions and strategies for our clients. As such, in addition to dealing with many traditional lending institutions, we also have access to lenders who specialize in working with clients whose financial situation isn't all that straightforward. These private lenders offer alternative lending solutions that consider the overall strength of your mortgage application.

While you won’t qualify for the best rates and terms on the market by going with an alternative lender, if you’re looking for options, you might find that alternative lending is a very reasonable solution for you. Alternative lending isn’t for everyone, but it’s an excellent solution for some, especially if you’ve gone through a bankruptcy or consumer proposal and need a mortgage before fully establishing your credit.

Get in touch anytime.

So whether you’re looking for a plan to help you qualify for a mortgage with the most favourable terms or if you need something more immediate. Please connect anytime. It would be a pleasure to outline your options and work on a plan to get you a mortgage.

What You Need to Know From the CMHC 2025 Housing Market Outlook

Thu, 26 Jun 2025 03:48:06 GMT

The Canada Mortgage and Housing Corporation (CMHC) has just dropped their highly anticipated 2025 Housing

Market Outlook, and if you’re a homeowner, future buyer, or just like to keep your finger on the real estate pulse, there’s a lot to unpack.

Here’s the short version:

The Big Picture (Canada-Wide)

Mortgage rates are expected to decline in 2025, giving some long-awaited relief to buyers.
Home sales and prices are heading back up, though we’re not expecting the wild ride of 2021.
Rental markets are softening slightly with more supply coming online.
Condo construction is slowing, while purpose-built rental and ground-oriented housing hold strong.
CMHC is cautiously optimistic, but they’re also tracking risks like U.S. trade tensions and lower immigration.

What About British Columbia?

If you’re in BC, especially Greater Vancouver or Vancouver Island, here’s what matters most:

Prices are forecast to hit new highs by the end of 2025.
Sales are rebounding, thanks to lower mortgage rates and some recent financing policy changes.
Tighter inventory will drive demand in townhomes and entry-level properties.
Rental markets are finally seeing some relief, with rising vacancy rates and record rental construction underway.

Why It Matters

This isn’t just “market noise.” For buyers, sellers, renters and industry pros, these trends point to a more balanced housing environment in the next 12–18 months. That means better planning opportunities, less panic-buying, and a slightly calmer market for everyone involved.

If you’re making moves in the real estate world, or just want to understand what the data says about where we’re headed, this report is worth a closer look.

➡ Download the full 3-page PDF summary here .

Need help making sense of how this impacts your mortgage, buying power, or investment strategy?

Ask Marci About Mortgages. I’m always happy to walk you through it.

Older Canadians Have Mortgage Options

Wed, 25 Jun 2025 07:45:00 GMT

Although it’s ideal to have your mortgage paid off by the time you retire, that isn’t always possible in today’s economy. The cost of living is considerably higher than it has ever been, and as a result, many Canadians are putting off retirement, hoping to make just a bit more money to add to that nest egg.

So if you find yourself in the position where you’re considering your mortgage options into retirement, you’ve come to the right place.

The advantage of working with an independent mortgage professional instead of a single bank is choice. When you work with an independent mortgage professional, you won’t be limited to an individual institution’s products; rather, you will have access to considerably more options.

Here are some options available to older Canadians as they plan for mortgage financing through their retirement.

Standard Mortgage Financing

If you’ve got a steady income, decent credit, and equity in your home, there is no reason you shouldn’t qualify for standard mortgage financing, which usually comes at the lowest interest rates and best terms. Some lenders use pension and retirement income to support your mortgage application even if you’ve already retired.

Reverse Mortgage Financing

A reverse mortgage allows Canadian homeowners 55 years and older to borrow money from their homes with no proof of income, no credit check, and no health questions. A reverse mortgage is a fabulous mortgage solution that has helped thousands of older Canadians enhance their lifestyle.

Home Equity Line of Credit (HELOC)

A line of credit secured to the equity you have in your home is an excellent tool to allow you to access money when you need it but not pay interest if you don’t need it. Many older Canadians like the idea of rolling all their expenses and income into one account.

Private Financing

If you happen to be in a bit of a tight spot, you have a plan but need a financial solution; private financing might be the answer. Indeed not the first choice for many because of the higher interest rates. However, private financing can provide you with options where a traditional bank can’t.

If you have any questions about securing mortgage financing for your retirement, please connect anytime. It would be a pleasure to work with you and walk you through all your options.

First-Time Homebuyer? A New GST Rebate Could Put Thousands Back in Your Pocket

Fri, 20 Jun 2025 22:25:59 GMT

If you’re a first-time homebuyer eyeing a new build or major renovation, there's encouraging news that could make homeownership significantly more affordable.

The federal government has proposed a new GST rebate aimed at easing the financial burden for Canadians entering the housing market. While still awaiting parliamentary approval, the proposed legislation offers the potential for thousands in savings —and could be a game-changer for buyers trying to break into today’s high-cost housing landscape.

What’s Being Proposed?

Under the new legislation, eligible first-time homebuyers would receive:

A full GST rebate on homes priced up to $1 million
A partial GST rebate on homes between $1 million and $1.5 million

This could mean up to $50,000 in tax savings on a qualifying home—a major boost for anyone working hard to save for a down payment or meet mortgage qualification requirements.

Why This Matters

With interest rates still elevated and home prices holding steady in many regions, affordability remains a challenge. This rebate could offer meaningful relief in several ways:

Lower Upfront Costs: Removing GST from the purchase price reduces the total amount of money buyers need to save before closing.
Smaller Monthly Payments: A lower purchase price leads to a smaller mortgage, which translates to more manageable monthly payments.
Improved Mortgage Qualification: With a reduced purchase amount, buyers may find it easier to meet lender criteria.

According to recent estimates, a homebuyer purchasing a $1 million new home could see monthly mortgage payments drop by around $240 —money that could go toward savings, home improvements, or simply everyday expenses.

Helping Families Help Each Other

This proposal also offers a win for parents who are supporting their children in buying a first home. Whether through gifted down payments or co-signing, a lower purchase price and more affordable monthly costs mean that family support can go further—and set first-time buyers up for long-term success.

Is This the Right Time to Buy?

If you’re thinking about buying a new or substantially renovated home, this proposed rebate could dramatically improve your financial position. Now is the perfect time to explore your options and make sure your mortgage strategy is aligned with potential policy changes.

�� Let’s connect for a free mortgage review or pre-approval. Whether you’re buying your first home or helping someone else take that first step, I’m here to help you make informed, confident decisions.

Worried About Your Mortgage Renewal? You’re Not Alone

Wed, 18 Jun 2025 19:20:42 GMT

Worried About Your Mortgage Renewal? You’re Not Alone

If your mortgage renewal is coming up soon, you're likely feeling a bit of financial pressure—and you’re not the only one.

A recent survey shows that over half of Canadian homeowners believe their upcoming mortgage renewal could impact their current living situation. With interest rates still higher than what many borrowers locked in before 2022, 45% of those renewing in the next 12 months expect their monthly payments to increase.

Even though the Bank of Canada has held its key overnight rate steady at 2.75%, borrowing costs remain elevated compared to the low-rate years we saw earlier in the decade. And that’s changing how Canadians think about their finances.

Changing Plans and Tightening Budgets

Among those worried about their renewal, 73% say they’re already cutting back on discretionary spending—things like eating out, entertainment, or travel—to brace for higher mortgage payments.

For many, it goes deeper than just trimming the budget. Nearly one in four surveyed homeowners said they’re rethinking their entire financial strategy. Some are pressing pause on home renovations (43%), while others are considering downsizing or relocating to a more affordable area (29%). A smaller group (15%) is even open to major lifestyle changes, like moving in with roommates or relocating to a new neighbourhood altogether.

Fixed-Rate Mortgages on the Rise

In this climate, most homeowners looking to renew are leaning toward fixed-rate mortgages, with 75% preferring the stability of predictable payments. For those facing uncertainty, locking in a rate for the next few years can offer peace of mind—even if it means paying a little more in the short term.

First-Time Buyers Are Feeling It Too

It’s not just current homeowners feeling the pinch. A separate survey found that more than half of Canadians planning to buy a home are cutting back on non-essential spending to save for their down payment or other buying costs. About 31% are even considering tapping into savings or investment accounts like TFSAs, RRSPs, or first-time home savings accounts to make their purchase possible.

What This Means for You

Whether you’re preparing to renew or purchase for the first time, this environment calls for smart, strategic planning. You’re not alone in feeling uncertain—but with the right guidance, you can navigate these changes confidently.

Have questions about your upcoming renewal or wondering what type of mortgage is right for today’s market? Let’s connect. We're here to help you make informed, confident decisions about your home financing.

What You Need To Know About Online Mortgage Calculators

Wed, 18 Jun 2025 08:00:38 GMT

You’d think an online calculator is a pretty straightforward device, one that you should be able to place your confidence in, and for the most part, they are. Calculators calculate numbers. The numbers are reliable, but how you interpret those numbers, not so much, especially if the goal is mortgage qualification.

If you rely on the numbers from a “What can I afford” or “Mortgage Qualification” calculator without talking to an independent mortgage professional, you’re going to be misinformed.

Don’t be fooled. Even though an online mortgage calculator can help you calculate mortgage payments or help you assess how additional payments would impact your amortization, they’ll never be able to give you an exact picture of what you can afford and how a lender will consider your mortgage application.

While mortgage calculators are objective, mortgage lending isn’t. It’s 100% subjective. Lenders consider your financial situation, employment, credit history, assets, liabilities, the property you are looking to purchase. Then, they will compare that with whatever internal risk profile they are currently using to assess mortgage lending. Simply put, they don’t just look at the numbers.

An online calculator is a great tool to help you run different financial scenarios and help assess your comfort level with different payment schedules and mortgage amounts. However, if you rely on an online calculator for mortgage qualification purposes, you’ll be disappointed.

The first step in the mortgage qualification process is a preapproval. A preapproval will examine all the variables on your application, assess your financial situation, and provide you with a framework to buy a property based on your unique circumstance.

Securing a preapproval comes at no cost to you and without any obligation to buy. It’ll simply allow you the freedom to move ahead with confidence, knowing exactly where you stand. Something a calculator is unable to do.

Please connect anytime if you’d like to talk more about your financial situation and get a preapproval started. It would be a pleasure to work with you.

Going Through A Divorce? Protect your Credit

Wed, 11 Jun 2025 08:00:42 GMT

Divorces are challenging as there’s a lot to think about in a short amount of time, usually under pressure. And while handling finances is often at the forefront of the discussions related to the separation of assets, unfortunately, managing and maintaining personal credit can be swept aside to deal with later.

So, if you happen to be going through or preparing for a divorce or separation, here are a few considerations that will help keep your credit and finances on track. The goal is to avoid significant setbacks as you look to rebuild your life.

Manage Your Joint Debt

If you have joint debt, you are both 100% responsible for that debt, which means that even if your ex-spouse has the legal responsibility to pay the debt, if your name is on the debt, you can be held responsible for the payments. Any financial obligation with your name on the account that falls into arrears will negatively impact your credit score, regardless of who is legally responsible for making the payments. A divorce settlement doesn’t mean anything to the lender.

The last thing you want is for your ex-spouse’s poor financial management to negatively impact your credit score for the next six to seven years. Go through all your joint credit accounts, and if possible, cancel them and have the remaining balance transferred into a loan or credit card in the name of whoever will be responsible for the remaining debt.

If possible, you should eliminate all joint debts. Now, it’s a good idea to check your credit report about three to six months after making the changes to ensure everything all joint debts have been closed and everything is reporting as it should be. It’s not uncommon for there to be errors on credit reports.

Manage Your Bank Accounts

Just as you should separate all your joint credit accounts, it’s a good idea to open a checking account in your name and start making all deposits there as soon as possible. You’ll want to set up the automatic withdrawals for the expenses and utilities you’ll be responsible for going forward in your own account.

At the same time, you’ll want to close any joint bank accounts you have with your ex-spouse and gain exclusive access to any assets you have. It’s unfortunate, but even in the most amicable situations, money (or lack thereof) can cause people to make bad decisions; you want to protect yourself by protecting your assets.

While opening new accounts, chances are your ex-spouse knows your passwords to online banking and might even know the pin to your bank card. Take this time to change all your passwords to something completely new, don’t just default to what you’ve used in the past. Better safe than sorry.

Setup New Credit in Your Name

There might be a chance that you’ve never had credit in your name alone or that you were a secondary signer on your ex-spouse’s credit card. If this is the case, it would be prudent to set up a small credit card in your name. Don’t worry about the limit; the goal is to get something in your name alone. Down the road, you can change things and work towards establishing a solid credit profile.

If you have any questions about managing your credit through a divorce, please don’t hesitate to connect anytime. It would be a pleasure to work with you.

Bank of Canada Rate Announcement Jun 4th, 2025

Wed, 04 Jun 2025 14:45:50 GMT

Bank of Canada holds policy rate at 2¾%.

FOR IMMEDIATE RELEASE

June 4, 2025

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.

Since the April Monetary Policy Report, the US administration has continued to increase and decrease various tariffs. China and the United States have stepped back from extremely high tariffs and bilateral trade negotiations have begun with a number of countries. However, the outcomes of these negotiations are highly uncertain, tariff rates are well above their levels at the beginning of 2025, and new trade actions are still being threatened. Uncertainty remains high.

While the global economy has shown resilience in recent months, this partly reflects a temporary surge in activity to get ahead of tariffs. In the United States, domestic demand remained relatively strong but higher imports pulled down first-quarter GDP. US inflation has ticked down but remains above 2%, with the price effects of tariffs still to come. In Europe, economic growth has been supported by exports, while defence spending is set to increase. China’s economy has slowed as the effects of past fiscal support fade. More recently, high tariffs have begun to curtail Chinese exports to the US. Since the financial market turmoil in April, risk assets have largely recovered and volatility has diminished, although markets remain sensitive to US policy announcements. Oil prices have fluctuated but remain close to their levels at the time of the April MPR.

In Canada, economic growth in the first quarter came in at 2.2%, slightly stronger than the Bank had forecast, while the composition of GDP growth was largely as expected. The pull-forward of exports to the United States and inventory accumulation boosted activity, with final domestic demand roughly flat. Strong spending on machinery and equipment held up growth in business investment by more than expected. Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite a large drop in consumer confidence. Housing activity was down, driven by a sharp contraction in resales. Government spending also declined. The labour market has weakened, particularly in trade-intensive sectors, and unemployment has risen to 6.9%. The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued.

CPI inflation eased to 1.7% in April, as the elimination of the federal consumer carbon tax reduced inflation by 0.6 percentage points. Excluding taxes, inflation rose 2.3% in April, slightly stronger than the Bank had expected. The Bank’s preferred measures of core inflation, as well as other measures of underlying inflation, moved up. Recent surveys indicate that households continue to expect that tariffs will raise prices and many businesses say they intend to pass on the costs of higher tariffs. The Bank will be watching all these indicators closely to gauge how inflationary pressures are evolving.

With uncertainty about US tariffs still high, the Canadian economy softer but not sharply weaker, and some unexpected firmness in recent inflation data, Governing Council decided to hold the policy rate as we gain more information on US trade policy and its impacts. We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.

Governing Council is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases are passed on to consumer prices; and how inflation expectations evolve.

Information note

The next scheduled date for announcing the overnight rate target is July 30, 2025. The Bank will publish its next MPR at the same time.

Can Foreign Buyers Still Purchase Property in BC

Mon, 02 Jun 2025 16:42:24 GMT

If you’re new to Canada, on a work permit, or simply curious about buying a home in British Columbia as a non-resident, you may have heard some conflicting info. Between federal bans and provincial taxes, it can feel like a maze.

Let’s break it down – simply and clearly – so you know what’s actually possible.

�� The Federal Ban on Foreign Buyers (Until 2027)

In early 2023, the Canadian government introduced a two-year ban on foreign nationals purchasing residential real estate. In 2024, that ban was extended until January 1, 2027 .

❗ Who’s affected:

Foreign nationals who are not Canadian citizens or permanent residents
Corporations and entities based outside of Canada

✅ Who’s exempt and can still buy:

People on valid work permits (183+ days remaining at time of purchase)
Certain international students (who’ve filed 5+ years of Canadian tax returns and are buying under $500K)
Refugees or protected persons
Those buying jointly with a Canadian spouse or partner

�� Important : Even if you’re allowed to buy under federal rules, there are still provincial taxes to consider.

The B.C. Foreign Buyer Tax (a.k.a. the Additional Property Transfer Tax)

If you’re a foreign buyer and you’re purchasing property in designated parts of B.C. (including Metro Vancouver, Victoria, Fraser Valley, Kelowna, and Nanaimo), you’ll pay an extra 20% on top of the home’s price.

Example:

Buying a $1.2 million home as a non-exempt foreign buyer?

Standard B.C. Property Transfer Tax: $22,000
Additional 20% Tax : $240,000
Total in taxes : $262,000
�� Yep – that adds up fast.

How to avoid the 20%:

You may be exempt if:

You’re a B.C. Provincial Nominee Program (PNP) participant buying your primary residence
You’re a Canadian citizen or permanent resident
You qualify for certain refunds after becoming a permanent resident within a year

What Should You Do?

If you’re on a work permit or navigating immigration pathways – you may still be able to buy , but it’s critical to understand the rules and the costs.

As a mortgage broker, I’ve helped many newcomers figure out:

If they’re eligible to buy
What taxes apply (and how to reduce them!)
What mortgage options are available

Want the Full Breakdown?

I’ve created a free, downloadable one-page Foreign Buyer Reference Guide with a full tax breakdown and clear examples.
�� [Click here to download it now]

Have questions about whether you can buy property in B.C.? Let’s chat.

Ask Marci About Mortgages.
✅Honest advice. ✅ Clear answers. ✅ No confusion.

Big News for First-Time Home Buyers: GST Relief Is Here!

Wed, 28 May 2025 21:06:05 GMT

Buying your first home just got a little easier — and a lot less expensive — thanks to a major new government announcement made on May 27, 2025. If you're thinking about purchasing a newly built home or condo, here's what you need to know (in plain English).

What’s the Big Change?

The Government of Canada is introducing a new GST rebate just for First-Time Home Buyers (FTHB) :

100% GST rebate on new homes up to $1 million
A partial GST rebate for homes between $1 million and $1.5 million
No rebate for homes priced $1.5 million or more

�� Translation: You could save up to $50,000 in taxes on a new build — serious money back in your pocket!

What Types of Homes Qualify?

The rebate applies to:

New homes or condos purchased from a builder
Owner-built homes (yep, if you're building yourself!)
Co-op housing units (if you're buying shares in a housing co-op)

Who Qualifies as a First-Time Buyer?

You’re considered a First-Time Home Buyer if:

You're 18 or older
A Canadian citizen or permanent resident
You (or your spouse/common-law partner) haven’t owned a home in the last 4 years — anywhere in the world

When Does This Start?

To qualify, your purchase contract signed or construction must start on or after May 27, 2025 , and:

Construction must begin before 2031
Homes must be substantially completed before 2036
Buyers with contracts signed prior to May 27, 2025 will NOT qualify

Some Fine Print You Should Know

There are a few limits:

You can only claim this once in your lifetime
If your spouse or partner already used it , you can’t
You won’t qualify if the original agreement to buy was signed before May 27, 2025 (Yes, I already said that but it bears repeating!!)
It must be your primary residence

Why This Is a Game Changer

Let’s be real — saving up for a home is hard enough , especially in today’s market. This new GST rebate is a massive win for first-time buyers and a big push to get more homes built across Canada.

✔️ Less tax
✔️ More homes
✔️ A major step toward affordable ownership

�� Want the Full Details?

You can read the full government announcement right here .

Need help understanding this or to get pre-approved, I am here to help. marci@askmarci.ca

How Employment Status Impacts Your Mortgage Application

Wed, 28 May 2025 07:45:11 GMT

Chances are if you’re applying for a mortgage, you feel confident about the state of your current employment or your ability to find a similar position if you need to. However, your actual employment status probably means more to the lender than you might think. You see, to a lender, your employment status is a strong indicator of your employer’s commitment to your continued employment.

So, regardless of how you feel about your position, it’s what can be proven on paper that matters most. Let’s walk through some of the common ways lenders can look at employment status.

Permanent Employment

The gold star of employment. If your employer has made you a permanent employee, it means that your position is as secure as any position can be. When a lender sees permanent status (passed probation), it gives them the confidence that you’re valuable to the company and that they can rely on your income.

Probationary Period

Despite the quality of your job, if you’ve only been with the company for a short while, you’ll be required to prove that you’ve passed any probationary period. Although most probationary periods are typically 3-6 months, they can be longer. You might now even be aware that you’re under probation.

The lender will want to make sure that you’re not under a probationary period because your employment can be terminated without any cause while under probation. Once you’ve made it through your initial evaluation, the lender will be more confident in your employment status.

Now, it’s not the length of time with the employer that the lender is scrutinizing; instead, it’s the status of your probation. So if you’ve only been with a company for one month, but you’ve been working with them as a contractor for a few years, and they’re willing to waive the probationary period based on a previous relationship, that should give the lender all the confidence they need. We’ll have to get that documented.

Parental Leave

Suppose you’re currently on, planning to be on, or just about to be done a parental leave, regardless of the income you’re now collecting, as long as you have an employment letter that outlines your guaranteed return to work position (and date). In that case, you can use your return to work income to qualify on your mortgage application. It’s not the parental leave that the lender has issues with; it’s the ability you have to return to the position you left.

Term Contracts

Term contracts are hands down the most ambiguous and misunderstood employment status as it’s usually well-qualified and educated individuals who are working excellent jobs with no documented proof of future employment.

A term contract indicates that you have a start date and an end date, and you are paid a specific amount for that specified amount of time. Unfortunately, the lack of stability here is not a lot for a lender to go on when evaluating your long-term ability to repay your mortgage.

So to qualify income on a term contract, you want to establish the income you’ve received for at least two years. However, sometimes lenders like to see that your contract has been renewed at least once before considering it as income towards your mortgage application.

In summary

If you’ve recently changed jobs or are thinking about making a career change, and qualifying for a mortgage is on the horizon, or if you have any questions at all, please connect anytime. We can work through the details together and make sure you have a plan in place. It would be a pleasure to work with you!

Is There A Difference Between A Deposit And Downpayment

Wed, 21 May 2025 08:00:07 GMT

If you’re new to the home buying process, it’s easy to get confused by some of the terms used. The purpose of this article is to clear up any confusion between the deposit and downpayment.

What is a deposit?

The deposit is the money included with a purchase contract as a sign of good faith when you offer to purchase a property. It’s the “consideration” that helps make up the contract and binds you to the agreement.

Typically, you include a certified cheque or a bank draft that your real estate brokerage holds while negotiations are finalized when you offer to purchase a property. If your offer is accepted, your deposit is held in your Realtor’s trust account.

If your offer is accepted and you commit to buying the property, your deposit is transferred to the lawyer’s trust account and included in your downpayment. If you aren’t able to reach an agreement, the deposit is refunded to you. However, if you commit to buying the property and don’t complete the transaction, your deposit could be forfeit to the seller.

Your deposit goes ahead of the downpayment but makes up part of the downpayment.

A larger deposit may give you a better chance of having your offer accepted in a competitive situation. It also puts you on the hook for more if something changes down the line and you cannot complete the purchase.

What is a downpayment?

Your downpayment refers to the initial payment you make when buying a property through mortgage financing.

In Canada, the minimum downpayment amount is 5%, as lenders can only lend up to 95% of the property’s value. Securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. You can source your downpayment from your resources, the sale of a property, an RRSP, a gift from a family member, or borrowed funds.

Example scenario

Let’s say that you are looking to purchase a property worth $400k. You’re planning on making a downpayment of 10% or $40k. When you make the initial offer to buy the property, you put forward $10k as a deposit your real estate brokerage holds in their trust account. If everything checks out with the home inspection and you’re satisfied with financing, you can remove all conditions. Your $10k deposit is transferred to the lawyer’s trust account, where will add the remaining $30k for the downpayment.

With your $40k downpayment made, once you sign the mortgage documents and cover the legal and closing costs, the lender will forward the remaining 90% in the form of a mortgage registered to your title, and you have officially purchased the property!

If you have any questions about the difference between the deposit and the downpayment or any other mortgage terms, please connect anytime. It would be a pleasure to work with you.

RRSP As A Downpayment

Wed, 14 May 2025 08:00:37 GMT

Did you know there’s a program that allows you to use your RRSP to help come up with your downpayment to buy a home? It’s called the Home Buyer’s Plan (or HBP for short), and it’s made possible by the government of Canada. While the program is pretty straightforward, there are a few things you need to know.

Your first home (with some exceptions)

To qualify, you need to be buying your first home. However, when you look into the fine print, you find that technically, you must not have owned a home in the last four years or have lived in a house that your spouse owned in the previous four years.

Another exception is for those with a disability or those helping someone with a disability. In this case, you can withdraw from an RRSP for a home purchase at any time.

You have to pay back the RRSP

You have 15 years to pay back the RRSP, and you start the second year after the withdrawal. While you won’t pay any tax on this particular withdrawal, it does come with some conditions. You’ll have to pay back the total amount you withdrew over 15 years.

The CRA will send you an HBP Statement of Account every year to advise how much you owe the RRSP that year. Your repayments will not count as contributions as you’ve already received the tax break from those funds.

Access to funds

The funds you withdraw from the RRSP must have been there for at least 90 days. You can still technically withdraw the money from your RRSP and use it for your down-payment, but it won’t be tax-deductible and won’t be part of the HBP.

You can access up to $35,000 individually or $70,00 per couple through the HBP.

Please connect anytime if you’d like to know more about the HBP and how it could work for you as you plan your downpayment. It would be a pleasure to work with you.

Selling Your Property? Let's Talk

Wed, 07 May 2025 07:45:15 GMT

If you’ve been thinking about selling your existing property, for whatever reason, it would be in your best interest to connect with an independent mortgage professional before calling your real estate agent or listing it yourself.

And while talking with your mortgage professional might not sound like the most logical place to start, here are a few scenarios that explain why it makes the most sense.

If you’re buying a new property

If you’re selling your property, chances are, you’ll have to move somewhere! So, if you plan on buying a new property using the equity from the sale of your existing property, chances are you’ll need a new mortgage.

Don’t assume that just because you’ve secured mortgage financing before, that you’ll qualify again. Mortgage rules are constantly changing; make sure you have a pre-approval in place before you list your property.

Also, by connecting with a mortgage professional first, you can look into your existing mortgage terms. You might be able to port your mortgage instead of getting a new one, which could save you some money.

If you’re not buying a new property

Even if you aren’t buying a new property and want to sell your existing property, it’s still a good idea to connect with a mortgage professional first, as we can look at the cost of breaking your mortgage together.

Unless you have an open mortgage, or a line of credit, there will be a penalty to break your mortgage. The goal is to work on a plan to minimize your penalty. Because of how mortgage penalties work, sometimes it’s just a matter of waiting a few months to save thousands. You'll never know unless you take a look at the details.

Marital breakdown

The simple truth is that marriages break down. When that happens, often, people want closure, and unfortunately, they make decisions without really thinking them through or seeing the full picture. So, instead of simply selling the family home because that feels like the only option, please know that special programs exist that allow one party to buy out the former spouse. The key here is to have a legal separation agreement is in place.

If you’d like to discuss the sale of your property and your plans for the future, connect anytime. It would be a pleasure to work with you!

Options For Your Downpayment

Wed, 30 Apr 2025 07:45:09 GMT

Your downpayment refers to the initial payment you make when buying a property through mortgage financing. A downpayment is always required when purchasing, because in Canada, lenders are only allowed to lend up to 95% of the property value, leaving you with the need to come up with at least 5% for a downpayment.

In fact, securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. Canada has three default insurance providers: the Canadian Mortgage and Housing Corporation (CMHC), Sagen (formerly Genworth Canada), and Canada Guaranty. There is a cost for default insurance which is usually rolled into the total mortgage amount and is tiered depending on how much you put down.

As your downpayment can be a significant amount of money, you probably need a plan to put this money together. So, let’s take a look at some of the options you have to come up with a downpayment.

Money from your resources

If you’ve been saving money and have accumulated the funds and set them aside for to use for your downpayment, you'll need to prove a 90-day history of those funds. As far as the lender is concerned, this is the most straightforward way to prove a downpayment.

Any large deposits to your bank account that aren’t from payroll will require you to prove the source of funds. For example, if you recently sold a vehicle, you’ll need to provide the paperwork as proof of ownership, which corresponds to your account’s deposit. Or, if you have funds in an investment account that you’ve transferred over, statements of that transfer or account would suffice.

You have to prove the source of your downpayment funds to the lender when qualifying for a mortgage to help prevent money laundering.

Funds from the sale of another property

If you’ve recently sold a property and you’re using the proceeds of that sale as the downpayment from your new purchase, you can provide the paperwork from that transaction to substantiate your downpayment.

RRSPs through the Home Buyer’s Plan

Okay, so let’s say you don’t have all the money set aside in your savings, but you do have cash in your RRSP. Assuming you’re a first-time homebuyer, you can access the funds from your RRSP Tax-Free to use as a downpayment.

You’re able to access up to $35k individually or $70k as a couple. The money has to be paid back over the next 15 years. If you’d like more information on what this program looks like, please get in touch.

Gifted downpayment

Now, if you don’t have enough money in your savings, but you have a family member who is willing to help, they can gift you funds for your downpayment. With the increased cost of living, making it harder to save for a downpayment, receiving a gift from a family member is becoming increasingly commonplace.

Now, to qualify, the gift has to come from an immediate family member who will sign a gift letter indicating there is no schedule of repayment and that the gift doesn’t have to be repaid. Proof that the money has been deposited into your account is required through bank statements.

Gifted funds can make up part of or the entire amount of downpayment. For example, if you purchase a property for $300k and have $10k saved up, your parents can gift you the remaining $5k to make up the total 5% downpayment.

Borrowed downpayment

Suppose you aren’t fortunate enough to have a family member who can gift you a downpayment, but you have excellent credit and a high income compared to the amount you’re looking to borrow. In that case, you might qualify to borrow part or all of your downpayment.

It’s possible to borrow your downpayment as long as you include the payments in your debt service ratios. Typically this is 3% of the outstanding balance.

So there you have it, to qualify for a mortgage, you’ll need to come up with a downpayment. That can be through your resources, a property you sold, an RRSP, a gift from a family member, borrowed funds, or a combination of all five sources.

If you’d like to discuss your downpayment or anything else related to mortgage financing; it’s never too early to start the conversation about getting pre-approved for a mortgage. Please connect anytime. It would be a pleasure to work with you!

Paying Off Your Mortgage As Quickly As Possible

Wed, 23 Apr 2025 10:03:00 GMT

Being a home owner is excellent, having a huge mortgage isn’t. So, if you have a mortgage that you’re looking to get rid of as quickly as possible, here are four things you should consider doing.

Accelerate your payments

Making the change from monthly payments to accelerated bi-weekly payments is one of the easiest ways you can make a difference to the bottom line of your mortgage. Most people don’t even notice the difference or increased payment.

A traditional mortgage with monthly payments splits the amount owing annually into 12 equal payments. Accelerated biweekly is simply taking a regular monthly payment and dividing it in two, but instead of making 24 payments, you make 26. The extra two payments accelerate the paying down of your mortgage.

Increase your regular mortgage payments

Chances are, depending on the terms of your existing mortgage, you can increase your regular mortgage payment by 10-25%. Alternatively, some lenders even offer the ability to double-up your mortgage payments. These are great options as any additional payments will be applied directly to the principal amount owing on your mortgage instead of a prepayment of interest.

Make a lump-sum payment

Depending on your lender and your mortgage product, you should be able to put down anywhere from 10-25% of the original mortgage balance in a bulk payment. Some lenders are particular about when you can make these payments; however, you should be eligible if you haven’t taken advantage of a lump sum payment yet this year.

Making a lump-sum payment is a great option if you’ve come into some money and you’d like to apply it to your mortgage. As this will lower your principal amount owing on the mortgage, it will reduce the amount of interest charged over the life of the mortgage.

Review your options regularly

As your mortgage payments debit from your bank account directly, it’s easy to put your mortgage on auto-pilot and not think twice about it until your term is up for renewal. Unfortunately, this removes you from the driver's seat and doesn’t allow you to make informed decisions about your mortgage or keep up to date with market conditions.

So let’s talk about an annual mortgage review. Working through an annual mortgage review with an independent mortgage professional is beneficial as there may be opportunities to refinance your mortgage and lower your overall cost of borrowing. By reviewing your mortgage at least once a year, you can be sure that you’ve always got the best mortgage for you! There is no cost involved here, just a quick assessment and peace of mind.

If you’ve got questions about your existing mortgage or want to compare your mortgage to options available today, please connect anytime. It would be a pleasure to work with you.

Bank of Canada Rate Announcement Apr 16th, 2025

Wed, 16 Apr 2025 14:12:32 GMT

Bank of Canada holds policy rate at 2¾%.

FOR IMMEDIATE RELEASE

Read the April 16th, 2025 Monetary Report

April 16, 2025

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.

The major shift in direction of US trade policy and the unpredictability of tariffs have increased uncertainty, diminished prospects for economic growth, and raised inflation expectations. Pervasive uncertainty makes it unusually challenging to project GDP growth and inflation in Canada and globally. Instead, the April Monetary Policy Report (MPR) presents two scenarios that explore different paths for US trade policy. In the first scenario, uncertainty is high but tariffs are limited in scope. Canadian growth weakens temporarily and inflation remains around the 2% target. In the second scenario, a protracted trade war causes Canada’s economy to fall into recession this year and inflation rises temporarily above 3% next year. Many other trade policy scenarios are possible. There is also an unusual degree of uncertainty about the economic outcomes within any scenario, since the magnitude and speed of the shift in US trade policy are unprecedented.

Global economic growth was solid in late 2024 and inflation has been easing towards central bank targets. However, tariffs and uncertainty have weakened the outlook. In the United States, the economy is showing signs of slowing amid rising policy uncertainty and rapidly deteriorating sentiment, while inflation expectations have risen. In the euro area, growth has been modest in early 2025, with continued weakness in the manufacturing sector. China’s economy was strong at the end of 2024 but more recent data shows it slowing modestly.

Financial markets have been roiled by serial tariff announcements, postponements and continued threats of escalation. This extreme market volatility is adding to uncertainty. Oil prices have declined substantially since January, mainly reflecting weaker prospects for global growth. Canada’s exchange rate has recently appreciated as a result of broad US dollar weakness.

In Canada, the economy is slowing as tariff announcements and uncertainty pull down consumer and business confidence. Consumption, residential investment and business spending all look to have weakened in the first quarter. Trade tensions are also disrupting recovery in the labour market. Employment declined in March and businesses are reporting plans to slow their hiring. Wage growth continues to show signs of moderation.

Inflation was 2.3% in March, lower than in February but still higher than 1.8% at the time of the January MPR. The higher inflation in the last couple of months reflects some rebound in goods price inflation and the end of the temporary suspension of the GST/HST. Starting in April, CPI inflation will be pulled down for one year by the removal of the consumer carbon tax. Lower global oil prices will also dampen inflation in the near term. However, we expect tariffs and supply chain disruptions to push up some prices. How much upward pressure this puts on inflation will depend on the evolution of tariffs and how quickly businesses pass on higher costs to consumers. Short-term inflation expectations have moved up, as businesses and consumers anticipate higher costs from trade conflict and supply disruptions. Longer term inflation expectations are little changed.

Governing Council will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs. Our focus will be on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. This means we will support economic growth while ensuring that inflation remains well controlled.

Governing Council will proceed carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases are passed on to consumer prices; and how inflation expectations evolve.

Monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war. What it can and must do is maintain price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is June 4, 2025. The Bank will publish its next MPR on July 30, 2025.

Market Update: Navigating Economic Uncertainty in BC's Housing Market

Mon, 14 Apr 2025 19:06:36 GMT

Market Update: Navigating Economic Uncertainty in BC's Housing Market

Economic Outlook from Brendan Ogmundson, CMBA-BC Conference

(Following is a summary of my notes taken during Brendan’s live presentation on Tuesday April 8, 2025)

The current economic landscape is characterized by unprecedented uncertainty, according to economist Brendan Ogmundson's recent presentation at the CMBA-BC Conference. His analysis, titled "Stuck Between Stations," highlights several key factors influencing BC's housing market and broader economic outlook.

Housing Market Trends

Uncertainty has reached record highs—exceeding even 2020 levels—with a striking 600% increase in Canadians reporting concerns about job security. This uncertainty is directly impacting housing market decisions, particularly home buying intentions.

The housing inventory situation is evolving rapidly:

Listings are accumulating steadily
Total active listings across the province are approaching 40,000-45,000 units
Completed but unsold new inventory has reached an all-time high

These inventory trends are expected to slow housing starts over the next 1-2 years. Current forecasts suggest housing prices will likely remain flat or potentially decrease in the near term.

Financial Stability

Despite these challenges, BC homeowners appear to be weathering the economic storm relatively well for now. Mortgage arrears and bankruptcies remain at historically low levels, though this represents an ongoing risk worth monitoring.

Interest Rate Outlook

The bond market continues to experience significant volatility, which is likely to persist in the coming weeks. As a result, lenders are expected to maintain current fixed rate offerings. The Bank of Canada is anticipated to implement one more rate cut, though timing remains uncertain due to inflation concerns related to emerging trade tensions.

Ogmundson noted that substantial rate cuts would require a dramatic increase in unemployment—to approximately 8%—which is not the current baseline expectation. Additionally, slowing population growth combined with already poor productivity metrics is expected to reduce Canada's potential GDP growth from 2% to 1.5%.

These factors may lead to a new neutral interest rate around 2.25%, with the April Monetary Policy Report potentially confirming a lowered neutral rate.

Trade Tensions and Tariffs

A significant portion of the presentation addressed the impact of escalating trade tensions, particularly with China. The effective tariff rate with China has now exceeded 40%, creating mechanical price increases throughout supply chains.

These tariffs are projected to:

Lower economic growth
Increase prices by at least 2.3%
Reduce disposable income by approximately $3,000 per US household

The presentation characterized the potential economic contraction as a "Trumpcession," noting that recent trade policies resemble 18th-century mercantilism with its zero-sum mentality of maximizing exports while minimizing imports.

Impact on British Columbia

The effects of these economic headwinds will not be uniform across BC, with northern regions potentially facing greater challenges. Economic modeling suggests provincial unemployment could rise above 7%, compared to a baseline of 5% without trade tensions.

As we continue to monitor these economic developments, maintaining flexibility and caution in financial and investment decisions will be crucial in navigating this period of heightened uncertainty.

Mortgage Financing Explained

Wed, 09 Apr 2025 07:45:00 GMT

If you’re like most Canadians, chances are you don’t have enough money in the bank to buy a property outright. So, you need a mortgage. When you’re ready, it would be a pleasure to help you assess and secure the best mortgage available. But until then, here’s some information on what to consider when selecting the best mortgage to lower your overall cost of borrowing.

When getting a mortgage, the property you own is held as collateral and interest is charged on the money you’ve borrowed. Your mortgage will be paid back over a defined period of time, usually 25 years; this is called amortization. Your amortization is then broken into terms that outline the interest cost varying in length from 6 months to 10 years. From there, each mortgage will have a list of features that outline the terms of the mortgage.

When assessing the suitability of a mortgage, your number one goal should be to keep your cost of borrowing as low as possible. And contrary to conventional wisdom, this doesn’t always mean choosing the mortgage with the lowest rate. It means thinking through your financial and life situation and choosing the mortgage that best suits your needs.

Choosing a mortgage with a low rate is a part of lowering your borrowing costs, but it’s certainly not the only factor. There are many other factors to consider; here are a few of them:

How long do you anticipate living in the property? This will help you decide on an appropriate term.
Do you plan on moving for work, or do you need the flexibility to move in the future? This could help you decide if portability is important to you.
What does the prepayment penalty look like if you have to break your term? This is probably the biggest factor in lowering your overall cost of borrowing.
How is the lender’s interest rate differential calculated, what figures do they use? This is very tough to figure out on your own. Get help.
What are the prepayment privileges? If you’d like to pay down your mortgage faster.
How is the mortgage registered on the title? This could impact your ability to switch to another lender upon renewal without incurring new legal costs, or it could mean increased flexibility down the line.
Should you consider a fixed rate, variable rate, HELOC, or a reverse mortgage? There are many different types of mortgages; each has its own pros and cons.
What is the size of your downpayment? Coming up with more money down might lower (or eliminate) mortgage insurance premiums, saving you thousands of dollars.

So again, while the interest rate is important, it’s certainly not the only consideration when assessing the suitability of a mortgage. Obviously, the conversation is so much more than just the lowest rate. The best advice is to work with an independent mortgage professional who has your best interest in mind and knows exactly how to keep your cost of borrowing as low as possible.

You will often find that mortgages with the rock bottom, lowest rates, can have potential hidden costs built in to the mortgage terms that will cost you a lot of money down the road. Sure, a rate that is 0.10% lower could save you a few dollars a month in payments, but if the mortgage is restrictive, breaking the mortgage halfway through the term could cost you thousands or tens of thousands of dollars. Which obviously negates any interest saved in going with a lower rate.

It would be a pleasure to walk you through the fine print of mortgage financing to ensure you can secure the best mortgage with the lowest overall cost of borrowing, given your financial and life situation. Please connect anytime!

What You Need To Know About Co-Signing A Mortgage

Wed, 02 Apr 2025 07:45:02 GMT

So you’re thinking about co-signing on a mortgage? Great, let’s talk about what that looks like. Although it’s nice to be in a position to help someone qualify for a mortgage, it’s not a decision that you should make lightly. Co-signing a mortgage could have a significant impact on your financial future. Here are some things to consider.

You’re fully responsible for the mortgage.

Regardless if you’re the principal borrower, co-borrower, or co-signor, if your name is on the mortgage, you are 100% responsible for the debt of the mortgage. Although the term co-signor makes it sound like you’re somehow removed from the actual mortgage, you have all the same legal obligations as everyone else on the mortgage. When you co-sign for a mortgage, you guarantee that the mortgage payments will be made, even if you aren’t the one making them.

So, if the primary applicant cannot make the payments for whatever reason, you’ll be expected to make them on their behalf. If payments aren’t made, and the mortgage goes into default, the lender will take legal action. This could negatively impact your credit score. So it’s an excellent idea to make sure you trust the primary applicant or have a way to monitor that payments are, in fact, being made so that you don’t end up in a bad financial situation.

You’re on the mortgage until they can qualify to remove you.

Once the initial mortgage term has been completed, you won’t be automatically removed from the mortgage. The primary applicant will have to make a new application in their own name and qualify for the mortgage on their own merit. If they don’t qualify, you’ll be kept on the mortgage for the next term.

So before co-signing, it’s a good idea to discuss how long you can expect your name will be on the mortgage. Having a clear and open conversation with the primary applicant and your independent mortgage professional will help outline expectations.

Co-signing a mortgage impacts your debt service ratio.

When you co-sign for a mortgage, all of the debt of the co-signed mortgage is counted in your debt service ratios. This means that if you’re looking to qualify for another mortgage in the future, you’ll have to include the payments of the co-signed mortgage in those calculations, even though you aren’t the one making the payments directly.

As this could significantly impact the amount you could borrow in the future, before you co-sign a mortgage, you’ll want to assess your financial future and decide if co-signing makes sense.

Co-signing a mortgage means helping someone get ahead.

While there are certainly things to consider when agreeing to co-sign on a mortgage application, chances are, by being a co-signor, you'll be helping someone you care for get ahead in life. The key to co-signing well is to outline expectations and over-communicate through the mortgage process.

If you have any questions about co-signing on a mortgage or about the mortgage application process in general, please connect anytime. It would be a pleasure to work with you.

Get Protection From A Pre-Approval

Wed, 26 Mar 2025 07:45:00 GMT

There is no doubt about it, buying a home can be an emotional experience. Especially in a competitive housing market where you feel compelled to bid over the asking price to have a shot at getting into the market.

Buying a home is a game of balancing needs and wants while being honest with yourself about those very needs and wants. It’s hard to get it right, figuring out what’s negotiable and what isn’t, what you can live with and what you can’t live without.

Finding that balance between what makes sense in your head and what feels right in your heart is challenging. And the further you are in the process, the more desperate you may feel.

One of the biggest mistakes you can make when shopping for a property is to fall in love with something you can’t afford. Doing this almost certainly guarantees that nothing else will compare, and you will inevitably find yourself “settling” for something that is actually quite nice. Something that would have been perfect had you not already fallen in love with something out of your price range.

So before you ever look at a property, you should know exactly what you can qualify for so that you can shop within a set price range and you won’t be disappointed.

Protect yourself with a mortgage pre-approval. A pre-approval does a few things

It will outline your buying power. You will be able to shop with confidence, knowing exactly how much you can spend.

It will uncover any issues that might arise in qualifying for a mortgage, for example, mistakes on your credit bureau.

It will outline the necessary supporting documentation required to get a mortgage so you can be prepared.

It will secure a rate for 30 to 120 days, depending on your mortgage product.

It will save your heart from the pain of falling in love with something you can’t afford.

Obviously, there is nothing wrong with looking at all types of property and getting a good handle on the market; however, a pre-approval will protect you from believing you can qualify for more than you can actually afford.

Get a pre-approval before you start shopping; your heart will thank you.

If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Deciphering the Latest Housing Affordability Initiatives in Canada

Wed, 19 Mar 2025 07:45:00 GMT

In recent years, housing affordability has become a significant concern for many Canadians, particularly for first-time homebuyers facing soaring prices and strict mortgage qualification criteria. To address these challenges, the Canadian government has introduced several housing affordability measures. In this blog post, we'll examine these measures and their potential implications for homebuyers.

Increased Home Buyer's Plan (HBP) Withdrawal Limit

Effective April 16, the Home Buyer's Plan (HBP) withdrawal limit will be raised from $35,000 to $60,000. The HBP allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use towards a down payment on a home. By increasing the withdrawal limit, the government aims to provide young Canadians with more flexibility in saving for their down payments, recognizing the growing challenges of entering the housing market.

Extended Repayment Period for HBP Withdrawals

In addition to increasing the withdrawal limit, the government has extended the repayment period for HBP withdrawals. Individuals who made withdrawals between January 1, 2022, and December 31, 2025, will now have five years instead of two to begin repayment. This extension provides borrowers with more time to manage their finances and repay the withdrawn amounts, alleviating some of the immediate financial pressures associated with using RRSP funds for a down payment.

30-Year Mortgage Amortizations for Newly Built Homes

Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. This change extends the maximum mortgage repayment period from 25 years to 30 years, resulting in lower monthly mortgage payments. By offering longer amortization periods, the government aims to increase affordability and assist homebuyers in managing their housing expenses more effectively.

Changes to the Canadian Mortgage Charter

The government has also introduced changes to the Canadian Mortgage Charter to provide relief to homeowners facing financial challenges. These changes include early mortgage renewal notifications and permanent amortization relief for eligible homeowners. By implementing these measures, the government seeks to support homeowners in maintaining affordable mortgage payments and mitigating the risk of default during times of financial hardship.

The recent housing affordability measures announced by the Canadian government are aimed at addressing the challenges faced by homebuyers in today's market. These measures include increasing withdrawal limits, extending repayment periods, and offering longer mortgage amortizations. The goal is to make homeownership more accessible and affordable for Canadians across the country.

As these measures come into effect, it's crucial for homebuyers to stay informed about the changes and their implications. Consulting with a mortgage professional can help individuals explore their options and make informed decisions about their housing finances.

If you're interested in learning more about these changes and how they may affect you, please don't hesitate to connect with us. We're here to walk you through the process and help you consider all your options and find the one that makes the most sense for you.

Bank of Canada Rate Announcement Mar 12th, 2025

Wed, 12 Mar 2025 14:21:54 GMT

Bank of Canada reduces policy rate by 25 basis points to 2¾%

FOR IMMEDIATE RELEASE

March 12, 2025

The Bank of Canada today reduced its target for the overnight rate to 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.

The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth. However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape.

After a period of solid growth, the US economy looks to have slowed in recent months. US inflation remains slightly above target. Economic growth in the euro zone was modest in late 2024. China’s economy has posted strong gains, supported by government policies. Equity prices have fallen and bond yields have eased on market expectations of weaker North American growth. Oil prices have been volatile and are trading below the assumptions in the Bank’s January Monetary Policy Report (MPR). The Canadian dollar is broadly unchanged against the US dollar but weaker against other currencies.

Canada’s economy grew by 2.6% in the fourth quarter of 2024 following upwardly revised growth of 2.2% in the third quarter. This growth path is stronger than was expected at the time of the January MPR. Past cuts to interest rates have boosted economic activity, particularly consumption and housing. However, economic growth in the first quarter of 2025 will likely slow as the intensifying trade conflict weighs on sentiment and activity. Recent surveys suggest a sharp drop in consumer confidence and a slowdown in business spending as companies postpone or cancel investments. The negative impact of slowing domestic demand has been partially offset by a surge in exports in advance of tariffs being imposed.

Employment growth strengthened in November through January and the unemployment rate declined to 6.6%. In February, job growth stalled. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt the recovery in the jobs market. Meanwhile, wage growth has shown signs of moderation.

Inflation remains close to the 2% target. The temporary suspension of the GST/HST lowered some consumer prices, but January’s CPI was slightly firmer than expected at 1.9%. Inflation is expected to increase to about 2½% in March with the end of the tax break. The Bank’s preferred measures of core inflation remain above 2%, mainly because of the persistence of shelter price inflation. Short-term inflation expectations have risen in light of fears about the impact of tariffs on prices.

While economic growth has come in stronger than expected, the pervasive uncertainty created by continuously changing US tariff threats is restraining consumers’ spending intentions and businesses’ plans to hire and invest. Against this background, and with inflation close to the 2% target, Governing Council decided to reduce the policy rate by a further 25 basis points.

Monetary policy cannot offset the impacts of a trade war. What it can and must do is ensure that higher prices do not lead to ongoing inflation. Governing Council will be carefully assessing the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs. The Council will also be closely monitoring inflation expectations. The Bank is committed to maintaining price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is April 16, 2025. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Your Guide To The A First Home Savings Account (FHSA)

Wed, 05 Mar 2025 08:15:00 GMT

Dreaming of owning your first home? A First Home Savings Account (FHSA) could be your key to turning that dream into a reality. Let's dive into what an FHSA is, how it works, and why it's a smart investment for first-time homebuyers.

What is an FHSA?

An FHSA is a registered plan designed to help you save for your first home taxfree. If you're at least 18 years old, have a Social Insurance Number (SIN), and have not owned a home where you lived for the past four calendar years, you may be eligible to open an FHSA.

Reasons to Invest in an FHSA:

Save up to $40,000 for your first home.
Contribute tax-free for up to 15 years.
Carry over unused contribution room to the next year, up to a maximum of $8,000.
Potentially reduce your tax bill and carry forward undeducted contributions indefinitely.
Pay no taxes on investment earnings.
Complements the Home Buyers’ Plan (HBP).

How Does an FHSA Work?

Open Your FHSA: Start investing tax-free by opening your FHSA.
Contribute Often: Make tax-deductible contributions of up to $8,000 annually to help your money grow faster.
Withdraw for Your Home: Make a tax-free withdrawal at any time to purchase your first home.

Benefits of an FHSA:

Tax-Deductible Contributions: Contribute up to $8,000 annually, reducing your taxable income.
Tax-Free Earnings: Enjoy tax-free growth on your investments within the FHSA.
No Taxes on Withdrawals: Pay $0 in taxes on withdrawals used to buy a qualifying home.

Numbers to Know:

$8,000: Annual tax-deductible FHSA contribution limit.
$40,000: Lifetime FHSA contribution limit.
$0: Taxes on FHSA earnings when used for a qualifying home purchase.

In Conclusion

A First Home Savings Account (FHSA) is a powerful tool for first-time homebuyers, offering tax benefits and a structured approach to saving for homeownership. By taking advantage of an FHSA, you can accelerate your journey towards owning your first home and make your dream a reality sooner than you think.

Is It the Right Time to Refinance? 5 Signs You Should Consider It

Thu, 27 Feb 2025 19:17:30 GMT

Refinancing your mortgage can be a smart financial move, but how do you know if it’s the right time? Whether you’re looking to lower your monthly payments, access home equity, or consolidate debt, refinancing can offer valuable benefits. Here are five key signs that it might be the right time to refinance your mortgage in Canada.

1. Interest Rates Have Dropped

One of the most common reasons Canadians refinance is to secure a lower interest rate. Even a small decrease in your mortgage rate can lead to significant savings over time. If rates have dropped since you took out your mortgage, refinancing could help you reduce your monthly payments and save thousands in interest.

✅ Tip: Check with your mortgage broker to compare your current rate with today’s market rates.

2. Your Financial Situation Has Improved

If your credit score has increased or your income has stabilized since you first got your mortgage, you might qualify for better loan terms. Lenders offer lower rates and better conditions to borrowers with strong financial profiles.

✅ Tip: If you’ve paid off debts, improved your credit score, or increased your savings, refinancing could work in your favour.

3. You Want to Consolidate High-Interest Debt

Carrying high-interest debt from credit cards, personal loans, or lines of credit? Refinancing can help consolidate those debts into your mortgage at a much lower interest rate. This can make monthly payments more manageable and reduce the overall cost of borrowing.

✅ Tip: Make sure the savings from refinancing outweigh any prepayment penalties or fees.

4. You Need to Free Up Cash for a Major Expense

Many Canadians refinance to access their home’s equity for renovations, education costs, or major life expenses. With home values rising in many areas, a refinance could help you tap into that value while still keeping manageable payments.

✅ Tip: Consider a home equity line of credit (HELOC) if you need flexible access to funds.

5. Your Mortgage Term is Ending, and You Want Better Terms

If your mortgage is up for renewal, it’s the perfect time to explore refinancing options. Instead of simply accepting your lender’s renewal offer, compare rates and terms to see if you can get a better deal elsewhere.

✅ Tip: A mortgage broker can help you shop around and negotiate better terms on your behalf.

Is Refinancing Right for You?

Refinancing isn’t always the best move—there can be penalties for breaking your current mortgage, and not all savings are worth the switch. However, if you relate to any of the five signs above, it’s worth discussing your options with a mortgage professional.

Thinking about refinancing? Let’s chat and find the best option for you!

Costs Associated with Buying Property

Wed, 26 Feb 2025 09:00:01 GMT

When calculating if you can afford to purchase a property, don’t just figure out a rough downpayment and quickly move on from there. Several other costs need to be considered when buying a property; these are called your closing costs. Closing costs refer to the things you’ll have to pay for out of your pocket and the amount of money necessary to finalize the purchase of a property.

And like most things in life, it pays to plan ahead when it comes to closing costs. Closing costs should be part of the pre-approval conversation as they are just as important as saving for your downpayment.

Now, if your mortgage is high-ratio and requires mortgage default insurance, the lender will need to confirm that you have at least 1.5% of the purchase price available to close the mortgage. This is in addition to your downpayment. So if your downpayment is 10% of the purchase price, you’ll want to have at least 11.5% available to bring everything together. But of course, the more cash you have to fall back on, the better.

So with that said, here is a list of the things that will cost you money when you’re buying a property. As prices vary per service, if you’d like a more accurate estimate of costs, please connect anytime, it would be a pleasure to walk through the exact numbers with you.

Inspection or Appraisal

A home inspection is when you hire a professional to assess the property's condition to make sure that you won’t be surprised by unexpected issues. An appraisal is when you hire a professional to compare the property's value against other properties that have recently sold in the area. The cost of a home inspection is yours, while the appraisal cost is sometimes covered by your mortgage default insurance and sometimes covered by you!

Lawyer or Notary Fees

To handle all the legal paperwork, you’re required to hire a legal real estate professional. They’ll be responsible for transferring the title from the seller's name into your name and make sure the lender is registered correctly on the title. Chances are, this will be one of your most significant expenses, except if you live in a province with a property transfer tax.

Taxes

Depending on which province you live in and the purchase price of the property you’re buying, you might have to pay a property transfer tax or land transfer tax. This cost can be high, upwards of 1-2% of the purchase price. So you’ll want to know the numbers well ahead of time.

Insurance

Before you can close on mortgage financing, all financial institutions want to see that you have property/home insurance in place for when you take possession. If disaster strikes and something happens to the property, your lender must be listed on your insurance policy.

Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. Not necessary, but worth a conversation.

Moving Expenses

Congratulations, you just bought a new property; now you have to get all your stuff there! Don’t underestimate the cost of moving. If you’re moving across the country, the cost of hiring a moving company is steep, while renting a moving truck is a little more reasonable; it all adds up. Hopefully, if you’re moving locally, your costs amount to gas money and pizza for friends.

Utilities

Hooking up new services to a property is more time-consuming than costly. However, if you’re moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services. It doesn’t really make sense to buy a property if you can’t afford to turn on the power or connect the water.

So there you have it; this covers most of the costs associated with buying a new property. However, this list is by no means exhaustive, but as mentioned earlier, planning for these costs is a good idea and should be part of the pre-approval process.

If you have any questions about your closing costs or anything else mortgage-related, please connect anytime; it would be great to hear from you!

Fixed or Variable Mortgage? How Canada’s Economic Shifts Could Impact Your Decision

Mon, 24 Feb 2025 20:49:29 GMT

Navigating Mortgage Rates in an Uncertain Market

With Canada’s economy facing trade tensions, inflation concerns, and a potential slowdown, mortgage rates are in flux. Borrowers must weigh the risks and rewards of fixed vs. variable rates to make the best decision for their financial future.

What’s Driving Mortgage Rate Changes?

Several key factors are shaping the mortgage landscape:

Trade Uncertainty – New tariffs between the U.S. and Canada could push inflation higher, impacting bond yields and fixed mortgage rates.

Inflation Pressures – If inflation stays above the Bank of Canada’s 2% target, rate cuts may be delayed, keeping borrowing costs higher.

Recession Concerns – If economic growth slows, the BoC could cut rates, making variable-rate mortgages more attractive.

Fixed vs. Variable: Which One is Right for You?

�� Fixed-Rate Mortgages:
✅ Predictable payments for peace of mind
✅ Protection from future rate hikes
❌ Typically higher initial rates
❌ Costly penalties if you break your term early

�� Variable-Rate Mortgages:
✅ Lower starting rates with potential for savings
✅ Easier to break or refinance if needed
❌ Payments can fluctuate with rate changes
❌ Higher risk if inflation pushes rates upward

What’s the Best Move Right Now?

✔ Go Fixed if you want stability and protection from rising rates.
✔ Go Variable if you believe rates will drop and you can handle some risk.
✔ Consider a Hybrid Mortgage to get the best of both worlds.

Stay Flexible & Informed

Mortgage rates are unpredictable, and the best choice today may change in a few months. Working with a mortgage professional can help you navigate these shifts and secure the best deal for your financial future.

Need expert guidance? Reach out today to discuss your options!

Alternative Lending Provides You With Options

Wed, 19 Feb 2025 09:00:01 GMT

Alternative lending refers to any lending practices that fall outside the normal banking channels. Alternative lenders think outside the box and offer solutions to Canadians who wouldn’t otherwise qualify for traditional mortgage financing.

In an ideal world, we’d all qualify for the best mortgage terms available. However, this isn’t the case. Securing the most favourable terms depends on your financial situation. Here are a few circumstances where alternative lending might make sense for you.

Damaged Credit

Bad credit doesn’t disqualify you from mortgage financing. Many alternative lenders look at the strength of your employment, income, and your downpayment or equity to offer you mortgage financing. Credit is important, but it’s not everything, especially if there is a reasonable explanation for the damaged credit.

When dealing with alternative lending, the interest rates will be a little higher than traditional mortgage financing. But if the choice is between buying a property or not, or getting a mortgage or not, having options is a good thing. Alternative lenders provide you with mortgage options. That’s what they do best.

So, if you have damaged credit, consider using an alternative lender to provide you with a short-term mortgage option. This will give you time to establish better credit and secure a mortgage with more favourable terms. Use an alternative lender to bridge that gap!

Self-Employment

If you run your own business, you most likely have considerable write-offs that make sense for tax planning reasons but don’t do so much for your verifiable income. Traditional lenders want to see verifiable income; alternative lenders can be considerably more understanding and offer competitive products.

As interest rates on alternative lending aren’t that far from traditional lending, alternative lending has become the home for most serious self-employed Canadians. While you might pay a little more in interest, oftentimes, that money is saved through corporate structuring and efficient tax planning.

Non-traditional income

Welcome to the new frontier of earning an income.

If you make money through non-traditional employment like Airbnb, tips, commissions, Uber, or Uber eats, alternative lending is more likely to be flexible to your needs.

Most traditional lenders want to see a minimum of two years of established income before considering income on a mortgage application. Not always so with alternative lenders, depending on the strength of your overall application.

Expanded Debt-Service Ratios

With the government stress test significantly lessening Canadians' ability to borrow, the alternative lender channel allows expanded debt-service ratios. This can help finance the more expensive and suitable property for responsible individuals.

Traditional lending restricts your GDS and TDS ratios to 35/42 or 39/44, depending on your credit score. However, alternative lenders, depending on the loan-to-value ratio, can be considerably more flexible. The more money you have as a downpayment, the more you’re able to borrow and expand those debt-service guidelines. It’s not the wild west, but it’s certainly more flexible.

Connect anytime

Alternative lending can be a great solution if your financial situation isn’t all that straightforward. The goal of alternative lending is to provide you with options. You can only access alternative lending through the mortgage broker channel.

Please connect anytime if you’d like to discuss mortgage financing and what alternative lending products might suit your needs; it would be a pleasure to work with you.

Benefits of Working with an Independent Mortgage Professional

Wed, 12 Feb 2025 09:00:01 GMT

If you need a mortgage, working with an independent mortgage professional will save you money and provide you with better options than dealing with a single financial institution. And if that is the only sentence you read in this entire article, you already know all you need to know.

However, if you’d like to dig a little deeper, here are some reasons that outline why working with an independent mortgage professional is in your best interest.

The best mortgage is the one that costs you the least over the long term. An independent mortgage professional can help you achieve this.

Mortgages aren’t created equally. Oftentimes slick marketing leads us to believe the lowest “sticker price” is the best value. So when it comes to mortgage financing, you might assume the mortgage with the lowest rate is the best option. This isn’t always the case.

When considering a mortgage, your goal should be to find the mortgage that will cost you the least amount of money over the total length of the mortgage. There are many factors to consider, such as your specific financial situation, the rate, initial term length, fixed or variable rate structure, amortization, and the penalties incurred should you need to break your mortgage early; the fine print matters.

An independent mortgage professional can walk through all these factors with you and will help you find the mortgage that best suits your needs. Sometimes taking a mortgage with a slightly higher rate can make sense if it gives you flexibility down the line or helps you avoid huge payout penalties.

Working the numbers with an independent mortgage professional will save you money in the long run instead of just going with what a single lender is offering.

Save time by letting an independent mortgage professional find the best mortgage product for you.

Let's face it, getting a mortgage can be challenging enough on its own. Everyone’s financial situation is a little different and making sense of lender guidelines is a full-time job in itself.

So instead of dealing with multiple lending institutions on your own, when you work with an independent mortgage professional, you submit a single mortgage application that is compared to the lending guidelines of various mortgage lenders. This will save you time as you don’t have to go from bank to bank to ensure you’re getting the best mortgage.

Simply put, an independent mortgage professional works for you and has your best interest in mind, while a bank specialist works for the bank and has the bank's best interest in mind.

It’s no secret that Canadian banks make a lot of money. It seems every quarter they turn billions of dollars in profit (despite the economic environment). They do this at the expense of their customers by charging as much interest as they can and structuring mortgages to their benefit.

It’s all about the alignment of interest. Bank employees work for the bank; the bank pays them to make money for the bank. In contrast, independent mortgage professionals are provincially licensed to work for their clients and are paid a standardized placement or finder’s fee for matching borrowers with lenders. When you work with a single bank, you only have access to the products of that bank. When you work with an independent mortgage professional, you have access to all of the lenders that mortgage professionals have relationships with and all their products.

Working with an independent mortgage professional will save you money, time, and provide you with better mortgage options. Plus, you have the added benefit of working with a licensed professional looking out for your best interest, providing you with the best possible advice.

If you’d like to know more or to discuss mortgage financing, please connect anytime; it would be a pleasure to work with you.

How to Ensure a Smooth Home Purchase

Wed, 05 Feb 2025 09:00:01 GMT

Chances are, buying a home is one of the most important financial decisions you’ll make in your life. And as mortgage financing can be somewhat confusing at the best of times, to alleviate some of the stress and to ensure your home purchase goes as smoothly as possible, here are six very high-level steps you should follow.

While it might seem like the best place to start the home buying process is to browse MLS on your phone and then contact a Realtor to go out and look at properties, it’s not. First, you’re going to want to work with a licensed independent mortgage professional.

When you work with an independent mortgage professional, instead of working with a single bank, you’ll be working with someone who has your best interest in mind and can present you with mortgage options from several financial institutions.

The second step in the home buying process is to put together a mortgage plan. Unless you have enough money in the bank to buy a home with cash, you’re going to need a mortgage. And as mortgage financing can be challenging and not so straightforward, the best time to start planning for a mortgage is right now. Don’t make another move until you discuss your financial situation with an independent mortgage professional. It’s never too early to start planning.

As part of your mortgage plan, you’ll want to figure out what you can afford on paper, assess your credit score, run some financial scenarios, calculate mortgage payments, and have a clear picture of exactly how much money is required for a downpayment and closing costs. You’ll also be able to discuss which mortgage product is best for you, considering different mortgage terms, types, amortizations, and features.

Now, what you qualify to borrow on paper doesn’t necessarily mean you can actually afford the payments in real life. You need to consider your lifestyle and what you spend your money on. Understanding your cash flow is the key. Make a budget to verify you can actually afford your proposed mortgage payments and that you have enough funds to close on the mortgage. No one wants to be house-poor or left scrambling to come up with funds to close at the last minute.

If everything looks good at this point, the next step will be to get a preapproval in place. Now, a pre-approval is more than just typing some numbers into a form or online calculator; you need to complete a mortgage application and submit all the documents requested by your mortgage professional.

Only proceed with looking at properties when you’ve been given the green light from your mortgage professional. When you’ve found a property to purchase, you’ll work very closely with your mortgage professional to arrange mortgage financing in a short period of time. This is where being prepared pays off.

As you’ve already collected and submitted many documents upfront during the preapproval process, you should be set up for success. However, remain flexible and provide any additional documentation required by the lender to secure mortgage financing.

Once you have firm lender approval and you’ve removed conditions on the purchase agreement, don’t change anything about your financial situation until you have the keys. Don’t quit your job, don’t take out a new loan, or don’t make a large withdrawal from your bank account. Put your life into a holding pattern until you take possession of your new home.

So there you have it, six steps to ensuring a smooth home purchase:

Work with an independent mortgage professional.
Put together a mortgage plan.
Figure out what you can actually afford.
Get a pre-approval.
Provide the necessary documentation.
Don’t change anything about your financial situation until you take possession.

If you’d like to discuss your personal financial situation and find the best mortgage product for you, let’s work together. We can figure out a plan to buy a home as stress-free as possible.

Please connect anytime; it would be a pleasure to work with you.

Bank of Canada Kicks Off 2025 with a Rate Cut and Balance Sheet Normalization

Thu, 30 Jan 2025 23:22:34 GMT

The Bank of Canada has lowered its overnight rate by 25 basis points—the sixth cut since June last year. It also plans to end quantitative tightening and normalize its balance sheet.

This brings the BOC rate to 3.00% and we expect lenders to cut their Prime Lending rate to 5.20%. This is all good news and will help variable rate mortgage holders.

However, the Bank warns of "more-than-usual uncertainty," especially with potential U.S. trade tariffs on the horizon. To say that predictions about future rate trajectory are tricky is quite the understatement at this point. Below is a summary of all the factors impacting the Canadian Economy, the Bank of Canada and interest rates right now.

Canadian Economy & Housing

Lower rates are boosting the economy, with consumer spending and housing activity picking up.
Business investment remains weak.
Exports should benefit from new oil and gas capacity.

Inflation Outlook

CPI inflation is near 2%, though temporarily affected by the GST/HST suspension on some goods.
Housing costs are still high but gradually easing.
Broad indicators suggest underlying inflation is very close to the 2% target.
The Bank expects inflation to remain near 2% over the next two years.

Labour Market

Unemployment sits at 6.7%, signaling a soft labour market.
Job growth has picked up after lagging behind workforce expansion.
Wage pressures are easing, but progress has been slow.

Global Economy, Bond Yields & Canadian Dollar

Global GDP is expected to grow 3% annually over the next two years.
U.S. growth is stronger than expected, while Europe lags.
China’s economy is stabilizing after recent policy support.
U.S. bond yields have risen, but Canadian yields are down slightly.
The Canadian dollar has weakened against the U.S. dollar due to trade uncertainty.
Oil prices have been volatile, recently settling about $5 higher than October projections.

Other Key Announcements

The Bank will complete balance sheet normalization and resume asset purchases in March 2025.
With inflation near 2% and the economy in excess supply, the Bank deemed a rate cut necessary.
The impact of rate cuts since June has been "substantial," fueling household spending and gradual economic strengthening.

Outlook from the BOC today:

The Bank projects 1.8% GDP growth for both 2025 and 2026.
Lower immigration targets will slow population growth, moderating overall economic expansion.
The risks in the outlook are "reasonably balanced" unless U.S. trade tensions escalate, which could weaken GDP and push prices higher.
The Bank reaffirmed its commitment to price stability.

Bottom line: The Bank is cutting rates to support growth, but uncertainties—especially trade risks—loom large. So, what to do? Variable rate or Fixed rate? The jury is out on this for the moment but less risk averse borrowers may want to consider a Variable if they believe recessionary pressures will push rates down. The counter argument to this is that Tariffs could cause inflation and thus, push the BOC to increase rates.

Given this chance, risk averse borrowers might therefore prefer to “set it and forget it” with a fixed rate. It comes down to a very personal decision and analyzing the financial position and future goals for each borrower.

Please reach out to review your personal plans and we can help you weigh the risks based on your personal financial situation.

It was an honour to be asked by CTV to share some thoughts on all of this and the local real estate market. You may have caught me on the early news last night, or you can read the article.

Bank of Canada Rate Announcement Jan 29th, 2025

Wed, 29 Jan 2025 15:27:08 GMT

Bank of Canada reduces policy rate by 25 basis points to 3%, announces end of quantitative tightening.

FOR IMMEDIATE RELEASE

Read the January 29th, 2025 Monetary Report.

January 29, 2025

The Bank of Canada today reduced its target for the overnight rate to 3%, with the Bank Rate at 3.25% and the deposit rate at 2.95%. 1 The Bank is also announcing its plan to complete the normalization of its balance sheet, ending quantitative tightening. The Bank will restart asset purchases in early March, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy. 2

Projections in the January Monetary Policy Report (MPR) published today are subject to more-than-usual uncertainty because of the rapidly evolving policy landscape, particularly the threat of trade tariffs by the new administration in the United States. Since the scope and duration of a possible trade conflict are impossible to predict, this MPR provides a baseline forecast in the absence of new tariffs.

In the MPR projection, the global economy is expected to continue growing by about 3% over the next two years. Growth in the United States has been revised up, mainly due to stronger consumption. Growth in the euro area is likely to be subdued as the region copes with competitiveness pressures. In China, recent policy actions are boosting demand and supporting near-term growth, although structural challenges remain. Since October, financial conditions have diverged across countries. US bond yields have risen, supported by strong growth and more persistent inflation. In contrast, yields in Canada are down slightly. The Canadian dollar has depreciated materially against the US dollar, largely reflecting trade uncertainty and broader strength in the US currency. Oil prices have been volatile and in recent weeks have been about $5 higher than was assumed in the October MPR.

In Canada, past cuts to interest rates have started to boost the economy. The recent strengthening in both consumption and housing activity is expected to continue. However, business investment remains weak. The outlook for exports is being supported by new export capacity for oil and gas.

Canada’s labour market remains soft, with the unemployment rate at 6.7% in December. Job growth has strengthened in recent months, after lagging growth in the labour force for more than a year. Wage pressures, which have proven sticky, are showing some signs of easing.

The Bank forecasts GDP growth will strengthen in 2025. However, with slower population growth because of reduced immigration targets, both GDP and potential growth will be more moderate than was expected in October. Following growth of 1.3% in 2024, the Bank now projects GDP will grow by 1.8% in both 2025 and 2026, somewhat higher than potential growth. As a result, excess supply in the economy is gradually absorbed over the projection horizon.

CPI inflation remains close to 2%, with some volatility due to the temporary suspension of the GST/HST on some consumer products. Shelter price inflation is still elevated but it is easing gradually, as expected. A broad range of indicators, including surveys of inflation expectations and the distribution of price changes among components of the CPI, suggests that underlying inflation is close to 2%. The Bank forecasts CPI inflation will be around the 2% target over the next two years.

Setting aside threatened US tariffs, the upside and downside risks around the outlook are reasonably balanced. However, as discussed in the MPR, a protracted trade conflict would most likely lead to weaker GDP and higher prices in Canada.

With inflation around 2% and the economy in excess supply, Governing Council decided to reduce the policy rate a further 25 basis points to 3%. The cumulative reduction in the policy rate since last June is substantial. Lower interest rates are boosting household spending and, in the outlook published today, the economy is expected to strengthen gradually and inflation to stay close to target. However, if broad-based and significant tariffs were imposed, the resilience of Canada’s economy would be tested. We will be following developments closely and assessing the implications for economic activity, inflation and monetary policy in Canada. The Bank is committed to maintaining price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is March 12, 2025. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on April 16, 2025.

Footnotes

1. Effective January 30, the deposit rate will be set at 5 basis points below the Bank’s policy interest rate to improve the effectiveness of monetary policy implementation. For more details, see the market notice published simultaneously with this press release.[ ← ]
2. A market notice published simultaneously with this press release provides operational details.[ ← ]

What is a Cashback Mortgage?

Wed, 22 Jan 2025 09:00:02 GMT

As the name implies, a cashback mortgage is similar to a standard mortgage, except that you receive a lump sum of cash upon closing. This lump sum will either be a fixed amount of money or a percentage of the mortgage amount, usually between 1-7%, depending on the mortgage term selected.

How you use the cash is entirely up to you. Some of the most common reasons to secure a cashback mortgage are to:

Cover closing costs.
Buy new furniture.
Renovate your property.
Supplement cashflow.
Consolidate higher-interest debt.

Really, you can use the cash for anything you like. It’s tax-free and paid to you directly once the mortgage closes.

Understanding the cost of a cashback mortgage.

Now, while it might appear like a cashback mortgage is a great way to get some free money, it’s not. Banks aren’t altruistic; they’re in the business of making money by lending money. Securing a mortgage that provides you with cash back at closing will cost you a higher interest rate over your mortgage term.

A cashback mortgage is like getting a fixed loan rolled into your mortgage. Your interest rate is increased to cover the additional funds being lent.

Now, with so many different cashback options available and with interest rates constantly changing, it's nearly impossible to run through specific calculations on a simple article to outline how much more you’d pay over the term. So, if you'd like to identify the true cost of securing a cashback mortgage, the best place to start is to discuss your financial situation with an independent mortgage professional.

When you work with an independent mortgage professional instead of a single bank, you receive unbiased advice, more financing options, and a clear picture of the cost associated with securing a mortgage.

Getting cashback at closing is a mortgage feature that makes the bank more money at your expense. This isn’t necessarily a bad thing; the key is to be informed of the costs involved so you can make a good decision.

Eligibility for a cashback mortgage.

Simply put, a cashback mortgage isn’t for everyone. This is a mortgage product that has tougher qualifications than standard mortgage financing. Any lender willing to offer a cashback mortgage will want to see that you have stable employment, a fabulous credit score, and healthy debt service ratios. If your mortgage application is in any way “unique,” the chances of qualifying for a cashback mortgage are pretty slim.

Breaking your mortgage term early.

In addition to paying a higher interest rate to cover the cost of receiving the cashback at closing, a cashback mortgage also limits your options down the line.

If your life circumstances change and you need to break your mortgage mid-term, depending on the conditions set out in your mortgage contract, you’ll most likely be required to either pay all of the cashback received or at least a portion, depending on how long you’ve had the mortgage.

As all cashback mortgages are tied to fixed-rate terms, so in addition to repaying the cashback, you’d also be required to pay the interest rate differential penalty; or 3 months interest, whichever is greater for breaking your mortgage term early.

Sufficed to say, should you need to pay out your mortgage early, breaking your cashback mortgage will be costly. Certainly, this is something to consider when assessing the suitability of this mortgage product.

Get independent mortgage advice.

Understanding the intricacies of mortgage financing can be difficult at the best of times. With all the different terms, rates, and mortgage products available, it’s hard to know which mortgage is best for you.

So while a mortgage that offers a cash incentive upon closing might initially seem like an attractive offer, make sure you seek out the guidance of an independent mortgage professional to help you navigate the costs associated with a cashback mortgage. While it might be a great option for you, there might be other mortgage options that better suit your needs. It's worth a conversation for sure!

If you’d like to discuss what a cashback mortgage or any other mortgage product would look like for you, please get in touch. It would be a pleasure to work with you.

Buying a Second Property

Wed, 15 Jan 2025 09:00:02 GMT

If you’ve been thinking about buying a second property and you’re looking to put some of the pieces together, you’ve come to the right place!

Whether you’re looking to buy a vacation property, start a rental portfolio, or help accommodate a family member, there are many reasons to buy a second property (while keeping your existing property), which might make sense for you!

Now, while there are many great reasons to buy a second property, there is also a lot to know as you walk through the process. The key here is to have absolute clarity around your why.

Ask yourself, why do you want to buy a second property? This isn’t a decision to be taken lightly or one that should be made too quickly. Buying a second property should be a strategic decision that allows you to accomplish your goals, and it should include an assessment of your overall financial health.

So with clear goals in mind, the best place to start the process is to have a conversation with an independent mortgage professional. This will allow you to assess your financial situation, outline the costs, and put together a plan to make it happen.

While purchasing a second property is similar to buying a primary residence, there are some key differences. Just because you’ve qualified in the past for your existing mortgage doesn’t mean you’ll qualify to purchase a second property.

One key difference is the amount of downpayment you might be required to come up with. A property that is owner-occupied or occupied by a family member on a rent-free basis will require less of a downpayment than if the second property will be used to generate an income. So, depending on the property's intended use, you might have to come up with as much as 25%-35% down.

This is where strategic planning comes in. Consider unlocking the equity in your existing home to finance the downpayment to purchase your second home. Here are a few ways you can go about doing that:

Securing a new mortgage if you own your property clear title
Refinancing your existing mortgage to access additional funds
Securing a home equity line of credit (HELOC)
Getting a second mortgage behind your existing first mortgage
Securing a reverse mortgage

The conversation about buying a second property should include assessing your overall financial health, leveraging your existing assets to lower your overall cost of borrowing, and figuring out the best way to accomplish your goals.

And as it's impossible to outline every scenario in a simple blog post, if you’d like to discuss your goals and put a plan together to finance a second property, connect anytime. It would be a pleasure to work with you.

Reposition Your Debts Through Mortgage Financing

Wed, 08 Jan 2025 09:00:01 GMT

If you’re a homeowner looking to optimize your finances, consider taking advantage of your home’s equity to reposition any existing debts you may have.

If you’ve accumulated consumer debt, the payments required to service these debts can make it difficult to manage your daily finances. A consolidation mortgage might be a great option for you!

Simply put, debt repositioning or debt consolidation is when you combine your consumer debt with a mortgage secured to your home. To make this happen, you’ll borrow against your home’s equity.

This can mean refinancing an existing mortgage, securing a home equity line of credit, or taking out a second mortgage. Each mortgage option has its advantages which are best outlined in discussion with an independent mortgage professional.

Some of the types of debts that you can consolidate are:

Credit Card
Unsecured Line of Credit
Car Loan
Student Loans
Personal or Payday Loans

Most unsecured debt carries a high interest rate because the lender doesn't have any collateral to fall back on should you default on the loan. However, as a mortgage is secured to your home, the lender has collateral and can provide you with lower rates and more favourable terms.

Debt consolidation makes sense because it allows you to take high-interest unsecured debts and reposition them into a single low payment.

So, when considering the best mortgage for you, getting a low rate is important, but it’s not everything. Your goal should be to lower your overall cost of borrowing. A mortgage that allows for flexibility in prepayments helps with this. It’s not uncommon to find a mortgage at a great rate that allows you to increase your payments by 15% per payment, double your payments, or make a lump sum payment of up to 15% annually.

As additional payments go directly to the principal repayment of the loan, once you’ve consolidated all your debts into a single payment, it’s smart to take advantage of your prepayment privileges by paying more than just your minimum required mortgage payment, as this will help you become debt-free sooner.

While there is a lot to unpack here, if you’d like to discuss what using a mortgage to reposition your debts could look like for you, here’s a simple plan we can follow:

First, we’ll assess your existing debt to income ratio.
We’ll establish your home’s equity.
We’ll consider all your mortgage options.
Lastly, we’ll reposition your debts to help optimize your finances.

If this sounds like the plan for you, the best place to start is to connect directly. It would be a pleasure to work with you.

Mortgage Insurance Rule Changes Enable Homeowners to Add Secondary Suites

Thu, 02 Jan 2025 21:17:23 GMT

As housing affordability challenges persist across Canada, innovative solutions are reshaping the way homeowners can contribute to housing supply. Starting January 15, 2025, new mortgage insurance rule changes will allow Canadian homeowners to access insured refinancing options to create secondary suites, such as basement apartments or laneway homes.

This move, announced in Budget 2024 and detailed by the Department of Finance Canada, is part of a broader strategy to increase housing density and improve affordability while offering homeowners the chance to generate additional income.

Why These Changes Matter

Historically, converting extra space into rental units has been both costly and mired in municipal red tape. Recent zoning reforms across Canada’s major cities, driven by Housing Accelerator Fund agreements, are reducing these barriers. The creation of secondary suites not only expands housing supply but also provides financial benefits to homeowners, such as offering seniors additional income to support aging in place.

Key Parameters for the New Rules

The new mortgage insurance program is designed to enable homeowners to build legal, self-contained secondary suites that comply with municipal requirements.

Here are the essential details:

Eligibility Requirements

Homeowners must already own the property.

The homeowner or a close relative must occupy one of the existing units.

Additional units must not be used as short-term rentals.

Project Specifications

New units must be fully self-contained with separate entrances (e.g., basement suites, laneway homes).

Up to four total dwelling units are allowed, including existing units.

Financial Parameters

The “as improved” property value must be less than $2 million.

Homeowners can refinance up to 90% of the property’s value, including the enhanced value from secondary suites.

The maximum amortization period is 30 years.

Additional financing must not exceed the project’s costs.

When Do These Rules Take Effect?

Starting January 15, 2025, lenders can submit applications for mortgage insurance under these updated parameters. This applies to all eligible properties across Canada, provided the new units align with municipal zoning requirements.

What This Means for Homeowners

For homeowners with underutilized space, such as basements or detached garages, this new program offers an opportunity to increase property value and create a source of long-term income. By building legal secondary suites, homeowners can contribute to Canada’s rental housing market while gaining financial security.

A Step Toward Housing Solutions

As housing supply remains a pressing issue, these mortgage insurance changes reflect a commitment to practical, homeowner-driven solutions. Whether you’re a senior looking to age in place or a family seeking to maximize your property’s potential, these changes represent an exciting opportunity to invest in your home and your community.

Stay informed and explore your options with your lender to determine if this program is right for you. The path to unlocking your property’s potential begins in 2025.

How To Avoid An Accidental Home Purchase

Wed, 01 Jan 2025 09:00:00 GMT

Buying a property might actually be easier than you think. So, if you have NO desire AT ALL to qualify for a mortgage, here are some great steps you can take to ensure you don’t accidentally buy a property.

Fair warning, this article might get a little cheeky.

Quit your job.

First things first, ditch that job. One of the best ways to make sure you won’t qualify for a mortgage is to be unemployed. Yep, most mortgage lenders aren’t in the practice of lending money to unemployed people!

If you already have a preapproval in place and don’t want to go through with financing, no problems. Unexpectedly quit your job mid-application. Because, even if you’re making a lateral move or taking a better job, any change in employment status can negatively impact your approval.

Spend All Your Savings.

To get a mortgage, you’ll have to bring some money to the table. In Canada, the minimum downpayment required is 5% of the purchase price. Now, if the goal is not to get a mortgage, spending all your money and having absolutely nothing in your account is a surefire way to ensure you won’t qualify for a mortgage. So, if you’ve been looking for a reason to go out and buy a new vehicle, consider this your permission.

Collect as Much Debt as Possible.

After quitting your job and spending all your savings, you should definitely go out and incur as much debt as possible! The higher the payments, the better.

You see, one of the main qualifiers on a mortgage is called your debt-service ratio. This takes into count the amount of money you make compared to the amount of money you owe. So the more debt you have, the less money you’ll have leftover to finance a home.

Stop Making Your Debt Payments

So let’s say you can’t shake your job, you still have a good amount of money in the bank, and you’ve run out of ways to spend money you don’t have. Don’t panic; you can still absolutely wreck your chances of qualifying for a mortgage! Just don’t pay any of your bills on time or stop making your payments altogether.

Why would any lender want to lend you money when you have a track record of not paying back any of the money you’ve already borrowed?

Provide Ugly Supporting Documentation.

Now, if all else fails, the last chance you have to scuttle your chances of getting a mortgage is to provide the lender with really ugly documents. To support your mortgage application, lenders must complete their due diligence. Here are three ways to make sure the lender won’t be able to verify anything.

Firstly, and probably the most straightforward, make sure your name doesn’t appear anywhere on any of your statements. This way, the lender can’t be sure the documents are actually yours or not.

Secondly, when providing bank statements to prove downpayment funds, make sure there are multiple cash deposits over $1000 without explaining where the money came from. This will look like money laundering and will throw up all kinds of red flags.

And lastly, consider blacking out all your “personal information.” Just use a black Sharpie and make your paperwork look like classified FBI documents.

Follow-Through

So there you have it, to avoid an accidental home purchase, you should quit your job, spend all your money, borrow as much money as possible, stop making your payments, and make sure the lender can’t prove anything! This will ensure no one will lend you money to buy a property!

Now, on the off chance that you’d actually like to qualify for a mortgage, you’ve come to the right place. The suggestion would be to actually keep your job, save for a downpayment, limit the amount of debt you carry, make your payments on time, and provide clear documentation to support your mortgage application!

If you'd like to make sure you're on the right track, connect anytime. It would be a pleasure to walk through the mortgage process with you.

Locking in a Variable Rate Mortgage

Wed, 25 Dec 2024 09:45:12 GMT

If you have a variable rate mortgage and recent economic news has you thinking about locking into a fixed rate, here’s what you can expect will happen. You can expect to pay a higher interest rate over the remainder of your term, while you could end up paying a significantly higher mortgage penalty should you need to break your mortgage before the end of your term.

Now, each lender has a slightly different way that they handle the process of switching from a variable rate to a fixed rate. Still, it’s safe to say that regardless of which lender you’re with, you’ll end up paying more money in interest and potentially way more money down the line in mortgage penalties should you have to break your mortgage.

Interest rates on fixed rate mortgages

Fixed rate mortgages come with a higher interest rate than variable rate mortgages. If you’re a variable rate mortgage holder, this is one of the reasons you went variable in the first place; to secure the lower rate.

The perception is that fixed rates are somewhat “safe” while variable rates are “uncertain.” And while it’s true that because the variable rate is tied to prime, it can increase (or decrease) within your term, there are controls in place to ensure that rates don’t take a roller coaster ride. The Bank of Canada has eight prescheduled rate announcements per year, where they rarely move more than 0.25% per announcement, making it impossible for your variable rate to double overnight.

Penalties on fixed rate mortgages

Each lender has a different way of calculating the cost to break a mortgage. However, generally speaking, breaking a variable rate mortgage will cost roughly three months of interest or approximately 0.5% of the total mortgage balance. While breaking a fixed rate mortgage could cost upwards of 4% of the total mortgage balance should you need to break it early and you’re required to pay an interest rate differential penalty.

For example, on a $500k mortgage balance, the cost to break your variable rate would be roughly $2500, while the cost to break your fixed rate mortgage could be as high as $20,000, eight times more depending on the lender and how they calculate their interest rate differential penalty.

The flexibility of a variable rate mortgage vs the cost of breaking a fixed rate mortgage is likely another reason you went with a variable rate in the first place.

Breaking your mortgage contract

Did you know that almost 60% of Canadians will break their current mortgage at an average of 38 months? And while you might have the best intention of staying with your existing mortgage for the remainder of your term, sometimes life happens, you need to make a change.

Here’s is a list of potential reasons you might need to break your mortgage before the end of the term. Certainly worth reviewing before committing to a fixed rate mortgage.

Sale of your property because of a job relocation.
Purchase of a new home.
Access equity from your home.
Refinance your home to pay off consumer debt.
Refinance your home to fund a new business.
Because you got married, you combine assets and want to live together in a new property.
Because you got divorced, you need to split up your assets and access the equity in your property
Because you or someone close to you got sick
Because you lost your job or because you got a new one
You want to remove someone from the title.
You want to pay off your mortgage before the maturity date.

Essentially, locking your variable rate mortgage into a fixed rate is choosing to voluntarily pay more interest to the lender while giving up some of the flexibility should you need to break your mortgage.

If you’d like to discuss this in greater detail, please connect anytime. It would be a pleasure to walk you through all your mortgage options and provide you with professional mortgage advice.

Credit and Mortgage Financing

Wed, 18 Dec 2024 09:00:00 GMT

Credit. The ability of a customer to obtain goods or services before payment, based on the trust that you will make payments in the future. When you borrow money to buy a property, you’ll be required to prove that you have a good history of managing your credit. That is, making good on all your payments.

But what exactly is a “good history of managing credit”? What are lenders looking at when they assess your credit report? If you’re new to managing your credit, an easy way to remember the minimum credit requirements for mortgage financing is the 2/2/2 rule. Two active trade lines established over a minimum period of two years, with a minimum limit of two thousand dollars, is what lenders are looking for.

A trade line could be a credit card, an instalment loan, a car loan, or a line of credit; basically, anytime a lender extends credit to you. Your repayment history is kept on your credit report and generates a credit score. For a tradeline to be considered active, you must have used it for at least one month and then once every three months.

To build a good credit history, both of your tradelines need to be used for at least two years. This history gives the lender confidence that you’ve established good credit habits over a decent length of time.

Two thousand dollars is the bare minimum limit required on your trade lines. So if you have a credit card with a $1000 limit and a line of credit with a $2500 limit, you would be okay as your limit would be $3500. If you’re managing your credit well, chances are you will be offered a limit increase. It’s a good idea to take it. Mortgage Lenders want to know that you can handle borrowing money.

Now, don’t confuse the limit with the balance. You don’t have to carry a balance on your trade lines for them to be considered active. To build credit, it’s best to use your tradelines but pay them off in full every month in the case of credit cards and make all your loan payments on time.

A great way to use your credit is to pay your bills via direct withdrawal from your credit card, then set up a regular transfer from your bank account to pay off the credit card in full every month. Automation becomes your best friend. Just make sure you keep on top of your banking to ensure everything works as it should.

Now, you might be thinking, what about my credit score, isn’t that important when talking about building a credit profile to secure a mortgage? Well, your credit score is important, but if you have two tradelines, reporting for two years, with a minimum limit of two thousand dollars, without missing any payments, your credit score will take care of itself, and you should have no worries.

With that said, it never hurts to take a look at your credit every once and a while to ensure no errors are reported on your credit bureau. So, if you’re thinking about buying a property in the next couple of years and want to make sure that you have good enough credit to qualify, let’s talk.

Connect anytime; it would be a pleasure to work with you and help you to understand better how your credit impacts mortgage qualification.

Bank of Canada Rate Announcement Dec 11th, 2024

Wed, 11 Dec 2024 15:28:28 GMT

Bank of Canada reduces policy rate by 50 basis points to 3¼%.

FOR IMMEDIATE RELEASE

Media Relations

Ottawa, Ontario

December 11, 2024

The Bank of Canada today reduced its target for the overnight rate to 3¼%, with the Bank Rate at 3¾% and the deposit rate at 3¼%. The Bank is continuing its policy of balance sheet normalization.

The global economy is evolving largely as expected in the Bank’s October Monetary Policy Report (MPR). In the United States, the economy continues to show broad-based strength, with robust consumption and a solid labour market. US inflation has been holding steady, with some price pressures persisting. In the euro area, recent indicators point to weaker growth. In China, recent policy actions combined with strong exports are supporting growth, but household spending remains subdued. Global financial conditions have eased and the Canadian dollar has depreciated in the face of broad-based strength in the US dollar.

In Canada, the economy grew by 1% in the third quarter, somewhat below the Bank’s October projection, and the fourth quarter also looks weaker than projected. Third-quarter GDP growth was pulled down by business investment, inventories and exports. In contrast, consumer spending and housing activity both picked up, suggesting lower interest rates are beginning to boost household spending. Historical revisions to the National Accounts have increased the level of GDP over the past three years, largely reflecting higher investment and consumption. The unemployment rate rose to 6.8% in November as employment continued to grow more slowly than the labour force. Wage growth showed some signs of easing, but remains elevated relative to productivity.

A number of policy measures have been announced that will affect the outlook for near-term growth and inflation in Canada. Reductions in targeted immigration levels suggest GDP growth next year will be below the Bank’s October forecast. The effects on inflation will likely be more muted, given that lower immigration dampens both demand and supply. Other federal and provincial policies—including a temporary suspension of the GST on some consumer products, one-time payments to individuals, and changes to mortgage rules—will affect the dynamics of demand and inflation. The Bank will look through effects that are temporary and focus on underlying trends to guide its policy decisions.

In addition, the possibility the incoming US administration will impose new tariffs on Canadian exports to the United States has increased uncertainty and clouded the economic outlook.

CPI inflation has been about 2% since the summer, and is expected to average close to the 2% target over the next couple of years. Since October, the upward pressure on inflation from shelter and the downward pressure from goods prices have both moderated as expected. Looking ahead, the GST holiday will temporarily lower inflation but that will be unwound once the GST break ends. Measures of core inflation will help us assess the trend in CPI inflation.

With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, Governing Council decided to reduce the policy rate by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range. Governing Council has reduced the policy rate substantially since June. Going forward, we will be evaluating the need for further reductions in the policy rate one decision at a time. Our decisions will be guided by incoming information and our assessment of the implications for the inflation outlook. The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.

Information note

The next scheduled date for announcing the overnight rate target is January 29, 2025. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Purchase Plus Improvements

Wed, 04 Dec 2024 09:15:01 GMT

The best place to start the mortgage process is with a pre-approval. But once you’ve been pre-approved for a mortgage and you’ve been shopping with location in mind, what happens when you can’t find a suitable property?

There's no doubt about it; finding the perfect property within your price range is a difficult task, especially for first-time homebuyers. So, before buyer’s fatigue sets in, maybe you should consider adding the cost of renovations into your purchase.

Buying a property and including the cost of renovations into the mortgage is available through a program called purchase plus improvements. When purchasing a home, you can add the cost of home upgrades into your mortgage, making it a great option if you can’t find something move-in ready and aren’t afraid to do a little work!

But while this sounds simple enough, in all honestly, it’s quite the process. There are some pretty strict rules to follow, but nothing that you can’t handle with the guidance of an independent mortgage professional.

Here’s a quick overview of the process. Firstly, you must provide quotes to the lender ahead of time for the work you would like to complete. It’s good to note that the renovations will have to increase the value of the property accordingly. From there, the lender doesn’t give you the money to do the upgrades; you have to come up with that yourself. However, once the work has been completed and verified by an appraiser, the lender will reimburse you and include the money in your mortgage.

This program isn’t for everyone. Buying a home is a stressful endeavour in and of itself. The added stress of having to undertake renovations right away might not be a good idea. But then again, if you have the financial wherewithal to handle the cost of renovations and like the idea of making it yours from the start, then this might be just the option you’ve been looking for!

Please connect directly; it would be a pleasure to walk through the exact process and outline what securing a purchase plus improvements would look like for you!

How to Handle Missed Payments

Wed, 27 Nov 2024 09:00:01 GMT

If you’ve missed a payment on your credit card or line of credit and you’re wondering how to handle things and if this will impact your creditworthiness down the road, this article is for you.

Getting up to date as quickly as possible will mitigate the damage to your credit score. The worst thing you can do is bury your head in the sand and ignore the problem, because it won’t go away.

Porting Your Mortgage

Wed, 20 Nov 2024 09:00:02 GMT

Porting your mortgage is when you transfer the remainder of your current mortgage term, outstanding principal balance, and interest rate to a new property if you’re selling your existing home and buying a new one.

Now, despite what some big banks would lead you to believe, porting your mortgage is not an easy process. It’s not a magic process that guarantees you will qualify to purchase a new property using the mortgage you had on a previous property.

In addition to re-qualifying for the mortgage you already have, the lender will also assess the property you’re looking to purchase. Many moving parts come into play. You’re more likely to have significant setbacks throughout the process than you are to execute a flawless port. Here are some of the reasons:

You may not qualify for the mortgage

Let’s say you’re moving to a new city to take a new job. If you’re relying on porting your mortgage to buy a new property, you’ll have to substantiate your new income. If you’re on probation or changed professions, there’s a chance the lender will decline your application. Porting a mortgage is a lot like qualifying for a new mortgage, just with more conditions.

The property you are buying has to be approved

So let’s say that your income isn’t an issue and that you qualify for the mortgage. The subject property you want to purchase has to be approved as well. Just because the lender accepted your last property as collateral for the mortgage doesn’t mean the lender will accept the new property. The lender will require an appraisal and scrutinize the condition of the property you’re looking to buy.

Property values are rarely the same

Chances are, if you’re selling a property and buying a new one, there’ll be some price difference. When looking to port a mortgage, if the new property’s value is higher than your previous property, requiring a higher mortgage amount, you’ll most likely have to take a blended rate on the new money, which could increase your payment. If the property value is considerably less, you might incur a penalty to reduce the total mortgage amount.

You still need a downpayment

Porting a mortgage isn’t just a simple case of swapping one property for another while keeping the same mortgage. You’re still required to come up with a downpayment on the new property.

You’ll most likely have to pay a penalty

Most lenders will charge the total discharge penalty when you sell your property and take it from the sale proceeds. The penalty is then refunded when you execute the port and purchase the new property. So if you are relying on the proceeds of sale to come up with your downpayment, you might have to make other arrangements.

Timelines rarely work out

When assessing the housing market, It’s usually a buyer’s market or a seller’s market, not both at the same time. So although you may be able to sell your property overnight, you might not be able to find a suitable property to buy. Alternatively, you may be able to find many suitable properties to purchase while your house sits on the market with no showings.

And, chances are, when you end up selling your property and find a new property to buy, the closing dates rarely match up perfectly.

Different lenders have different port periods

Understanding that different lenders have different port periods is where the fine print in the mortgage documents comes into play. Did you know that depending on the lender, the time you have to port your mortgage can range from one day to six months? So if it’s one day, your lawyer will have to close both the sale of your property and the purchase of your new property on the same day, or the port won’t work.

Or, with a more extended port period, you run the risk of selling your house with the intention of porting the mortgage, only to not be able to find a suitable property to buy.

So while the idea of porting your mortgage can seem like a good idea, and it might even make sense if you have a low rate that you want to carry over to a property of similar value, it’s always a good idea to get professional mortgage advice and look at all your options.

While porting your mortgage is a nice feature to have because it provides you with options, please understand that it is not a guarantee that you’ll be able to swap out properties and keep making the same payments. There’s a lot to know.

If you’re looking to sell your existing property and buy a new one, please connect anytime. It would be a pleasure to walk you through the process and help you consider all your options, including a port if that makes the most sense!

Why Downpayment Source Matters

Wed, 13 Nov 2024 08:30:00 GMT

Anti-money laundering

Lenders care about your downpayment source because, legally, they have to. To prevent money laundering, lenders have to document the source of the downpayment on every home purchase.

Acceptable forms of downpayment are money from your resources, borrowed funds through an insured program called the FlexDown, or money you receive as a gift from an immediate family member.

Financial suitability

Lenders care about the source of the downpayment because it is an indicator that you are financially able to purchase the property.

Downpayment establishes the loan to value (LTV)

Understanding a Spousal Buyout Mortgage

Wed, 06 Nov 2024 09:00:03 GMT

If you’re going through or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property and buy out your ex-spouse.

It’s called the spousal buyout program. Here are some of the common questions people have about the program.

Is a finalized separation agreement required?

Yes. To qualify, you’ll need to provide the lender with a copy of the signed separation agreement, which clearly outlines asset allocation.

Can the net proceeds be used for home renovations or pay off loans?

No. The net proceeds can only buy out the other owner’s share of equity and/or pay off joint debt as explicitly agreed upon in the finalized separation agreement.

What is the maximum amount that you can access through the program?

What is the maximum permitted loan to value?

Do all parties have to be on title?

Yes. All parties to the transaction have to be current registered owners on title. Your solicitor will be required to confirm this with a title search.

Do the parties have to be a married or common-law couple?

Is a full appraisal required?

Yes. When considering this type of mortgage, a physical appraisal of the property is required as part of the necessary documents to finalize the transaction.

Construction Assignments

Wed, 30 Oct 2024 08:00:01 GMT

The good news is, there are lenders available exclusively through the broker channel that have favourable policies for assignment purchases.

Here are some of the highlights:

All standard purchase qualifications apply, including applicable income verification, established credit, and required downpayment
Assignments can be at the original purchase price or current market value
Minimum 620 beacon score with no previous bankruptcies or consumer proposals
The full downpayment must come from the purchaser and not include any incentives from the seller.

Bank of Canada Rate Announcement Oct 23rd, 2024

Wed, 23 Oct 2024 14:30:12 GMT

Bank of Canada reduces policy rate by 50 basis points to 3¾%.

FOR IMMEDIATE RELEASE

Read the October 23rd, 2024 Monetary Report.

October 23, 2024

The Bank of Canada today reduced its target for the overnight rate to 3¾%, with the Bank Rate at 4% and the deposit rate at 3¾%. The Bank is continuing its policy of balance sheet normalization.

The Bank continues to expect the global economy to expand at a rate of about 3% over the next two years. Growth in the United States is now expected to be stronger than previously forecast while the outlook for China remains subdued. Growth in the euro area has been soft but should recover modestly next year. Inflation in advanced economies has declined in recent months, and is now around central bank targets. Global financial conditions have eased since July, in part because of market expectations of lower policy interest rates. Global oil prices are about $10 lower than assumed in the July Monetary Policy Report (MPR).

In Canada, the economy grew at around 2% in the first half of the year and we expect growth of 1¾% in the second half. Consumption has continued to grow but is declining on a per person basis. Exports have been boosted by the opening of the Trans Mountain Expansion pipeline. The labour market remains soft—the unemployment rate was at 6.5% in September. Population growth has continued to expand the labour force while hiring has been modest. This has particularly affected young people and newcomers to Canada. Wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.

GDP growth is forecast to strengthen gradually over the projection horizon, supported by lower interest rates. This forecast largely reflects the net effect of a gradual pick up in consumer spending per person and slower population growth. Residential investment growth is also projected to rise as strong demand for housing lifts sales and spending on renovations. Business investment is expected to strengthen as demand picks up, and exports should remain strong, supported by robust demand from the United States.

Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026. As the economy strengthens, excess supply is gradually absorbed.

CPI inflation has declined significantly from 2.7% in June to 1.6% in September. Inflation in shelter costs remains elevated but has begun to ease. Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services. The drop in global oil prices has led to lower gasoline prices. These factors have all combined to bring inflation down. The Bank’s preferred measures of core inflation are now below 2½%. With inflationary pressures no longer broad-based, business and consumer inflation expectations have largely normalized.

The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out. The upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.

With inflation now back around the 2% target, Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range. If the economy evolves broadly in line with our latest forecast, we expect to reduce the policy rate further. However, the timing and pace of further reductions in the policy rate will be guided by incoming information and our assessment of its implications for the inflation outlook. We will take decisions one meeting at a time. The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.

Information note

The next scheduled date for announcing the overnight rate target is December 11, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on January 29, 2025.

New 2025 Program Allows Homeowners to Refinance Up to 90% for Secondary Suites: What You Need to Know

Fri, 18 Oct 2024 22:03:01 GMT

On October 8, 2024, the government announced a new program that will take effect on January 15, 2025, allowing homeowners to refinance up to 90% of their home’s value to create secondary suites. This is a significant increase from the current refinancing limit of 80%. The program aims to provide homeowners with more flexibility to unlock their home equity and add additional legal units like basement suites or laneway homes, provided they meet municipal zoning requirements and are not used for short-term rentals.

The program comes with specific guidelines, outlined by CMHC (Canada Mortgage and Housing Corporation), that include:

Eligibility: Homeowners must already own their property, live in one of the existing units, and plan to add additional fully self-contained suites.
Refinancing Details: Homeowners can refinance up to 90% of the property's value, including the value added by the new units. The maximum property value, once the new units are built, must not exceed $2 million.
Loan Parameters: The loan-to-value limit will be 90%, and the maximum amortization period is 30 years. Any additional financing must not exceed project costs.

To give an example, under this new program, if a home is valued at $800,000, homeowners could now refinance up to $720,000 for building a secondary suite—$80,000 more than the previous limit of $640,000.

This program could be particularly beneficial for homeowners who have recently purchased their property and built up a moderate amount of equity, offering them an opportunity to create an income-generating suite or expand their home without needing to sell. As housing affordability continues to be a pressing issue in many parts of Canada, adding secondary suites could also contribute to easing the rental supply shortage.

While this program represents a significant step forward in unlocking home equity for homeowners, we are still awaiting specific guidelines from lenders. These rules will clarify how lenders will approach refinancing applications under this program. Stay tuned for further updates as more information becomes available from financial institutions.

This program is expected to spark significant interest, particularly from younger homeowners or those with growing families, as it offers a pathway to enhance both living space and long-term financial stability. Homeowners looking to leverage this new opportunity should consult with mortgage experts to fully understand the potential benefits and ensure they are making informed decisions.

If you're interested in how this program could benefit you or want to explore refinancing options to add a secondary suite, get in touch with a mortgage professional today.

Understanding Payment Frequency

Wed, 16 Oct 2024 08:00:00 GMT

The following looks at the different types of payment frequencies and how they impact your mortgage.

Here are the six payment frequency types

Monthly payments – 12 payments per year
Semi-Monthly payments – 24 payments per year
Bi-weekly payments – 26 payments per year
Weekly payments – 52 payments per year
Accelerated bi-weekly payments – 26 payments per year
Accelerated weekly payments – 52 payments per year

So let’s use a $1000 payment as the example:

Monthly payments formula: $1000/1 with 12 payments per year. A payment of $1000 is made once per month for a total of $12,000 paid per year.

Semi-monthly formula: $1000/2 with 24 payments per year. A payment of $500 is paid twice per month for a total of $12,000 paid per year.

Bi-weekly formula: $1000 x 12 / 26 with 26 payments per year. A payment of $461.54 is made every second week for a total of $12,000 paid per year.

Accelerated bi-weekly formula: $1000/2 with 26 payments per year. A payment of $500 is made every second week for a total of $13,000 paid per year.

The payments for accelerated weekly payments work the same way. It’s just that you’d be making 52 payments a year instead of 26.

By choosing an accelerated option for your payment frequency, you lower the overall cost of borrowing by making small extra payments as part of your regular payment schedule.

If you’d like to look at some of the numbers as they relate to you and your mortgage, please don’t hesitate to connect anytime; it would be a pleasure to work with you.

Protect Yourself at Renewal

Wed, 09 Oct 2024 08:00:01 GMT

It’s a commonly held belief that if you’ve made your mortgage payments on time throughout the entirety of your mortgage term, that the lender is somehow obligated to renew your mortgage.

Now, granted, most lenders are happy to renew your mortgage, but several factors could come into play to prevent this from happening, including the following:

You’ve missed mortgage payments over the term.
The lender becomes aware that you’ve recently claimed bankruptcy.
The lender becomes aware that you’re going through a separation or divorce.
The lender becomes aware that you lost your job.
Someone on the initial mortgage contract has passed away.
The lender no longer likes the economic climate and/or geographic location of your property.
The lender is no longer licensed to lend money in Canada.

Again, while most lenders are happy to renew your mortgage at the end of the term, you need to understand that they are not under any obligation to do so.

So how do you protect yourself?

The Property Matters in Mortgage Financing

Wed, 02 Oct 2024 08:00:01 GMT

OSFI Announces Removal of Stress Test for Uninsured Mortgage Switches

Mon, 30 Sep 2024 17:56:41 GMT

Starting November 21, 2024, borrowers switching lenders with uninsured mortgages will no longer face the stress test, thanks to a new policy from OSFI. Previously, uninsured borrowers needed to prove they could afford their mortgage at a higher rate, which created barriers to switching for better terms. This change encourages competition among lenders and aligns the rules with insured mortgages, providing more flexibility and choice for homeowners.

The decision responds to concerns raised by the Competition Bureau and reflects shifting risk management trends in the mortgage market.

Key Points:

Applies to Straight Switches: This policy is for borrowers switching lenders while maintaining their loan amount and amortization schedule.
Stress Test Removed: No more proving affordability at higher rates during switches, allowing for easier access to competitive offers.
Supports Borrower Flexibility: Homeowners now have more options to find the best mortgage rates at renewal without the stress test obstacle.

Why the Change?

OSFI initially maintained the stress test to manage risk but has now reversed this stance after evaluating that the original concerns have not significantly materialized. This move is designed to balance fairness for borrowers and enhance competition in the mortgage market.

How It Affects You

For those with uninsured mortgages approaching renewal, this policy change is a win. You'll now have the opportunity to seek out better mortgage rates without facing a stress test, making it easier to reduce financial strain, especially in a rising interest rate environment.

Stay informed and take advantage of these changes by reviewing your mortgage options today!

Getting a Mortgage While on Parental Leave

Wed, 25 Sep 2024 08:00:00 GMT

Chances are if the title of this article piqued your interest enough to get you here, your family is probably growing. Congratulations!

The advantage of working with an independent mortgage professional is choice. You have a choice between lenders and mortgage products, including lenders who use 100% of your return-to-work income.

To qualify, you’ll need an employment letter from your current employer that states the following:

Your employer’s name preferably on the company letterhead
Your position
Your initial start date to ensure you’ve passed any probationary period
Your scheduled return to work date
Your guaranteed salary

If you have any questions about this or anything else mortgage-related, please connect anytime. It would be a pleasure to work with you.

Bridge Financing and Deposit Lending

Wed, 18 Sep 2024 08:00:01 GMT

But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in.

A firm sale is the key to securing bridge financing and a deposit loan.

So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.

New Mortgage Rules Make Homeownership More Affordable for Canadians

Tue, 17 Sep 2024 19:24:44 GMT

As of August 1, 2024, the federal government introduced changes to support homebuyers, particularly Millennials and Gen Z. First-time homebuyers purchasing new builds can now access 30-year insured mortgage amortizations , reducing monthly payments and making it easier to afford a home.

Additionally, as of December 15, 2024, several major reforms will take effect:

The price cap for insured mortgages will rise from $1 million to $1.5 million, helping more Canadians qualify for mortgages with less than 20% down.
30-year amortizations will be available to all first-time homebuyers and buyers of new builds , including condominiums. This expansion will incentivize new housing supply, addressing the country’s housing shortage and making homeownership more accessible.

These reforms are part of a broader housing strategy that includes the Canadian Mortgage Charter , which enables insured mortgage holders to switch lenders without undergoing a new stress test at renewal. This promotes competition among lenders, ensuring more Canadians can access better mortgage deals.

In addition to these housing measures, the government has introduced the Renters' Bill of Rights and the Home Buyers' Bill of Rights to protect Canadians from unfair practices, ensure transparency in leases and sales, and simplify homebuying procedures. With $5 billion available through the Canada Housing Infrastructure Fund , the federal government is working with provinces and territories to make housing fairer and more accessible for all Canadians.

Stay tuned for further updates, and if you’re planning to buy a home or need more information, book a call with me to learn how these new rules can benefit you!

New Mortgage Rules and CMHC Updates: A Guide for First-Time Buyers

Tue, 17 Sep 2024 19:23:51 GMT

In Budget 2024, the Canadian government introduced significant changes to help first-time homebuyers by extending mortgage amortization periods up to 30 years for those purchasing newly built homes. Effective August 1, 2024, this change will help ease monthly mortgage payments, making homeownership more accessible.

Key Eligibility Criteria for First-Time Buyers:

First-Time Buyer Status: At least one borrower must qualify as a first-time homebuyer, meaning they have either never owned a home, haven't lived in a home they owned in the past four years, or recently went through a marriage breakdown.
Newly Built Homes: The property must be a newly constructed home that has never been occupied.

These extended mortgages will only apply to high-ratio mortgages (loans covering more than 80% of the home’s purchase price) and are limited to owner-occupied properties. All other mortgage insurance eligibility criteria remain unchanged.

CMHC’s New Amortization Rules for Market MLI and MLI Select Programs

The Canada Mortgage and Housing Corporation (CMHC) has also introduced changes. As of June 19, 2024, the maximum amortization period for new construction market projects will increase from 40 years to 50 years. Additionally, the maximum period for re-amortization (for default management) will extend to 55 years for loans under the MLI Select Program.

These changes aim to encourage the construction of more rental housing units while managing housing affordability. CMHC’s modifications also include updates to energy efficiency criteria, lowering the maximum points from 100 to 50 based on energy efficiency, which means developers may need to shift focus toward affordable units to receive maximum benefits.

Changes to "Use of Funds" and Refinancing

CMHC has lifted restrictions on how refinanced funds can be used, reverting to pre-2020 rules. This allows non-approved lenders to offer bridge loans, creating more flexibility in financing options.

Environmental Site Contamination Policies

In response to industry practices, CMHC is reviewing its environmental site contamination policies. For now, projects with known site contamination will be accepted under conditional approval, pending a contamination-free site confirmation.

Why These Changes Matter

For first-time homebuyers, the ability to spread mortgage payments over 30 years is a welcome relief in today’s housing market, particularly for newly built homes. These changes are designed to improve housing affordability and supply, especially for younger Canadians looking to purchase their first home.

Meanwhile, CMHC’s new rules around extended amortizations and energy efficiency adjustments will have a significant impact on developers, especially those focused on building rental properties or using energy-efficient technologies in their projects.

If you're considering buying a home or developing a property, these changes could impact your strategy. To fully understand how these updates may apply to your situation, it's important to consult with a mortgage expert who can offer personalized advice.

Want to know how these changes could affect your home buying or property development plans? Book a call with a mortgage expert today to explore your options!

Getting a Mortgage After Bankruptcy

Wed, 11 Sep 2024 08:15:01 GMT

Sometimes life throws you a financial curveball. Bankruptcy and consumer proposals happen. It doesn’t mean your life is over, and it doesn’t mean you won’t ever qualify for a mortgage again.

So if you’re thinking about getting a mortgage post-bankruptcy, lenders will want answers to the following questions:

How long have you been discharged?

Have you established new credit?

How much do you have available for a downpayment?

What is your total debt service ratio?

Conventional or insured financing.

If you’re looking to get the best mortgage products available, here are some of the things a lender will want to see:

You’ve been discharged for at least two years plus a day.
You’ve established your credit (as listed above).
You have at least 5% down for the first $500k of the purchase and 10% down for anything over $500k.
If you don’t have a 20% downpayment, you will be required to secure mortgage insurance through CMHC, Sagen (formerly Genworth), or Canada Guaranty.
The cost to service the property and all your debts don’t exceed 44% of your gross income.

Alternative lending

Get in touch anytime.

Bank of Canada Rate Announcement Sept 4th, 2024

Wed, 04 Sep 2024 14:21:41 GMT

Bank of Canada reduces policy rate by 25 basis points to 4¼%.

FOR IMMEDIATE RELEASE

September 4, 2024

The Bank of Canada today reduced its target for the overnight rate to 4¼%, with the Bank Rate at 4½% and the deposit rate at 4¼%. The Bank is continuing its policy of balance sheet normalization.

The global economy expanded by about 2½% in the second quarter, consistent with projections in the Bank’s July Monetary Policy Report (MPR). In the United States, economic growth was stronger than expected, led by consumption, but the labour market has slowed. Euro-area growth has been boosted by tourism and other services, while manufacturing has been soft. Inflation in both regions continues to moderate. In China, weak domestic demand weighed on economic growth. Global financial conditions have eased further since July, with declines in bond yields. The Canadian dollar has appreciated modestly, largely reflecting a lower US dollar. Oil prices are lower than assumed in the July MPR.

In Canada, the economy grew by 2.1% in the second quarter, led by government spending and business investment. This was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July. The labour market continues to slow, with little change in employment in recent months. Wage growth, however, remains elevated relative to productivity.

As expected, inflation slowed further to 2.5% in July. The Bank’s preferred measures of core inflation averaged around 2 ½% and the share of components of the consumer price index growing above 3% is roughly at its historical norm. High shelter price inflation is still the biggest contributor to total inflation but is starting to slow. Inflation also remains elevated in some other services.

With continued easing in broad inflationary pressures, Governing Council decided to reduce the policy interest rate by a further 25 basis points. Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and some other services are holding inflation up. Governing Council is carefully assessing these opposing forces on inflation. Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information Note

The next scheduled date for announcing the overnight rate target is October 23, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Mortgage Options for Older Canadians

Wed, 28 Aug 2024 08:00:00 GMT

So if you find yourself in the position where you’re considering your mortgage options into retirement, you’ve come to the right place.

Here are some options available to older Canadians as they plan for mortgage financing through their retirement.

Standard Mortgage Financing

Reverse Mortgage Financing

Home Equity Line of Credit (HELOC)

Private Financing

If you have any questions about securing mortgage financing for your retirement, please connect anytime. It would be a pleasure to work with you and walk you through all your options.

Can you Trust Online Mortgage Calculators?

Wed, 21 Aug 2024 08:00:01 GMT

If you rely on the numbers from a “What can I afford” or “Mortgage Qualification” calculator without talking to an independent mortgage professional, you’re going to be misinformed.

Please connect anytime if you’d like to talk more about your financial situation and get a preapproval started. It would be a pleasure to work with you.

Protect Your Credit Through a Divorce

Wed, 14 Aug 2024 08:00:01 GMT

Manage Your Joint Debt

Manage Your Bank Accounts

Setup New Credit in Your Name

If you have any questions about managing your credit through a divorce, please don’t hesitate to connect anytime. It would be a pleasure to work with you.

Understanding your Employment Status

Wed, 07 Aug 2024 08:00:00 GMT

So, regardless of how you feel about your position, it’s what can be proven on paper that matters most. Let’s walk through some of the common ways lenders can look at employment status.

Permanent Employment

Probationary Period

Parental Leave

Term Contracts

In summary

Standard or Collateral Charge Mortgage. What’s best for you?

Wed, 31 Jul 2024 10:00:14 GMT

When arranging mortgage financing, your mortgage lender will register your mortgage in one of two ways. Either with a standard charge mortgage or a collateral charge mortgage. Let’s look at the differences between the two.

Standard charge mortgage

This is your good old-fashioned mortgage. A standard charge mortgage is the mortgage you most likely think about when you consider mortgage financing. Here, the amount you borrow from the lender is the amount that is registered against the title to protect the lender if you default on your mortgage.

When your mortgage term is up, you can either renew your existing mortgage or, if it makes more financial sense, you can switch your mortgage to another lender. As long as you aren’t changing any of the fine print, the new lender will usually cover the cost of the switch.

A standard charge mortgage has set terms and is non-advanceable. This means that if you need to borrow more money, you'll need to reapply and requalify for a new mortgage. So there will be costs associated with breaking your existing mortgage and costs to register a new one.

Collateral charge mortgage

A collateral charge mortgage is a mortgage that can have multiple parts, usually with a re-advanceable component. It can include many different financing options like a personal loan or line of credit. Your mortgage is registered against the title in a way that should you need to borrow more money down the line; you can do so fairly easily.

A home equity line of credit is a good example of a collateral charge mortgage.

Unlike a standard charge mortgage, here, your lender will register a higher amount than what you actually borrow. This could be for the property's full value, or some lenders will go up to 125% of your property's value.

In the future, if the value of your property appreciates, with a collateral charge mortgage, you don't have to rewrite your existing mortgage to borrow more money (assuming you qualify). This will save you from any costs associated with breaking your existing mortgage and registering a new one.

However, if you’re looking to switch your mortgage to another lender at the end of your term, you might be forced to discharge your mortgage and incur legal fees. Also, by registering your mortgage with a collateral charge, you potentially limit your ability to secure a second mortgage.

So what’s a better option for you?

Well, there are benefits and drawbacks to both. Finding the best option for you really depends on your financial situation and what you believe gives you the most flexibility. This is probably a question better handled in a conversation rather than in an article.

With that said, undoubtedly, the best option is to work with an independent mortgage professional. It’s our job to understand the intricacies of mortgage financing, listen to and assess your needs, and recommend the best mortgage to meet your needs. As we work with many lenders, we can provide you with options. Don’t get stuck dealing with a single institution that may only offer you a collateral charge mortgage when what you need is a standard charge mortgage.

So if you’d like to have a conversation about mortgage financing, please get in touch. It would be a pleasure to work with you and answer any questions you might have.

Bank of Canada Rate Announcement Jul 24th, 2024

Wed, 24 Jul 2024 14:23:19 GMT

Bank of Canada reduces policy rate by 25 basis points to 4½%.

FOR IMMEDIATE RELEASE

Read the July 24th, 2024 Monetary Policy Report

July 24, 2024

The Bank of Canada today reduced its target for the overnight rate to 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank is continuing its policy of balance sheet normalization.

The global economy is expected to continue expanding at an annual rate of about 3% through 2026. While inflation is still above central bank targets in most advanced economies, it is forecast to ease gradually. In the United States, the anticipated economic slowdown is materializing, with consumption growth moderating. US inflation looks to have resumed its downward path. In the euro area, growth is picking up following a weak 2023. China’s economy is growing modestly, with weak domestic demand partially offset by strong exports. Global financial conditions have eased, with lower bond yields, buoyant equity prices, and robust corporate debt issuance. The Canadian dollar has been relatively stable and oil prices are around the levels assumed in April’s Monetary Policy Report (MPR).

In Canada, economic growth likely picked up to about 1½% through the first half of this year. However, with robust population growth of about 3%, the economy’s potential output is still growing faster than GDP, which means excess supply has increased. Household spending, including both consumer purchases and housing, has been weak. There are signs of slack in the labour market. The unemployment rate has risen to 6.4%, with employment continuing to grow more slowly than the labour force and job seekers taking longer to find work. Wage growth is showing some signs of moderating, but remains elevated.

GDP growth is forecast to increase in the second half of 2024 and through 2025. This reflects stronger exports and a recovery in household spending and business investment as borrowing costs ease. Residential investment is expected to grow robustly. With new government limits on admissions of non-permanent residents, population growth should slow in 2025.

Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026. The strengthening economy will gradually absorb excess supply through 2025 and into 2026.

CPI inflation moderated to 2.7% in June after increasing in May. Broad inflationary pressures are easing. The Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm. Shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation. Inflation is also elevated in services that are closely affected by wages, such as restaurants and personal care.

The Bank’s preferred measures of core inflation are expected to slow to about 2½% in the second half of 2024 and ease gradually through 2025. The Bank expects CPI inflation to come down below core inflation in the second half of this year, largely because of base year effects on gasoline prices. As those effects wear off, CPI inflation may edge up again before settling around the 2% target next year.

With broad price pressures continuing to ease and inflation expected to move closer to 2%, Governing Council decided to reduce the policy interest rate by a further 25 basis points. Ongoing excess supply is lowering inflationary pressures. At the same time, price pressures in some important parts of the economy—notably shelter and some other services—are holding inflation up. Governing Council is carefully assessing these opposing forces on inflation. Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is September 4, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on October 23, 2024.

What Banks Won’t Tell You About Mortgage Financing

Wed, 17 Jul 2024 10:00:12 GMT

If you’re looking to buy a property or have a mortgage up for renewal, and you’re thinking about connecting with your bank directly, save yourself a lot of money and regret by reading this article first.

Here are four things that your bank won’t tell you, accompanied by four reasons that explain why working with an independent mortgage professional is in your best interest.

Banks have Limited Access to Mortgage Products.

Now, while this one may seem pretty straightforward, if you’re dealing with a single institution, they can only offer mortgages from their product catalogue. This means that you’ll be restricted to their qualifications which are usually very narrow. Working with a single institution significantly limits your options, especially if your financial situation isn’t straightforward.

In contrast, dealing with an independent mortgage professional, you will have access to products from over 200 lenders, including banks, monoline lenders, credit unions, finance companies, alternative lenders, institutional B lenders, Mortgage Investment Corporations, and private funds. Working with an independent mortgage professional will give you considerably more options to secure a better mortgage.

Banks Employ Salespeople, not Mortgage Experts.

Banks don’t employ mortgage experts; they employ salespeople. Banks pay and incentivize salespeople to sell their products. There is a fundamental misalignment of values here. If the bank incentivizes a banker to make a profit for the bank, how can they at the same time advocate for you and your best interest? They can’t.

Banks don’t have your best interest in mind. In fact, the more money they make off of you, the better it is for their bottom line.

However, when you work with an independent mortgage professional, you get the experience of someone who understands the intricacies of mortgage financing and will advocate on your behalf to get you the best mortgage. It’s actually in our best interest to assist you in finding the mortgage with the best terms for you.

Once your mortgage completes, we get paid a standardized finder’s fee by the lender for arranging the financing. So although we get paid by the lender, that lender has had to compete with other lenders to earn your business.

When you work with an independent mortgage professional, everyone wins. You get the best mortgage available, we get paid a standardized finder’s fee, and the lender gets a new borrower.

Banks Rarely Offer You Their Best Terms Upfront.

Banks are in the business of making money, and they’re usually pretty good at it. As such, banks will rarely offer you their best terms at the outset of your negotiation.

This is especially true if you’re looking to refinance your existing mortgage. With over half of Canadians simply accepting the renewal offer they get sent in the mail without question, banks don’t have to put their best rate forward. Instead, they rely on you to be ignorant of the process and will take advantage of your trust in them.

When you work with an independent mortgage professional, we don’t play games with rates and terms. Our goal is always to seek out the lender who has the best mortgage for you from the start of the process, and if there are any negotiations to be had, we handle them for you. There is no reason for us to do otherwise. In fact, the better we do our job, the more likely it is that you’ll be happy with our services and refer your friends and family.

Banks Promote Restrictive Mortgage Products.

As if it’s not bad enough that banks don’t offer their best terms upfront, they actually promote mortgage products that are restrictive in nature. The fine print in your mortgage contract matters; understanding it is challenging. Banks do what they can to make it hard for you to leave.

Now, if you’ve ever heard stories of outrageous penalties being charged, this is what’s called an Interest Rate Differential penalty (IRD). Each lender has its own way of calculating the IRD. Chartered banks are known for their restrictive mortgages and high IRD penalties.

When you work with an independent mortgage professional, we take the time to listen to your goals and assess your mortgage needs based on your life circumstances.

The best mortgage is the one that lowers your overall cost of borrowing. So not only will we walk through the cost of the mortgage financing, but we’ll also clearly outline the costs incurred should you need to break your mortgage before the end of your term. This might be the deciding factor in choosing the right lender and mortgage for you.

Working with an Independent Mortgage Professional is in Your Best Interest.

Banks have limitations to the mortgage products they offer. Working with an independent mortgage professional gives you mortgage options!

Bankers work for the bank; they are incentivized to make money for the bank. An independent mortgage professional advocates on your behalf to get you the best mortgage available.

Banks rarely offer their best terms upfront; they leave negotiations up to you. An independent mortgage professional outlines the best terms from multiple lenders at the start of the process.

Banks promote restrictive mortgage products that make it difficult to leave them. An independent mortgage broker will outline all the costs associated with different mortgage products and recommend the mortgage best suited for your needs.

So if you’d like to talk about the best mortgage product for you, you’ve come to the right place. Please connect anytime. It would be a pleasure to work with you.

4 Signs You’re Ready for Homeownership

Wed, 10 Jul 2024 10:00:14 GMT

Buying your first home is a big deal. And while you may feel like you’re ready to take that step, here are 4 things that will prove it out.

1. You have at least 5% available for a downpayment.

To buy your first home, you need to come up with at least 5% for a downpayment. From there, you’ll be expected to have roughly 1.5% of the purchase price set aside for closing costs.

If you’ve saved your downpayment by accumulating your own funds, it means you have a positive cash flow which is a good thing. However, if you don’t quite have enough saved up on your own, but you have a family member who is willing to give you a gift to assist you, that works too.

2. You have established credit.

Building a credit score takes some time. Before any lender considers you for mortgage financing, they want to see that you have an established history of repaying the money you’ve already borrowed. Typically two trade lines, for a period of two years, with a minimum amount of $2000, should work!

Now, if you’ve had some credit issues in the past, it doesn’t mean you aren’t ready to be a homeowner. However, it might mean a little more planning is required! A co-signor can be considered here as well.

3. You have the income to make your mortgage payments. And then some.

If you’re going to borrow money to buy a house, the lender wants to make sure that you have the ability to pay it back. Plus interest. The ideal situation is to have a permanent full-time position where you’re past probation. Now, if you rely on any inconsistent forms of income, having a two-year history is required.

A good rule of thumb is to keep the costs of homeownership to under a third of your gross income, leaving you with two-thirds of your income to pay for your life.

4. You’ve discussed mortgage financing with a professional.

Buying your first home can be quite a process. With all the information available online, it’s hard to know where to start. While you might feel ready, there are lots of steps to take; way more than can be outlined in a simple article like this one.

So if you think you’re ready to buy your first home, the best place to start is with a preapproval! Let's discuss your financial situation, talk through your downpayment options, look at your credit score, assess your income and liabilities, and ultimately see what kind of mortgage you can qualify for to become a homeowner!

Please connect anytime; it would be a pleasure to work with you!

Finance Your Home Renovations

Wed, 03 Jul 2024 10:00:13 GMT

If you’re looking to do some home renovations but don’t have all the cash up front to pay for materials and contractors, here are a few ways to use mortgage financing to bring everything together.

Existing Home Owners - Mortgage Refinance

Probably the most straightforward solution, if you’re an existing homeowner, would be to access home equity through a mortgage refinance.

Depending on the terms of your existing mortgage, a mid-term mortgage refinance might make good financial sense; there’s even a chance of lowering your overall cost of borrowing while adding the cost of the renovations to your mortgage.

As your financial situation is unique, it never hurts to have the conversation, run the numbers, and look at your options. Let’s talk!

If you're not in a huge rush, it might be worth waiting until your existing term is up for renewal. This is a great time to refinance as you won’t incur a penalty to break your existing mortgage.

Now, regardless of when you refinance, mid-term or at renewal, you’re able to access up to 80% of the appraised value of your home, assuming you qualify for the increased mortgage amount.

Home Equity Line of Credit

Instead of talking with a bank about an unsecured line of credit, if you have significant home equity, a home equity line of credit (HELOC) could be a better option for you.

An unsecured line of credit usually comes with a pretty high rate. In contrast, a HELOC uses your home as collateral, allowing the lender to give you considerably more favourable terms.

There are several different ways to use a HELOC, so if you’d like to talk more about what this could look like for you, connect anytime!

Buying a Property - Purchase Plus Improvements

If you’re looking to purchase a property that could use some work, some lenders will allow you to add extra money to your mortgage to cover the cost of renovations. This is called a purchase plus improvements. The key thing to keep in mind is that the renovations must increase the value of the property. There is a process to follow and a lot of details to go over, but we can do this together.

So if you’d like to discuss using your mortgage to cover the cost of renovating your home, please connect anytime!

Fixed-Rate or Variable-Rate Mortgage?

Wed, 26 Jun 2024 10:00:28 GMT

If you're looking to buy a new property, refinance, or renew an existing mortgage, chances are, you're considering either a fixed or variable rate mortgage. Figuring out which one is the best is entirely up to you! So here's some information to help you along the way.

Firstly, let's talk about the fixed-rate mortgage as this is most common and most heavily endorsed by the banks. With a fixed-rate mortgage, your interest rate is "fixed" for a certain term, anywhere from 6 months to 10 years, with the typical term being five years. If market rates fluctuate anytime after you sign on the dotted line, your mortgage rate won't change. You're a rock; your rate is set in stone. Typically a fixed-rate mortgage has a higher rate than a variable.

Alternatively, a variable rate is not set in stone; instead, it fluctuates with the market. The variable rate is a component (either plus or minus) to the prime rate. So if the prime rate (set by the government and banks) is 2.45% and the current variable rate is Prime minus .45%, your effective rate would be 2%. If three months after you sign your mortgage documents, the prime rate goes up by .25%, your rate would then move to 2.25%. Typically, variable rates come with a five-year term, although some lenders allow you to go with a shorter term.

At first glance, the fixed-rate mortgage seems to be the safe bet, while the variable-rate mortgage appears to be the wild card. However, this might not be the case. Here's the problem, what this doesn't account for is the fact that a fixed-rate mortgage and a variable-rate mortgage have two very different ways of calculating the penalty should you need to break your mortgage.

If you decide to break your variable rate mortgage, regardless of how much you have left on your term, you will end up owing three months interest, which works out to roughly two to two and a half payments. Easy to calculate and not that bad.

With a fixed-rate mortgage, you will pay the greater of either three months interest or what is called an interest rate differential (IRD) penalty. As every lender calculates their IRD penalty differently, and that calculation is based on market fluctuations, the contract rate at the time you signed your mortgage, the discount they provided you at that time, and the remaining time left on your term, there is no way to guess what that penalty will be. However, with that said, if you end up paying an IRD, it won't be pleasant.

If you've ever heard horror stories of banks charging outrageous penalties to break a mortgage, this is an interest rate differential. It's not uncommon to see penalties of 10x the amount for a fixed-rate mortgage compared to a variable-rate mortgage or up to 4.5% of the outstanding mortgage balance.

So here's a simple comparison.

A fixed-rate mortgage has a higher initial payment than a variable-rate mortgage but remains stable throughout your term. The penalty for breaking a fixed-rate mortgage is unpredictable and can be upwards of 4.5% of the outstanding mortgage balance.

A variable-rate mortgage has a lower initial payment than a fixed-rate mortgage but fluctuates with prime throughout your term. The penalty for breaking a variable-rate mortgage is predictable at 3 months interest which equals roughly two and a half payments.

The goal of any mortgage should be to pay the least amount of money back to the lender. This is called lowering your overall cost of borrowing. While a fixed-rate mortgage provides you with a more stable payment, the variable rate does a better job of accommodating when "life happens."

If you’ve got questions, connect anytime. It would be a pleasure to work through the options together.

Mortgage Advice to Help You Through a Separation

Wed, 19 Jun 2024 10:00:18 GMT

With the latest stats claiming that about half of marriages end in divorce and with around three-quarters of Canadians being homeowners, it’s important to know how to handle your mortgage if you decide to separate. Here’s a quick list of things to consider.

Keep making your payments.

A mortgage is a legally binding contract between you and the lender. It doesn’t take marriage into account. If your name appears on the mortgage, you're responsible for making sure the regular payments are made. A marital breakdown does not give you an excuse not to make your mortgage payments.

If, during your marriage, you've relied on your spouse to make the mortgage payments and you aren’t certain payments are being made after separating, it's in your best interest to contact the lender directly to verify your mortgage is being paid. If payments aren't being made, it could affect your credit score or worse; the lender could start foreclosure proceedings.

There is always a financial cost to break your mortgage.

When working through how to split your finances, you decided to either refinance your mortgage, remove someone from the title, or sell the property, keep in mind that you will incur legal costs.

If you’re in the middle of a term, the penalty for breaking your mortgage might be significant, especially if you have a fixed-rate mortgage. It’s certainly worth contacting your mortgage lender directly to verify the cost of breaking your mortgage. Having that information accessible when writing out your separation agreement will provide increased clarity.

Listing your marital status as separated or divorced.

When completing a mortgage application for securing new mortgage financing, when you list your marital status as separated or divorced, you can expect that a lender will want to see your legal separation agreement or your divorce papers. The lender wants to make sure you aren’t responsible for support payments. So if you haven’t finalized the paperwork, expect delays in securing mortgage financing.

It could be harder to qualify for a new mortgage.

With the separation of assets also comes the separation of incomes. If you qualified for your existing mortgage on a double income, you might find it hard to maintain the same quality of lifestyle post-separation.

This is where careful planning comes in. Working closely with your independent mortgage professional will ensure you understand exactly where you stand. You’ll want to put together a plan for how to handle the mortgage on the matrimonial home.

Purchasing the matrimonial home from your ex.

There are special considerations given to people going through a separation to buy out the matrimonial home. Instead of looking at the transaction like a refinance where you can only borrow up to 80% of the property’s value, lenders will consider one spouse buying out the other up to a 95% loan to value ratio. This comes in handy when dividing assets and liabilities.

Navigating the ins and outs of mortgage financing isn’t something you have to do alone. If you're going through a separation and you’d like to discuss all your mortgage options, please connect anytime. It would be a pleasure to walk you through the process.

What is a Second Mortgage?

Wed, 12 Jun 2024 10:00:19 GMT

If you're not all that familiar with the ins and outs of mortgage financing, the term "second mortgage" might cause a bit of confusion. Many people incorrectly assume that a second mortgage is arranged when your first term is up for renewal or when you sell your first home. They think that the next mortgage you get is your "second mortgage." This is not the case.

A second mortgage is an additional mortgage on a single property, not the second mortgage you get in your lifetime.

When you borrow money to buy a house, your lawyer or notary will register your mortgage on the property title in what is called first position. This means that your mortgage lender has the first claim against the sale proceeds if you sell your property. If you happen to default on your mortgage, this is the security the lender has in repossessing your property. A second mortgage falls in behind the first mortgage on your property title.

When you sell your property, the lawyers will use the sale proceeds to pay off your mortgages in sequence, the first position mortgage is paid out first, and the second mortgage is paid out second. After both mortgages are paid off completely, you get the remaining equity.

When you secure a second mortgage, you continue making payments on your first mortgage as per your mortgage agreement. You must also then fulfill the terms of the second mortgage.

So why would you want a second mortgage? Well, a second mortgage comes in handy when you're looking to access some of your home equity, but you either have excellent terms on your first mortgage that you don't want to break, or you’d incur a huge penalty to break your first mortgage. Instead of refinancing the first mortgage, a second mortgage can be a better option.

A second mortgage is often used as a short-term debt consolidation tool to help provide you with better cash flow. If you’ve accumulated a considerable amount of high-interest unsecured debt, and you have equity in your home, you can secure a second mortgage to lower your overall cost of borrowing.

If you'd like to know more about how a second mortgage works, or if you'd like to discuss anything related to mortgage financing, please connect anytime!

Bank of Canada Rate Announcement Jun 5th, 2024

Wed, 05 Jun 2024 14:21:09 GMT

Bank of Canada reduces policy rate by 25 basis points.

FOR IMMEDIATE RELEASE

June 5, 2024

The Bank of Canada today reduced its target for the overnight rate to 4¾%, with the Bank Rate at 5% and the deposit rate at 4¾%. The Bank is continuing its policy of balance sheet normalization.

The global economy grew by about 3% in the first quarter of 2024, broadly in line with the Bank’s April Monetary Policy Report (MPR) projection. In the United States, the economy expanded more slowly than was expected, as weakness in exports and inventories weighed on activity. Growth in private domestic demand remained strong but eased. In the euro area, activity picked up in the first quarter of 2024. China’s economy was also stronger in the first quarter, buoyed by exports and industrial production, although domestic demand remained weak. Inflation in most advanced economies continues to ease, although progress towards price stability is bumpy and is proceeding at different speeds across regions. Oil prices have averaged close to the MPR assumptions, and financial conditions are little changed since April.

In Canada, economic growth resumed in the first quarter of 2024 after stalling in the second half of last year. At 1.7%, first-quarter GDP growth was slower than forecast in the MPR. Weaker inventory investment dampened activity. Consumption growth was solid at about 3%, and business investment and housing activity also increased. Labour market data show businesses continue to hire, although employment has been growing at a slower pace than the working-age population. Wage pressures remain but look to be moderating gradually. Overall, recent data suggest the economy is still operating in excess supply.

CPI inflation eased further in April, to 2.7%. The Bank’s preferred measures of core inflation also slowed and three-month measures suggest continued downward momentum. Indicators of the breadth of price increases across components of the CPI have moved down further and are near their historical average. However, shelter price inflation remains high.

With continued evidence that underlying inflation is easing, Governing Council agreed that monetary policy no longer needs to be as restrictive and reduced the policy interest rate by 25 basis points. Recent data has increased our confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain. Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is July 24, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Unsure About the Housing Market? Let's Talk.

Wed, 29 May 2024 10:00:17 GMT

If you’ve been thinking about buying a property, whether that be your first home, next home, forever home, or a home to retire into, the current state of the Canadian economy might have you wondering: Is this really the right time to make a move? There is certainly no shortage of doom and gloom in the news out there.

The truth is, that’s a tough question to answer in the best of times. It’s nearly impossible to know for sure what’s going to happen next with the housing market in Canada. It could heat up or it could cool down.

So here’s some advice. Instead of basing your buying decision entirely on external market factors, like the economy or housing market, consider looking for the answers internally. When you stop looking at the market to determine your timing to buy a home, and instead examine the personal reasons you have for wanting to buy a home, the picture can become much clearer.

Here are some questions to consider. Although they are subjective, they will help bring you clarity. Ask yourself:

Does buying a property now put me in a better financial position?
Do I make enough money now to afford a new home and maintain my lifestyle?
Do I feel confident with my current employment status?
Have I saved enough money for a down payment?
How long do I plan on living in this new home?
Is there any scenario where I might have to sell quickly and potentially lose money?
Does buying a property now move me closer to my life goals?
Do I really want to buy now or am I just feeling a lot of pressure to just buy something?
Am I holding back because I'm scared property prices might drop soon?

There’s no doubt that buying a home can be stressful, but it doesn’t have to be. Having a plan in place is the best course of action to help you make good decisions and alleviate that stress.

If you’d like to have a conversation to discuss your plans, ask some questions, and map out what buying a home looks like for you, we can address many of the unknowns together.

The best place to start is to work through a mortgage pre-approval. There is no cost for this service, you’ll learn exactly what you can qualify for, and it will provide a lot of clarity about your situation.

You might decide that it’s best to wait before buying, and that’s just fine. You might find that now’s a perfect time for you to buy! If you'd like to talk, please connect anytime. You’re not in this alone. We can work through everything together.

Improving Your Credit Score

Wed, 22 May 2024 10:00:02 GMT

Your credit score and how you manage credit are huge factors in qualifying for a mortgage. If you want the best interest rates and mortgage products available on the market, you want a high credit score. Here are a few things you can do to improve your credit score.

Make all your payments on time.

Making your payments on time is so important; in fact, it might just be the most important factor in managing your credit.

Here's how credit works. When you borrow money from a lender, you agree to make payments with interest on a set schedule until the debt is repaid in full. Good credit is established and maintained by making your payments on time. However, If you break the terms of that schedule by not making your payments, the lender will report the missed payments to the credit reporting agencies, and your credit score suffers. It’s that simple.

The more payments you miss, the lower your score will be. If you fail to make payments for over 120 days, the lender will most likely send your debt to be recovered by a collection agency. Collections stay on your report for a long time.

So the moment you realize you have missed a payment or as soon as you have the money for it, make the payment. If something prevents you from making a payment, consider contacting the lender directly to let them know what happened and work out an arrangement to make the payment as soon as possible.

It's good to note that lenders only report late payments after a payment is 30 days late. If you miss a payment on a Friday and catch it the following Monday, you won't have anything to worry about - except maybe an NSF fee.

Now, just because payments don't report until being 30 days late, don’t get comfortable with making late payments; the best advice is to pay your debts on time, as agreed.

Stop acquiring new credit.

If you already have at least two different trade lines, you shouldn’t acquire new trade lines just for the sake of it. Of course, if you need to borrow money, like to purchase a vehicle to commute to work, go ahead and apply. Just remember: having more credit available to you doesn’t really help your credit score. In fact, each time a potential lender looks at your credit report, it may lower your credit score a little bit.

With that said, if you already have two different trade lines and your lender offers you an increase on your limit, take it. A credit card with a $10k limit is better for you than a credit card with a $2k limit because how much you spend compared to your credit card's limit impacts your credit score. This leads us directly into the next point.

Keep a reasonable balance.

The more credit you use compared to the limit you have, the less creditworthy you appear. It’s better to carry a reasonable balance (15-25% of the card’s limit) and pay it off each month than to max out your credit cards and just make the minimum payments. If you have to spend more than 25% of your card limit, try to remain under 60%. That shows good utilization. Paying down your credit cards every month and carrying a zero balance will undoubtedly improve your credit score.

Check your credit report regularly.

Did you know that roughly 20% of credit reports have misinformation on them? Mistakes happen all the time. Lenders misreport information, or people with the same names get merged reports. Any number of things could be inaccurate without you knowing about it. You might even have become a victim of fraud or identity theft.

By checking your credit regularly, you can stay on top of everything and correct any errors promptly. Both of Canada's credit reporting agencies, Equifax and Transunion, have programs that, for a small fee, will monitor and update you on any changes made to your credit report.

Handle collections immediately.

When checking your credit report for accuracy, if you happen to find a collection has been registered against you, deal with it immediately. It could be a closed-out cell phone account with a small balance owing, a final utility bill that got missed, unpaid parking tickets, wage garnishments, or spousal support payments. Regardless of what it is, it will harm your credit score if it's registered on your credit report. The best plan of action is to handle any collections or delinquent accounts as soon as possible.

Use your credit card.

If you have acquired credit cards to build your credit score, but you rarely use them, there is a chance the lender might not report your usage, and that won’t help your credit score. You'll want to make sure that you use your credit at least once every three months. Many people find success using their credit cards for gas and groceries and paying off the outstanding balance each month.

There you have it. Regardless of what your credit looks like now, you will continue to increase your credit score if you follow the points outlined above.

If you're looking to buy a property and you’d like to work through your credit report in detail, let’s put together a plan to get you qualified for a mortgage. Get in touch anytime; it would be a pleasure to work with you!

How To Establish New Credit

Wed, 15 May 2024 10:00:14 GMT

If you’re new to managing personal finance and you want to learn about credit, you’ve come to the right place. Establishing new credit is a bit of a catch-22. To build a credit history, you need credit. But it’s hard to get credit without having a credit history. So, where do you start?

Well, the first thing you should know is that building credit takes time. It’s not something that happens overnight. If you’re looking to secure mortgage financing, you will want to have a minimum of two trade lines (credit cards, loans, or lines of credit) with a minimum limit of $2500, reporting for at least two years.

If you don’t have any credit yet, the best time to get started is right now. However, that may be difficult because, as we've already identified, without a credit history, most lenders won’t feel confident about taking a chance on you. What’s the solution? Consider a secured credit card.

With a secured credit card, you make a deposit upfront that matches the amount you want to borrow. A reasonable amount would be $1000 deposited on a single secured credit card. You then use your secured credit card to make household purchases and regular utility payments, paying off the total balance each month. If you default on the money borrowed for whatever reason, the lender will retain the money you put up as collateral.

When looking for a secured credit card, be sure to ask whether they report to the two nationwide credit bureaus, Equifax and TransUnion. If the credit card company doesn't report, the credit card account will be useless for your purposes; move on until you find a company that reports to both credit bureaus.

Once your secured credit card begins reporting to the credit bureaus, you begin to have a credit score; usually, this takes about three months. Now you can start to seek out a second trade line in the form of an unsecured credit card. Don’t forget to ensure that this card reports to both of the credit reporting agencies. Another option at this point could be a car loan. From here, you simply want to make all your payments on time!

But what happens if you’re looking to secure mortgage financing before you have a fully established credit report?

Well, if you have someone who would consider co-signing, you can certainly go that route. The mortgage application will depend on their income and credit report, but your name will be on the mortgage. Hopefully, when the mortgage is up for renewal, you’ll have the established credit required to remove them from the mortgage and qualify on your own.

Although establishing credit takes a minimum of two years, it really begins with putting together a plan. If you’d like to discuss anything credit or mortgage-related, please get in touch!

4 Ways to Access Your Home Equity

Wed, 08 May 2024 10:00:09 GMT

If you've been a homeowner for many years, it is likely your property value has increased significantly. One advantage of homeownership is the opportunity to build equity. Home equity growth, partnered with the security of living in your own home, is why most Canadians believe homeownership is the best choice for them!

While home equity is one of your greatest assets, accessing home equity is often overlooked when putting together a comprehensive financial plan. So if you’re looking for a way to access some of your home equity, you’ve come to the right place!

Simply put, home equity is the actual market value of your property minus what you owe. For instance, if your home has a market value of $650k and you owe $150k, you have $500k in home equity.

If you want to stay in your home but also access the equity you have built up over the years, there are four options to consider.

Conventional Mortgage Refinance

Assuming you qualify for the mortgage, most lenders will allow you to borrow up to 80% of your property’s value through a conventional refinance.

Let’s say your property is worth $500k and you owe $300k on your existing mortgage. If you were to refinance up to 80%, you would qualify to borrow $400k. After paying out your first mortgage of $300k, you’d end up with $100k (minus any fees to break your mortgage) to spend however you like.

Even if you paid off your mortgage years ago and own your property with a clear title (no mortgage), you can secure a new mortgage on your property.

Reverse Mortgage

A reverse mortgage allows Canadian homeowners 55 or older to turn the equity in their home into tax-free cash. There is no income or credit verification; you maintain ownership of your home, and you aren't required to make any mortgage payments. The full amount of the mortgage will become due when you decide to move or sell.

Unlike a conventional mortgage refinance, reverse mortgages won’t allow you to borrow up to 80% of your home equity. Rather, you can access a lesser amount of equity depending on your age.

The interest rates on a reverse mortgage can be slightly higher than the best rates currently being offered through standard mortgage financing. However, the difference is not outrageous, and this is an option worth considering as the benefits of freeing up cash without mortgage payments provides you with increased flexibility.

Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit allows you to set up access to the equity you have in your home but only pay interest if you use it. Qualifying for a HELOC may be challenging as lender criteria can be pretty strict. Unlike a conventional mortgage, a HELOC doesn't usually have an amortization, so you're only required to make the interest payments on the amount you've borrowed.

Second Position Mortgage

If the cost to break your mortgage is really high, but you need access to cash before your existing mortgage renews, consider a second mortgage.

A second mortgage typically has a set amount of time in which you have to repay the loan (term) as well as a fixed interest rate. This rate is usually higher than conventional financing. After you have received the loan proceeds, you can spend the money any way you like, but you will need to make regular payments on the second mortgage until it's paid off.

If you’re looking for a way to access the equity in your home to free up some cash, please get in touch. You’ve got options, and we can work together to find the best option for you!

Interest Rate Cut Speculation Heats Up!

Mon, 06 May 2024 18:26:25 GMT

Rate cut speculation is heating up! We wanted to touch on a few things in regard to the big “interest rate conversation”. Yes, the Bank of Canada will very likely start cutting the Bank of Canada rate this summer (perhaps as soon as next month). This will immediately impact Variable Rate mortgage holders. Currently, the prime lending rate is 7.20% meaning a 0.25% rate cut by the BOC should mean that banks will follow suit and cut prime to 6.95%. The US jobs numbers on Friday have improved the odds of a predicted BOC bank cut. This week rate watchers will be focused on the Canadian numbers (due out on Friday May 10th). Economists that we follow speculate that the current fixed rates are already pricing in the BOC’s first two cuts. This means that a cut in June or July may not impact fixed rates at all. The cut will narrow the spread between fixed and variable. If history is a predictor, this chart we created illustrates this where the green line will simply drop, narrowing the gap between prime, fixed and variable.

Here's what we know right now:

“When the probability of next-meeting rate cuts exceeds 60%, it's safe to start feeling confident about near-term easing. As we speak, we're at 74% for the BoC's June 5 meeting. So, if not June, it may be Christmas in July for Canadian borrowers.” Robert McLister, Mortgage Logic News May 3, 2034

For mortgage holders up for renewal and buyers entering the market, the big question right now is fixed or variable? Short term or lock in for 3 years? Or set it and forget it at 5 years?

We now have one lender offering a short term promo of Prime minus 1.01% for a variable rate. Is this the right move to ride the BOC cuts down? Fixed rates for shorter terms are still over 6% and the three-year and five-year terms are in the mid to low 5’s.

What should borrowers be choosing? This is a very personal decision and will depend on personal goals, budgets, risk tolerance and time horizon for holding the mortgage.

We have some fancy tools that can help with the decision make process. Here’s one example where we compared a $500,000 Mortgage taking a 3-year fixed at 5.44% (renewing into a Variable in 3 years) versus the 5-year variable at 6.29% and modelling 0.25% rate cuts as follows: in 2 cuts in 2024, 2 cuts in 2025, 1 cut in 2026 and 1 cut in 2027.

In this case, the 3-year fixed rate “wins” but the savings is minimal. There are many factors to consider here including that taking the higher variable rate now would mean that this borrower qualifies for a lower mortgage amount (stress testing at 8.19% instead of 7.44%). Of course, the other BIG factor is that we are guessing that prime will drop and at the pace we have modelled out.

All this is to say that the rate conversation is a complicated. We love helping borrowers make informed decisions about their mortgage choice whether they are buying or they are renewing. If you have questions or want us to run some numbers, please reach out.

How to Save Money for a Downpayment

Wed, 01 May 2024 10:00:12 GMT

Whether you want to set aside money to buy a car or take a vacation, save up for a down payment on a property, or plan for your retirement, the principles are the same.

However, as you’re reading this article on a website dedicated to helping you secure mortgage financing, we’ll assume you want tips on how to save for a down payment!

The key to saving money is getting clarity - clarity around your income and your expenses, developing and following a clear plan, and seeking help from professionals who can help you see the big picture as well as the details. Although this might seem fundamental, sometimes going back to basics is the best place to start.

Assess your income.

If your goal is to save money, you’ll need to identify just how much money you’ve got to work with! The best way to do this is to write everything down. This could be with paper and a pen or on a spreadsheet; whichever way works best for you is fine. The goal is to have all your income in front of you!

If you’re on a fixed income or receive a salary for work, your calculations might be pretty simple. Use the income you actually take home, not your gross income. Include an average of your variable income sources like tips, overtime, bonuses, or shift differentials. You should also include other income sources like an annual tax return, and child tax or other government benefits.

Spend time to make an exhaustive list of all your income sources.

Track your expenses.

Once you’ve identified what you have to work with on the income side, the next step is to figure out just how much you actually spend to maintain your current lifestyle.

Start by identifying regular bills, then look at your discretionary spending. If you have a budget already in place, you should be able to identify these numbers easily. If not, you can expect that getting clarity around your expenses will be very enlightening. It will be helpful to look through a few months’ worth of bank statements to see just how much money you actually spend.

Information is the key to finding clarity. The more information you have, the more equipped you will be to save money. Just like your income, write down all your expenses. This will allow you to assess and reprioritize where you spend your money.

Develop and follow a plan.

Once you have a clear picture of your income and expenses, you need to figure out how to make more money than you spend. Although that sounds so simple, it really isn’t. The majority of Canadians incur debt because they spend more money than they make. This is why saving money can be so hard.

But if we’re going back to basics, remember this: if you’re spending more money than you're making, you need to either increase your income or decrease your expenses to start saving money. There are countless money-saving strategies on the internet; consider following a few financial bloggers, and have fun learning about what works best for you!

Seek help from professionals.

You’re probably here to learn about how to save money for a down payment because you want to buy a home soon. If that's the case, be assured you're in the right place. Putting together a plan to secure mortgage financing is one plan you don't have to make on your own.

As independent mortgage professionals, it’s our job to help you navigate all aspects of mortgage financing. Just like saving for a down payment is about managing income and expenses, so is getting a mortgage. Income and expenses, along with credit and property, are what a lender looks at when assessing your suitability for a mortgage.

So while you might assume that putting together a plan to save for a down payment is where you should start, it might not actually be the best place to start. Saving money takes time, and while you're doing that, there are many other things you could be doing at the same time, like building credit to increase your chances of qualifying for a mortgage sooner.

When you’re ready to assess your financial situation and put together a plan to save for a down payment and get into a mortgage sooner, please get in touch. It would be a pleasure to work with you.

An Overview of the Home Buying Process

Wed, 24 Apr 2024 10:00:17 GMT

If you’re in the early stages of planning to buy either your first home or your next home, you’ve come to the right place! Even if you’ve been through it before, the home buying process can be daunting, but it doesn’t have to be when you have the right people on your side!

The purpose of this article is to share a high-level view of the home buying process. Obviously, the finer details can be addressed once you’ve submitted an application for pre-approval. But for now, here are some of the answers to general questions you may have as you work through your early preparations.

Are you credit-worthy?

Having an established credit profile is essential when applying for a mortgage. For your credit to be considered established, you’ll want to have a minimum of two trade lines (credit cards, loans, or lines of credit) with a minimum limit of $2500, reporting for a period of at least two years.

From there, you’ll want to make sure that your debt repayment is as close to flawless as possible. Think of it this way: Why would a lender want to lend you money if you don’t have a history of timely repayment on the loans you already have? Making your payments on time, as agreed, is crucial.

We all know, however, that mistakes can happen and payments might get missed. If that's the case, it’s best to catch up as quickly as possible! Late payments only register on your credit report if you're past due by 30 days.

How will you make your mortgage payments?

When providing you with a mortgage, lenders are trusting you with a lot of money. They'll want to feel really good about your ability to pay that money back, over an agreed period of time, with interest.

The more stable your employment, the better chances you have of securing mortgage financing. Typically, you’ll want to be employed in a permanent position or have your income averaged over a period of two years. If you’re self-employed, expect to provide a lot more documentation to substantiate your income.

How much skin do you have in the game?

If you're borrowing money to buy a home, you’re going to have to bring some money to the table. The best down payment comes from accumulating your own funds supported by documents proving a 90-day history in your bank account. Other down payment sources, such as a gift from a family member or proceeds from another property sale, are completely acceptable.

In Canada, 5% down is the minimum requirement. However, depending on the purchase price, it might be more. Also, you need to be aware that you will likely have to prove access to at least 1.5% of the purchase price to be allocated for closing costs.

How much can you afford?

Here’s the thing. What you can afford on paper and what you can afford in real life are often very different amounts. Just because you feel you can afford the proposed mortgage payments, know that you will have to substantiate everything through documentation.

The amount you actually qualify to borrow is based on many factors, certainly too many to list in an article designed to provide you with an overview of the home buying process. However, with that said, it’s never too early in the home buying process to seek professional advice. Our services come at no cost to you; it would be our pleasure to help.

Working with an independent mortgage professional will allow you to assess your credit-worthiness, provide insight on how a lender will view your income, help you plan for a down payment, and nail down exactly how much you can afford to borrow. And if you need help putting together a plan to improve your financial situation, we can do that too.

If you’d like to discuss your financial situation and put together a plan to secure mortgage financing, please get in touch!

A First Home Savings Account (FHSA)

Thu, 18 Apr 2024 23:35:22 GMT

What is an FHSA?

Reasons to Invest in an FHSA:

Save up to $40,000 for your first home.
Contribute tax-free for up to 15 years.
Carry over unused contribution room to the next year, up to a maximum of $8,000.
Potentially reduce your tax bill and carry forward undeducted contributions indefinitely.
Pay no taxes on investment earnings.
Complements the Home Buyers’ Plan (HBP).

How Does an FHSA Work?

Open Your FHSA: Start investing tax-free by opening your FHSA.
Contribute Often: Make tax-deductible contributions of up to $8,000 annually to help your money grow faster.
Withdraw for Your Home: Make a tax-free withdrawal at any time to purchase your first home.

Benefits of an FHSA:

Tax-Deductible Contributions: Contribute up to $8,000 annually, reducing your taxable income.
Tax-Free Earnings: Enjoy tax-free growth on your investments within the FHSA.
No Taxes on Withdrawals: Pay $0 in taxes on withdrawals used to buy a qualifying home.

Numbers to Know:

$8,000: Annual tax-deductible FHSA contribution limit.
$40,000: Lifetime FHSA contribution limit.
$0: Taxes on FHSA earnings when used for a qualifying home purchase.

In Conclusion

Understanding the Recent Housing Affordability Measures in Canada

Thu, 18 Apr 2024 23:34:32 GMT

Increased Home Buyer's Plan (HBP) Withdrawal Limit

Extended Repayment Period for HBP Withdrawals

30-Year Mortgage Amortizations for Newly Built Homes

Changes to the Canadian Mortgage Charter

GDS/TDS Ratios Explained

Wed, 17 Apr 2024 10:00:15 GMT

One of the major qualifiers lenders look at when considering your application for mortgage financing is your debt service ratios.

Now, before we get started, if you prefer to have someone walk through these calculations with you, assess your financial situation, and let you know exactly where you stand, let’s connect. There is no use in dusting off the calculator and running the numbers yourself when we can do it for you!

However, if you’re someone who likes to know the nitty-gritty of how things work instead of simply accepting that's just the way it is, this article is for you. But be warned, there are a lot of mortgage words and some math ahead; with that out of the way, let’s get started!

“Debt servicing” is the measure of your ability to meet all of your financial obligations. There are two ratios that lenders examine to determine whether you can debt service a mortgage.

The first is called the “gross debt service” ratio, or GDS, which is the percentage of your monthly household income that covers your housing costs. The second is called the “total debt service” ratio, or TDS, which is the percentage of your monthly household income covering your housing costs and all your other debts.

GDS is your income compared to the cost of financing the mortgage, including your proposed mortgage payments (principal and interest), property taxes, and heat (PITH), plus a percentage of your condo fees (if applicable).

Here’s how to calculate your GDS.

Principal + Interest + Taxes + Heat / Gross Annual Income

Your TDS is your income compared to your GDS plus the payments made to service any existing debts. Debts include car loans, line of credit, credit card payments, support payments, student loans, and anywhere else you’re contractually obligated to make payments.

Here’s how to calculate your TDS.

Principal + Interest + Taxes + Heat + Other Debts / Gross Annual Income

With the calculations for those ratios in place, the next step is to understand that each lender has guidelines that outline a maximum GDS/TDS. Exceeding these guidelines will result in your mortgage application being declined, so the lower your GDS/TDS, the better.

If you don’t have any outstanding debts, your GDS and TDS will be the same number. This is a good thing!

The maximum ratios vary for conventional mortgage financing based on the lender and mortgage product being offered. However, if your mortgage is high ratio and mortgage default insurance is required, the maximum GDS is 39% with a maximum TDS of 44%.

So how does this play out in real life? Well, let’s say you’re currently looking to purchase a property with a payment of $1700/mth (PITH), and your total annual household income is $90,000 ($7500/mth). The calculations would be $1700 divided by $7500, which equals 0.227, giving you a gross debt service ratio of 22.7%.

A point of clarity here. When calculating the principal and interest portion of the payment, the Government of Canada has instituted a stress test. It requires you to qualify using the government's qualifying rate (which is higher), not the actual contract rate. This is true for both fixed and variable rate mortgages.

Now let’s continue with the scenario. Let’s say that in addition to the payments required to service the property, you have a car payment of $300/mth, child support payments of $500/mth, and between your credit cards and line of credit, you’re responsible for another $700/mth. In total, you pay $1500/mth. So when you add in the $1700/mth PITH, you arrive at a total of $3200/mth for all of your financial obligations. $3200 divided by $7500 equals 0.427, giving you a total debt service ratio of 42.7%.

Here’s where it gets interesting. Based on your GDS alone, you can easily afford the property. But when you factor in all your other expenses, the TDS exceeds the allowable limit of 42% (for an insured mortgage anyway). So why does this matter? Well, as it stands, you wouldn’t qualify for the mortgage, even though you are likely paying more than $1700/mth in rent.

So then, to qualify, it might be as simple as shuffling some of your debt to lower payments. Or maybe you have 10% of the purchase price saved for a downpayment, changing the mortgage structure to 5% down and using the additional 5% to pay out a portion of your debt might be the difference you need to bring it all together.

Here’s the thing, as your actual financial situation is most likely different than the one above, working with an independent mortgage professional is the best way to give yourself options. Don’t do this alone. Your best plan is to seek and rely on the advice provided by an experienced independent mortgage professional. While you might secure a handful of mortgages over your lifetime, we do this every day with people just like you.

It’s never too early to start the conversation about mortgage qualification. Going over your application and assessing your debt service ratios in detail beforehand gives you the time needed to make the financial moves necessary to put yourself in the best financial position.

So if you find yourself questioning what you can afford or if you want to discuss your GDS/TDS ratios to understand the mortgage process a little better, please get in touch. It would be a pleasure to work with you, we can get a preapproval started right away.

Bank of Canada Rate Announcement Apr 10th, 2024

Wed, 10 Apr 2024 14:26:54 GMT

Bank of Canada maintains policy rate, continues quantitative tightening.

FOR IMMEDIATE RELEASE

Read the April 10th, 2024 Monetary Policy Report

April 10, 2024

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

The Bank expects the global economy to continue growing at a rate of about 3%, with inflation in most advanced economies easing gradually. The US economy has again proven stronger than anticipated, buoyed by resilient consumption and robust business and government spending. US GDP growth is expected to slow in the second half of this year, but remain stronger than forecast in January. The euro area is projected to gradually recover from current weak growth. Global oil prices have moved up, averaging about $5 higher than assumed in the January Monetary Policy Report (MPR). Since January, bond yields have increased but, with narrower corporate credit spreads and sharply higher equity markets, overall financial conditions have eased.

The Bank has revised up its forecast for global GDP growth to 2¾% in 2024 and about 3% in 2025 and 2026. Inflation continues to slow across most advanced economies, although progress will likely be bumpy. Inflation rates are projected to reach central bank targets in 2025.

In Canada, economic growth stalled in the second half of last year and the economy moved into excess supply. A broad range of indicators suggest that labour market conditions continue to ease. Employment has been growing more slowly than the working-age population and the unemployment rate has risen gradually, reaching 6.1% in March. There are some recent signs that wage pressures are moderating.

Economic growth is forecast to pick up in 2024. This largely reflects both strong population growth and a recovery in spending by households. Residential investment is strengthening, responding to continued robust demand for housing. The contribution to growth from spending by governments has also increased. Business investment is projected to recover gradually after considerable weakness in the second half of last year. The Bank expects exports to continue to grow solidly through 2024.

Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026. The strengthening economy will gradually absorb excess supply through 2025 and into 2026.

CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs. Core measures of inflation, which had been running around 3½%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2½% in the second half, and reach the 2% inflation target in 2025.

Based on the outlook, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months. The Council will be looking for evidence that this downward momentum is sustained. Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is June 5, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on July 24, 2024.

Should You Get Pre-approved For A Mortgage?

Wed, 03 Apr 2024 10:00:00 GMT

If you’re thinking about buying a property, but you’re not sure where to start, you’ve come to the right place! Let’s discuss how getting pre-approved is one of the first steps in your home buying journey.

Just like you wouldn’t go into a restaurant without knowing if you have enough money to buy your meal, it’s not a good idea to be shopping for a home without an understanding of how much you can afford. You can browse MLS from your couch all you want beforehand, but when you’re ready to start looking at properties with a real estate agent, you need a pre-approval.

Now, as there may be some confusion around exactly what a pre-approval does and doesn’t do, let’s discuss it in detail. First of all, a pre-approval is not magic, and it’s not binding. A pre-approval is not a contract that will guarantee mortgage financing despite changes to your financial situation. Instead, a pre-approval is simply the first look at your overall financial health that will point you in the right direction before you’re ready to apply for a mortgage.

Said in another way, a pre-approval is a map that gives you the plan to secure an actual approval. After going through the pre-approval process, you’ll know how to qualify for a mortgage and at what amount.

When considering your mortgage application, lenders look at your income, credit history, assets vs liabilities, and the property itself. Working through a pre-approval will cover all these areas and will uncover any major obstacles that might be in your way of securing financing.

The best time to secure a pre-approval is as soon as possible; it’s never a bad idea to have a plan. Here are a few of the obstacles that a pre-approval can uncover:

You’ve recently changed jobs, and you’re still on probation
Your income relies heavily on extra shifts or commissions
You’re unaware of factual mistakes or collections on your credit report
You don’t have an established credit profile
You don’t have enough money saved for a downpayment
Additional debt is lowering the amount you qualify for
Really anything you don't know that you don't know

Even if you believe you have all your ducks in a row, working through the pre-approval process with an independent mortgage professional will ensure you have the best chance of securing a final approval. As a point of clarity, a pre-approval is not the same as a pre-qualification. This is not typing a few things into a website, calculating some numbers, and thinking you’re all set. A pre-approval includes providing your financial information, looking at your credit report, discussing a plan for securing mortgage financing with a mortgage professional, and even submitting documents ahead of time.

Mortgage financing can be a daunting process; it doesn’t have to be. Having a plan in place and doing as much as you can beforehand is essential to ensuring a smooth home buying experience. As there is no cost for getting a mortgage pre-approval, there is absolutely no risk. Consider starting the process right now!

If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Will Collections Impact Your Mortgage?

Wed, 27 Mar 2024 10:00:01 GMT

A question that comes up from time to time when discussing mortgage financing is, “If I have collections showing on my credit bureau, will that impact my ability to get a mortgage?” The answer might have a broader implication than what you might think; let's spend a little time discussing it.

Collections accounts are reported on your credit bureau when you have a debt that hasn’t been paid as agreed. Now, regardless of the reason for the collection; the collection is a result of delinquency, it’s an account you didn’t realize was in collections, or even if it’s a choice not to pay something because of moral reasons, all open collections will negatively impact your ability to secure new mortgage financing.

Delinquency

If you’re really late on paying on a loan, credit card, line of credit, or mortgage, and the lender has sent that account to collections, as they consider it a bad debt, this will certainly impact your ability to get new mortgage financing. Look at it this way, why would any lender want to extend new credit to you when you have a known history of not paying your existing debts as agreed?

If you happen to be late on your payments and the collection agencies are calling, the best plan would be to deal with the issue head-on. Settle the debts as quickly as possible and work towards establishing your credit. Very few (if any) lenders will even consider your mortgage application with open collections showing on your credit report.

If you’re unaware of bad debts

It happens a lot more than you’d think; people applying for a mortgage are completely unaware that they have delinquent accounts on their credit report. A common reason for this is that collection agencies are hired simply because the lender can’t reach someone.

Here’s an example. Let’s say you’re moving from one province to another for work, you pay the outstanding balance on your utility accounts, change your phone number, and make the move. And while you think you’ve paid the final amount owing, they read your meter, and there is $32 outstanding on your bill. As the utility company has no way of tracking you down, they send that amount to an agency that registers it on your credit report. You don't know any of this has happened and certainly would have paid the amount had you known it was due.

Alternatively, with over 20% of credit reports containing some level of inaccuracy, mistakes happen. If you’ve had collections in the past, there’s a chance they might be reporting inaccurately, even if it's been paid out.

So as far as your mortgage is concerned, it really doesn’t matter if the collection is a reporting error or a valid collection that you weren’t aware of. If it’s on your credit report, it’s your responsibility to prove it’s been remediated. Most lenders will accept documentation proving the account has been paid and won’t require those changes to reflect on your credit report before proceeding with a mortgage application.

So how do you know if you’ve got mistakes on your credit report? Well, you can either access your credit reports on your own or talk with an independent mortgage advisor to put together a mortgage preapproval. The preapproval process will uncover any issues holding you back. If there are any collections on your bureau, you can implement a plan to fix the problem before applying for a mortgage.

Moral Collections

What if you have purposefully chosen not to pay a collection, fine, bill, or debt for moral reasons? Or what if that account is sitting as an unpaid collection on your credit report because you dispute the subject matter?

Here are a few examples.

A disputed phone or utility bill
Unpaid alimony or child support
Unpaid collections for traffic tickets
Unpaid collections for COVID-19 fines

The truth is, lenders don’t care what the collection is for; they just want to see that you’ve dealt with it. They will be reluctant to extend new mortgage financing while you have an active collection reporting on your bureau.

So if you decide to take a moral stand on not paying a collection, please know that you run the risk of having that moral decision impact your ability to secure a mortgage in the future.

If you have any questions about this or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you!

3 Questions To Ask Yourself Before Listing Your Home!

Wed, 20 Mar 2024 10:00:00 GMT

Deciding to list your home for sale is a big decision. And while there are many reasons you might want/need to sell, here are 3 questions you should ask yourself; and have answers to, before taking that step.

What is my plan to get my property ready for sale?

Assessing the value of your home is an important first step. Talking with a real estate professional will help accomplish that. They will be able to tell you what comparable properties in your area have sold for and what you can expect to sell your property for. They will also know specific market conditions and be able to help you put a plan together.

But as you’re putting together that plan, here are a few discussion points to work through. A little time/money upfront might increase the final sale price.

Declutter and depersonalize
Minor repairs
A fresh coat of interior/exterior paint
New fixtures
Hire a home stager or designer
Exterior maintenance
Professional pictures and/or virtual tour

But then again, these are all just considerations; selling real estate isn’t an exact science. Current housing market conditions will shape this conversation. The best plan of action is to find a real estate professional you trust, ask a lot of questions, and listen to their advice.

What are the costs associated with selling?

Oftentimes it’s the simple math that can betray you. In your head, you do quick calculations; you take what you think your property will sell for and then subtract what you owe on your mortgage; the rest is profit! Well, not so fast. Costs add up when selling a home. Here is a list of costs you’ll want to consider.

Real estate commissions (plus tax)
Mortgage discharge fees and penalties
Lawyer’s fees
Utilities and property tax account settlements
Hiring movers and/or storage fees

Having the exact figures ahead of time allows you to make a better decision. Now, the real wildcard here is the potential mortgage penalty you might pay if you break your existing mortgage. If you need help figuring this number out, get in touch!

What is my plan going forward?

If you’re already considering selling your home, it would be fair to guess that you have your reasons. But as you move forward, make sure you have a plan that is free of assumptions.

If you plan to move from your existing property to another property that you will be purchasing, make sure you have worked through mortgage financing ahead of time.

Just because you’ve qualified for a mortgage in the past doesn’t mean you’ll qualify for a mortgage in the future. Depending on when you got your last mortgage, a lot could have changed. You’ll want to know exactly what you can qualify for before you sell your existing property.

If you’d like to talk through all your options, connect anytime! It would be a pleasure to work with you and provide you with professional, unbiased advice.

What is a “No-Frills” Mortgage?

Wed, 13 Mar 2024 10:00:02 GMT

A no-frills service or product is where non-essential features have been removed from the product or service to keep the price as low as possible.

And while keeping costs low at the expense of non-essential features might be okay when choosing something like which grocery store to shop at, which economy car to purchase, or which budget hotel to spend the night, it’s not a good idea when considering which lender to secure mortgage financing. Here’s why.

When securing mortgage financing, your goal should be to pay the least amount of money over the term. Your plan should include having provisions for unexpected life changes.

Unlike the inconvenience of shopping at a store that doesn’t provide free bags, or driving a car without power windows, or staying at a hotel without any amenities, the so-called “frills” that are stripped away to provide you with the lowest rate mortgage are the very things that could significantly impact your overall cost of borrowing.

Depending on the lender, a “no-frills” mortgage rate might be up to 0.20% lower than a fully-featured mortgage. And while this could potentially save you a few hundreds of dollars over a 5-year term, please understand that it could also potentially cost you thousands (if not tens of thousands) of dollars should you need to break your mortgage early.

So if you’re considering a “no-frills” mortgage, here are a few of the drawbacks to think through:

You'll pay a significantly higher penalty if you need to break your mortgage.
You'll have limited pre-payment privileges.
Potential limitations if you want to port your mortgage to a different property.
You might be limited in your ability to refinance your mortgage (without incurring a considerable penalty).

Simply put, a “no-frills” mortgage is an entirely restrictive mortgage that leaves you without any flexibility. There are many reasons you might need to keep your options open. You might need to break your term because of a job loss or marital breakdown, or maybe you decide to take a new job across the country, or you need to buy a property to accommodate your growing family. Life is unpredictable; flexibility matters.

So why do banks offer a no-frills mortgage anyway? Well, when you deal with a single bank or financial institution, it’s the banker’s job to make as much money from you as possible, even if that means locking you into a very restrictive mortgage product by offering a rock bottom rate. Banks know that 2 out of 3 people break their mortgage within three years (33 months).

However, when you seek the expert advice of an independent mortgage professional, you can expect to see mortgage options from several institutions showcasing mortgage products best suited for your needs. We have your best interest in mind and will help you through the entire process. A mortgage is so much more than just the lowest rate.

If you have any questions about this, or if you’d like to discuss anything else mortgage-related, please get in touch. Working with you would be a pleasure!

Hold On...

Thu, 07 Mar 2024 20:11:38 GMT

The Bank of Canada has decided not to change its benchmark rate in its latest decision.

This keeps rates steady for the fifth consecutive time.
The overnight rate, which affects variable mortgage rates, stays at 5.0%, the same rate since July 2023. (Bank prime is still 7.20%)
There were no surprises in this Bank announcement today.
The Bank of Canada is still concerned about inflation risks and wants to see more easing in core inflation.
Last month, inflation decreased more than expected to 2.9%, inching closer to the Bank's target rate, which was good news, but……
The Canadian economy expanded in the fourth quarter and grew at a 1.0% annualized rate.
The speech from the US Treasury later this week will give a better sign on the possible trajectory of the rates both north and south of the Border.
Another thing to look for is the job numbers both here in Canada and in the US as these will have an impact on interest rate movement and timing of cuts.

All this to say it is a delicate balancing act right now and there is not enough economic incentive for the BOC to start cutting rates!

Leading economists still expect the Bank to lower the policy rate to 3% by 2025, with a 33% chance of a cut in April at the next Bank of Canada meeting. Most economist now think rate cuts will be delayed until the summer. I follow many economists and experts on the Canadian Economy and one of my favourites if Benjamin Tal. Here is what he has had to say after yesterday’s news from the BOC:

Still, while its tone was slightly more hawkish than many had expected, Tal said the central bank had good reason not to give away the game on when it’s likely to begin bringing rates down.

“What’s interesting is the language of the statement, which is not as dovish as some people expected,” Tal told Canadian Mortgage Professional after yesterday’s announcement. “There’s no hint of any cuts coming. They’re concerned about sticky inflation – and I think it makes sense.

Tal went on to say: …. the central bank is still likely to cut in June.

Time will tell if Ben has it right!

Fixed rates for a three-year term are now hovering in the low 5% range while the 5-year fixed rates are a bit lower than this, some even starting with a 4! The trouble with locking in for 5 years is that if/when rates drop further the penalty to break and refinance for an even lower rate could be very costly. Everyone’s situation is different so please reach out if you would like to discuss your mortgage renewal options.

Meanwhile, the real estate market is picking up with an up tick in listings and many buyers coming off the side lines. We do expect that this will continue through 2024 and if/when the BOC cuts and prime drops, activity heat up. If you want to consider your options for buying or selling and upsizing, now is the time to run the Mortgage Math!

The Bank's next announcement is scheduled for April 10, 2024! ��

As always, if you want to review your own personal mortgage please reach out for a complimentary Mortgage Review.

Let's Talk About Mortgage Renewals In 2024

At the risk of sounding like a broken record, today’s uncertain rate environment means mortgage renewals are more complicated!

Here are some things to consider if you have an upcoming mortgage renewal:

Confirm that your lender’s renewal offer includes all available terms.
Know that the lender’s first offer isn't always their best offer.
Ask for a quote that includes the rate and the new payment.
Understand that Mortgages can be moved to a new lender at renewal and this is often without a cost to the borrower!
The time to shop for a new mortgage is 3 - 6 months before your maturity date.

If you would like to explore all of your renewal options be sure to reach out to book a call.

If you want me to monitor your mortgage you can sign up for this service here!

Bank of Canada Rate Announcement Mar 6th, 2024

Wed, 06 Mar 2024 15:45:13 GMT

Bank of Canada maintains policy rate, continues quantitative tightening.

FOR IMMEDIATE RELEASE

Media Relations

Ottawa, Ontario

March 6, 2024

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

Global economic growth slowed in the fourth quarter. US GDP growth also slowed but remained surprisingly robust and broad-based, with solid contributions from consumption and exports. Euro area economic growth was flat at the end of the year after contracting in the third quarter. Inflation in the United States and the euro area continued to ease. Bond yields have increased since January while corporate credit spreads have narrowed. Equity markets have risen sharply. Global oil prices are slightly higher than what was assumed in the January Monetary Policy Report (MPR).

In Canada, the economy grew in the fourth quarter by more than expected, although the pace remained weak and below potential. Real GDP expanded by 1% after contracting 0.5% in the third quarter. Consumption was up a modest 1%, and final domestic demand contracted with a large decline in business investment. A strong increase in exports boosted growth. Employment continues to grow more slowly than the population, and there are now some signs that wage pressures may be easing. Overall, the data point to an economy in modest excess supply.

CPI inflation eased to 2.9% in January, as goods price inflation moderated further. Shelter price inflation remains elevated and is the biggest contributor to inflation. Underlying inflationary pressures persist: year-over-year and three-month measures of core inflation are in the 3% to 3.5% range, and the share of CPI components growing above 3% declined but is still above the historical average. The Bank continues to expect inflation to remain close to 3% during the first half of this year before gradually easing.

Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. The Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation. Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is April 10, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Using an RRSP for a Home Purchase

Wed, 28 Feb 2024 08:30:00 GMT

Your first home (with some exceptions)

Another exception is for those with a disability or those helping someone with a disability. In this case, you can withdraw from an RRSP for a home purchase at any time.

You have to pay back the RRSP

Access to funds

You can access up to $35,000 individually or $70,00 per couple through the HBP.

Please connect anytime if you’d like to know more about the HBP and how it could work for you as you plan your downpayment. It would be a pleasure to work with you.

Difference Between Deposit and Downpayment

Wed, 21 Feb 2024 08:30:01 GMT

If you’re new to the home buying process, it’s easy to get confused by some of the terms used. The purpose of this article is to clear up any confusion between the deposit and downpayment.

What is a deposit?

Your deposit goes ahead of the downpayment but makes up part of the downpayment.

What is a downpayment?

Your downpayment refers to the initial payment you make when buying a property through mortgage financing.

Example scenario

If you have any questions about the difference between the deposit and the downpayment or any other mortgage terms, please connect anytime. It would be a pleasure to work with you.

If You’re Looking to Sell Your Property, Start Here

Wed, 14 Feb 2024 08:30:00 GMT

And while talking with your mortgage professional might not sound like the most logical place to start, here are a few scenarios that explain why it makes the most sense.

If you’re buying a new property

If you’re not buying a new property

Marital breakdown

If you’d like to discuss the sale of your property and your plans for the future, connect anytime. It would be a pleasure to work with you!

Downpayment Options

Wed, 07 Feb 2024 08:30:04 GMT

As your downpayment can be a significant amount of money, you probably need a plan to put this money together. So, let’s take a look at some of the options you have to come up with a downpayment.

Money from your resources

You have to prove the source of your downpayment funds to the lender when qualifying for a mortgage to help prevent money laundering.

Funds from the sale of another property

RRSPs through the Home Buyer’s Plan

Gifted downpayment

Borrowed downpayment

It’s possible to borrow your downpayment as long as you include the payments in your debt service ratios. Typically this is 3% of the outstanding balance.

Pay Down Your Mortgage Faster

Wed, 31 Jan 2024 08:30:01 GMT

Being a home owner is excellent, having a huge mortgage isn’t. So, if you have a mortgage that you’re looking to get rid of as quickly as possible, here are four things you should consider doing.

Accelerate your payments

Increase your regular mortgage payments

Make a lump-sum payment

Review your options regularly

If you’ve got questions about your existing mortgage or want to compare your mortgage to options available today, please connect anytime. It would be a pleasure to work with you.

Bank of Canada Rate Announcement Jan 24th, 2024

Wed, 24 Jan 2024 15:40:17 GMT

Bank of Canada maintains policy rate, continues quantitative tightening.

FOR IMMEDIATE RELEASE

Read the January 24th, 2024 Monetary Policy Report

January 24, 2024

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

Global economic growth continues to slow, with inflation easing gradually across most economies. While growth in the United States has been stronger than expected, it is anticipated to slow in 2024, with weakening consumer spending and business investment. In the euro area, the economy looks to be in a mild contraction. In China, low consumer confidence and policy uncertainty will likely restrain activity. Meanwhile, oil prices are about $10 per barrel lower than was assumed in the October Monetary Policy Report (MPR). Financial conditions have eased, largely reversing the tightening that occurred last autumn.

The Bank now forecasts global GDP growth of 2½% in 2024 and 2¾% in 2025, following 2023’s 3% pace. With softer growth this year, inflation rates in most advanced economies are expected to come down slowly, reaching central bank targets in 2025.

In Canada, the economy has stalled since the middle of 2023 and growth will likely remain close to zero through the first quarter of 2024. Consumers have pulled back their spending in response to higher prices and interest rates, and business investment has contracted. With weak growth, supply has caught up with demand and the economy now looks to be operating in modest excess supply. Labour market conditions have eased, with job vacancies returning to near pre-pandemic levels and new jobs being created at a slower rate than population growth. However, wages are still rising around 4% to 5%.

Economic growth is expected to strengthen gradually around the middle of 2024. In the second half of 2024, household spending will likely pick up and exports and business investment should get a boost from recovering foreign demand. Spending by governments contributes materially to growth through the year. Overall, the Bank forecasts GDP growth of 0.8% in 2024 and 2.4% in 2025, roughly unchanged from its October projection.

CPI inflation ended the year at 3.4%. Shelter costs remain the biggest contributor to above-target inflation. The Bank expects inflation to remain close to 3% during the first half of this year before gradually easing, returning to the 2% target in 2025. While the slowdown in demand is reducing price pressures in a broader number of CPI components and corporate pricing behaviour continues to normalize, core measures of inflation are not showing sustained declines.

Given the outlook, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. The Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation. Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is March 6, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on April 10, 2024.

Protect Yourself with a Pre-Approval

Wed, 17 Jan 2024 08:30:00 GMT

Finding that balance between what makes sense in your head and what feels right in your heart is challenging. And the further you are in the process, the more desperate you may feel.

So before you ever look at a property, you should know exactly what you can qualify for so that you can shop within a set price range and you won’t be disappointed.

Protect yourself with a mortgage pre-approval. A pre-approval does a few things

It will outline your buying power. You will be able to shop with confidence, knowing exactly how much you can spend.
It will uncover any issues that might arise in qualifying for a mortgage, for example, mistakes on your credit bureau.
It will outline the necessary supporting documentation required to get a mortgage so you can be prepared.
It will secure a rate for 30 to 120 days, depending on your mortgage product.
It will save your heart from the pain of falling in love with something you can’t afford.

Get a pre-approval before you start shopping; your heart will thank you.

If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Before You Co-Sign a Mortgage

Wed, 10 Jan 2024 08:45:00 GMT

You’re fully responsible for the mortgage.

You’re on the mortgage until they can qualify to remove you.

Co-signing a mortgage impacts your debt service ratio.

As this could significantly impact the amount you could borrow in the future, before you co-sign a mortgage, you’ll want to assess your financial future and decide if co-signing makes sense.

Co-signing a mortgage means helping someone get ahead.

If you have any questions about co-signing on a mortgage or about the mortgage application process in general, please connect anytime. It would be a pleasure to work with you.

Lowering Your Overall Cost of Borrowing

Wed, 03 Jan 2024 08:45:01 GMT

Choosing a mortgage with a low rate is a part of lowering your borrowing costs, but it’s certainly not the only factor. There are many other factors to consider; here are a few of them:

How long do you anticipate living in the property? This will help you decide on an appropriate term.
Do you plan on moving for work, or do you need the flexibility to move in the future? This could help you decide if portability is important to you.
What does the prepayment penalty look like if you have to break your term? This is probably the biggest factor in lowering your overall cost of borrowing.
How is the lender’s interest rate differential calculated, what figures do they use? This is very tough to figure out on your own. Get help.
What are the prepayment privileges? If you’d like to pay down your mortgage faster.
How is the mortgage registered on the title? This could impact your ability to switch to another lender upon renewal without incurring new legal costs, or it could mean increased flexibility down the line.
Should you consider a fixed rate, variable rate, HELOC, or a reverse mortgage? There are many different types of mortgages; each has its own pros and cons.
What is the size of your downpayment? Coming up with more money down might lower (or eliminate) mortgage insurance premiums, saving you thousands of dollars.

Don't Accidentally Buy A Home

Wed, 27 Dec 2023 08:45:00 GMT

Fair warning, this article might get a little cheeky.

Quit your job.

Spend All Your Savings.

Collect as Much Debt as Possible.

After quitting your job and spending all your savings, you should definitely go out and incur as much debt as possible! The higher the payments, the better.

Stop Making Your Debt Payments

Why would any lender want to lend you money when you have a track record of not paying back any of the money you’ve already borrowed?

Provide Ugly Supporting Documentation.

Firstly, and probably the most straightforward, make sure your name doesn’t appear anywhere on any of your statements. This way, the lender can’t be sure the documents are actually yours or not.

And lastly, consider blacking out all your “personal information.” Just use a black Sharpie and make your paperwork look like classified FBI documents.

Follow-Through

If you'd like to make sure you're on the right track, connect anytime. It would be a pleasure to walk through the mortgage process with you.

Difference Between A Standard And Collateral Mortgage

Wed, 20 Dec 2023 08:15:01 GMT

Standard charge mortgage

Collateral charge mortgage

A home equity line of credit is a good example of a collateral charge mortgage.

So what’s a better option for you?

So if you’d like to have a conversation about mortgage financing, please get in touch. It would be a pleasure to work with you and answer any questions you might have.

How To Get The Best Mortgage

Wed, 13 Dec 2023 08:15:01 GMT

Here are four things that your bank won’t tell you, accompanied by four reasons that explain why working with an independent mortgage professional is in your best interest.

Banks have Limited Access to Mortgage Products.

Banks Employ Salespeople, not Mortgage Experts.

Banks don’t have your best interest in mind. In fact, the more money they make off of you, the better it is for their bottom line.

When you work with an independent mortgage professional, everyone wins. You get the best mortgage available, we get paid a standardized finder’s fee, and the lender gets a new borrower.

Banks Rarely Offer You Their Best Terms Upfront.

Banks are in the business of making money, and they’re usually pretty good at it. As such, banks will rarely offer you their best terms at the outset of your negotiation.

Banks Promote Restrictive Mortgage Products.

When you work with an independent mortgage professional, we take the time to listen to your goals and assess your mortgage needs based on your life circumstances.

Working with an Independent Mortgage Professional is in Your Best Interest.

Banks have limitations to the mortgage products they offer. Working with an independent mortgage professional gives you mortgage options!

Bankers work for the bank; they are incentivized to make money for the bank. An independent mortgage professional advocates on your behalf to get you the best mortgage available.

Banks rarely offer their best terms upfront; they leave negotiations up to you. An independent mortgage professional outlines the best terms from multiple lenders at the start of the process.

So if you’d like to talk about the best mortgage product for you, you’ve come to the right place. Please connect anytime. It would be a pleasure to work with you.

Bank of Canada Rate Announcement Dec 6th, 2023

Wed, 06 Dec 2023 16:19:59 GMT

Bank of Canada maintains policy rate, continues quantitative tightening.

FOR IMMEDIATE RELEASE

December 6, 2023

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

The global economy continues to slow and inflation has eased further. In the United States, growth has been stronger than expected, led by robust consumer spending, but is likely to weaken in the months ahead as past policy rate increases work their way through the economy. Growth in the euro area has weakened and, combined with lower energy prices, this has reduced inflationary pressures. Oil prices are about $10-per-barrel lower than was assumed in the October Monetary Policy Report (MPR). Financial conditions have also eased, with long-term interest rates unwinding some of the sharp increases seen earlier in the autumn. The US dollar has weakened against most currencies, including Canada’s.

In Canada, economic growth stalled through the middle quarters of 2023. Real GDP contracted at a rate of 1.1% in the third quarter, following growth of 1.4% in the second quarter. Higher interest rates are clearly restraining spending: consumption growth in the last two quarters was close to zero, and business investment has been volatile but essentially flat over the past year. Exports and inventory adjustment subtracted from GDP growth in the third quarter, while government spending and new home construction provided a boost. The labour market continues to ease: job creation has been slower than labour force growth, job vacancies have declined further, and the unemployment rate has risen modestly. Even so, wages are still rising by 4-5%. Overall, these data and indicators for the fourth quarter suggest the economy is no longer in excess demand.

The slowdown in the economy is reducing inflationary pressures in a broadening range of goods and services prices. Combined with the drop in gasoline prices, this contributed to the easing of CPI inflation to 3.1% in October. However, shelter price inflation has picked up, reflecting faster growth in rent and other housing costs along with the continued contribution from elevated mortgage interest costs. In recent months, the Bank’s preferred measures of core inflation have been around 3½-4%, with the October data coming in towards the lower end of this range.

With further signs that monetary policy is moderating spending and relieving price pressures, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. Governing Council is still concerned about risks to the outlook for inflation and remains prepared to raise the policy rate further if needed. Governing Council wants to see further and sustained easing in core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is January 24, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Are You Ready To Buy A Home?

Wed, 29 Nov 2023 08:30:00 GMT

Buying your first home is a big deal. And while you may feel like you’re ready to take that step, here are 4 things that will prove it out.

1. You have at least 5% available for a downpayment.

To buy your first home, you need to come up with at least 5% for a downpayment. From there, you’ll be expected to have roughly 1.5% of the purchase price set aside for closing costs.

2. You have established credit.

3. You have the income to make your mortgage payments. And then some.

A good rule of thumb is to keep the costs of homeownership to under a third of your gross income, leaving you with two-thirds of your income to pay for your life.

4. You’ve discussed mortgage financing with a professional.

Please connect anytime; it would be a pleasure to work with you!

Housing, Housing and More Housing....

Thu, 23 Nov 2023 23:22:10 GMT

Did you hear? The Federal Government released details on their plans for housing in this weeks’ Fall Economic Statement! It's all about tackling the housing supply and affordability crisis that's keeping politicians and many Canadians up at night.

The Liberal Government has committed to add a 3.5 million new housing units by 2030. That's a lot of new homes, if they can do it! Finance Minister Chrystia Freeland outlined the details in the House of Commons, saying her government is planning to spend $20.8 billion over six years, from which $6.3 billion is going straight into housing affordability. But here's the kicker – they're expecting a $40 billion deficit this year. Yikes, this plan is expensive! So, like it or hate it, we can all agree we need more housing and unfortunately that comes at a big cost.

I am going to steer clear of the politics and the macro economics of this plan and just outline the nitty gritty below. ?

Here's a break down of what was announced:

1. Cracking Down on Short-term Rentals: They're giving a stern talking-to to non-compliant short-term rentals like Airbnb. The government wants more long-term homes for us Canadians, so they're nixing income tax deductions for owners who don't play by the rules. Say goodbye to tax breaks for short-term rentals in places like Toronto, Montreal, and Vancouver.

2. Incentivizing New Housing: The government is throwing an extra $1 billion into their Housing Accelerator Fund, aiming to help build 100,000 new homes in five years. Plus, they're handing out low-cost loans, and even saying bye-bye to the GST on new rental construction, but that will cost them $1.1 billion.

3. The Canadian Mortgage Charter: There's a new kid in town – the Canadian Mortgage Charter. It's all about making sure we get fair and timely mortgage relief if we hit a financial rough patch. If you're struggling, the government wants banks to cut some slack, like allowing temporary extensions and not charging interest on interest during relief periods. ***Watch for a lot more to come on this as we in the industry get copies of the actual document!***

4. Clarifying the Mortgage Stress Test: Good news! The mortgage stress test won't be making a comeback for insured renewals. The stress test is the tool used by lenders to make sure you can handle your mortgage at a higher interest rate. The change is that now borrowers won't have to be “stress tested” at renewal and this applies even if they move lenders at renewal. As far as we can tell, this is “old news” and was released by OFSI a few weeks ago and since it applies to insured mortgages only, this impacts just 1 in 4 mortgages in Canada. The devil is in the details on this one so stand-by for more as soon as I get the full information AND we learn what our lenders have to say about this.

5. Canada Mortgage Bond (CMB) Program: They're upping the game on Canada Mortgage Bonds, planning to increase the annual limit from $40 billion to $60 billion. This extra cash – $20 billion worth – is supposed to help build 30,000 new rental apartments every year.

6. Priority for Construction Workers: In May, the government started giving the VIP treatment to construction workers. They're fast-tracking permanent residency for those with specific skills, education, and certifications in the construction biz. So far, 1,500 lucky workers have scored permanent residency.

7. Update on First-Home Savings Account: Remember that Tax-Free First-Home Savings Account they talked about last year? Well, it's official – over 250,000 Canadians have jumped on the bandwagon. You can save up to $8,000 a year, tax-free, for that dream home down payment. It's like a mix of the Tax-Free Savings Account and the Registered Retirement Savings Plan, but for your first home! I will be hosting a webinar on this early in 2024 with one of my Financial Planner referral partners.

There you have it – the government's game plan to fix up the housing situation. Yes, it is expensive but we can all agree the housing shortages are a real problem in Canada. Time will tell but let's hope these initiatives make finding a home a little less stressful! ??

As always, please give me a call or book a time to talk below if you want to discuss your specific situation.

How Much Does It Actually Cost To Buy Property?

Wed, 22 Nov 2023 09:00:01 GMT

Inspection or Appraisal

Lawyer or Notary Fees

Taxes

Insurance

Moving Expenses

Utilities

If you have any questions about your closing costs or anything else mortgage-related, please connect anytime; it would be great to hear from you!

Alternative Lending

Wed, 15 Nov 2023 08:15:00 GMT

Damaged Credit

Self-Employment

Non-traditional income

Welcome to the new frontier of earning an income.

If you make money through non-traditional employment like Airbnb, tips, commissions, Uber, or Uber eats, alternative lending is more likely to be flexible to your needs.

Expanded Debt-Service Ratios

Connect anytime

Please connect anytime if you’d like to discuss mortgage financing and what alternative lending products might suit your needs; it would be a pleasure to work with you.

Why You Should Work With An Independent Mortgage Professional

Wed, 08 Nov 2023 09:15:00 GMT

However, if you’d like to dig a little deeper, here are some reasons that outline why working with an independent mortgage professional is in your best interest.

The best mortgage is the one that costs you the least over the long term. An independent mortgage professional can help you achieve this.

Working the numbers with an independent mortgage professional will save you money in the long run instead of just going with what a single lender is offering.

Save time by letting an independent mortgage professional find the best mortgage product for you.

Let's face it, getting a mortgage can be challenging enough on its own. Everyone’s financial situation is a little different and making sense of lender guidelines is a full-time job in itself.

Simply put, an independent mortgage professional works for you and has your best interest in mind, while a bank specialist works for the bank and has the bank's best interest in mind.

If you’d like to know more or to discuss mortgage financing, please connect anytime; it would be a pleasure to work with you.

Simplifying The Mortgage Process

Wed, 01 Nov 2023 07:30:00 GMT

So there you have it, six steps to ensuring a smooth home purchase:

Work with an independent mortgage professional.
Put together a mortgage plan.
Figure out what you can actually afford.
Get a pre-approval.
Provide the necessary documentation.
Don’t change anything about your financial situation until you take possession.

If you’d like to discuss your personal financial situation and find the best mortgage product for you, let’s work together. We can figure out a plan to buy a home as stress-free as possible.

Please connect anytime; it would be a pleasure to work with you.

Bank of Canada Rate Announcement Oct 25th, 2023

Wed, 25 Oct 2023 15:18:36 GMT

Bank of Canada maintains policy rate, continues quantitative tightening.

FOR IMMEDIATE RELEASE

Read the October 25th, 2023 Monetary Policy Report.

October 25, 2023

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

The global economy is slowing and growth is forecast to moderate further as past increases in policy rates and the recent surge in global bond yields weigh on demand. The Bank projects global GDP growth of 2.9% this year, 2.3% in 2024 and 2.6% in 2025. While this global growth outlook is little changed from the July Monetary Policy Report (MPR), the composition has shifted, with the US economy proving stronger and economic activity in China weaker than expected. Growth in the euro area has slowed further. Inflation has been easing in most economies, as supply bottlenecks resolve and weaker demand relieves price pressures. However, with underlying inflation persisting, central banks continue to be vigilant. Oil prices are higher than was assumed in July, and the war in Israel and Gaza is a new source of geopolitical uncertainty.

In Canada, there is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures. Consumption has been subdued, with softer demand for housing, durable goods and many services. Weaker demand and higher borrowing costs are weighing on business investment. The surge in Canada’s population is easing labour market pressures in some sectors while adding to housing demand and consumption. In the labour market, recent job gains have been below labour force growth and job vacancies have continued to ease. However, the labour market remains on the tight side and wage pressures persist. Overall, a range of indicators suggest that supply and demand in the economy are now approaching balance.

After averaging 1% over the past year, economic growth is expected to continue to be weak for the next year before increasing in late 2024 and through 2025. The near-term weakness in growth reflects both the broadening impact of past increases in interest rates and slower foreign demand. The subsequent pickup is driven by household spending as well as stronger exports and business investment in response to improving foreign demand. Spending by governments contributes materially to growth over the forecast horizon. Overall, the Bank expects the Canadian economy to grow by 1.2% this year, 0.9% in 2024 and 2.5% in 2025.

CPI inflation has been volatile in recent months—2.8% in June, 4.0% in August, and 3.8% in September. Higher interest rates are moderating inflation in many goods that people buy on credit, and this is spreading to services. Food inflation is easing from very high rates. However, in addition to elevated mortgage interest costs, inflation in rent and other housing costs remains high. Near-term inflation expectations and corporate pricing behaviour are normalizing only gradually, and wages are still growing around 4% to 5%. The Bank’s preferred measures of core inflation show little downward momentum.

In the Bank’s October projection, CPI inflation is expected to average about 3½% through the middle of next year before gradually easing to 2% in 2025. Inflation returns to target about the same time as in the July projection, but the near-term path is higher because of energy prices and ongoing persistence in core inflation.

With clearer signs that monetary policy is moderating spending and relieving price pressures, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. However, Governing Council is concerned that progress towards price stability is slow and inflationary risks have increased, and is prepared to raise the policy rate further if needed. Governing Council wants to see downward momentum in core inflation, and continues to be focused on the balance between demand and supply in the economy, inflation expectations, wage growth and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is December 6, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on January 24, 2024.

Cashback Mortgage Financing

Wed, 18 Oct 2023 07:45:00 GMT

How you use the cash is entirely up to you. Some of the most common reasons to secure a cashback mortgage are to:

Cover closing costs.
Buy new furniture.
Renovate your property.
Supplement cashflow.
Consolidate higher-interest debt.

Really, you can use the cash for anything you like. It’s tax-free and paid to you directly once the mortgage closes.

Understanding the cost of a cashback mortgage.

A cashback mortgage is like getting a fixed loan rolled into your mortgage. Your interest rate is increased to cover the additional funds being lent.

Eligibility for a cashback mortgage.

Breaking your mortgage term early.

In addition to paying a higher interest rate to cover the cost of receiving the cashback at closing, a cashback mortgage also limits your options down the line.

Get independent mortgage advice.

If you’d like to discuss what a cashback mortgage or any other mortgage product would look like for you, please get in touch. It would be a pleasure to work with you.

Financing For A Second Home

Wed, 11 Oct 2023 07:30:00 GMT

If you’ve been thinking about buying a second property and you’re looking to put some of the pieces together, you’ve come to the right place!

Now, while there are many great reasons to buy a second property, there is also a lot to know as you walk through the process. The key here is to have absolute clarity around your why.

Securing a new mortgage if you own your property clear title
Refinancing your existing mortgage to access additional funds
Securing a home equity line of credit (HELOC)
Getting a second mortgage behind your existing first mortgage
Securing a reverse mortgage

Mortgage Refinance To Consolidate Debt

Wed, 04 Oct 2023 07:15:04 GMT

If you’re a homeowner looking to optimize your finances, consider taking advantage of your home’s equity to reposition any existing debts you may have.

If you’ve accumulated consumer debt, the payments required to service these debts can make it difficult to manage your daily finances. A consolidation mortgage might be a great option for you!

Simply put, debt repositioning or debt consolidation is when you combine your consumer debt with a mortgage secured to your home. To make this happen, you’ll borrow against your home’s equity.

Some of the types of debts that you can consolidate are:

Credit Card
Unsecured Line of Credit
Car Loan
Student Loans
Personal or Payday Loans

Debt consolidation makes sense because it allows you to take high-interest unsecured debts and reposition them into a single low payment.

While there is a lot to unpack here, if you’d like to discuss what using a mortgage to reposition your debts could look like for you, here’s a simple plan we can follow:

First, we’ll assess your existing debt to income ratio.
We’ll establish your home’s equity.
We’ll consider all your mortgage options.
Lastly, we’ll reposition your debts to help optimize your finances.

If this sounds like the plan for you, the best place to start is to connect directly. It would be a pleasure to work with you.

Mortgage Financing For Home Renos

Wed, 27 Sep 2023 07:15:14 GMT

Existing Home Owners - Mortgage Refinance

Probably the most straightforward solution, if you’re an existing homeowner, would be to access home equity through a mortgage refinance.

As your financial situation is unique, it never hurts to have the conversation, run the numbers, and look at your options. Let’s talk!

If you're not in a huge rush, it might be worth waiting until your existing term is up for renewal. This is a great time to refinance as you won’t incur a penalty to break your existing mortgage.

Now, regardless of when you refinance, mid-term or at renewal, you’re able to access up to 80% of the appraised value of your home, assuming you qualify for the increased mortgage amount.

Home Equity Line of Credit

Instead of talking with a bank about an unsecured line of credit, if you have significant home equity, a home equity line of credit (HELOC) could be a better option for you.

An unsecured line of credit usually comes with a pretty high rate. In contrast, a HELOC uses your home as collateral, allowing the lender to give you considerably more favourable terms.

There are several different ways to use a HELOC, so if you’d like to talk more about what this could look like for you, connect anytime!

Buying a Property - Purchase Plus Improvements

So if you’d like to discuss using your mortgage to cover the cost of renovating your home, please connect anytime!

Fixed Or Variable Rate Mortgage?

Wed, 20 Sep 2023 07:15:03 GMT

So here's a simple comparison.

If you’ve got questions, connect anytime. It would be a pleasure to work through the options together.

Mortgage Financing Through A Separation Or Divorce

Wed, 13 Sep 2023 07:15:01 GMT

Keep making your payments.

There is always a financial cost to break your mortgage.

When working through how to split your finances, you decided to either refinance your mortgage, remove someone from the title, or sell the property, keep in mind that you will incur legal costs.

Listing your marital status as separated or divorced.

It could be harder to qualify for a new mortgage.

Purchasing the matrimonial home from your ex.

Bank of Canada Rate Announcement Sept 6th, 2023

Wed, 06 Sep 2023 15:13:09 GMT

Bank of Canada maintains policy rate, continues quantitative tightening.

FOR IMMEDIATE RELEASE

September 6, 2023

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is also continuing its policy of quantitative tightening.

Inflation in advanced economies has continued to come down, but with measures of core inflation still elevated, major central banks remain focused on restoring price stability. Global growth slowed in the second quarter of 2023, largely reflecting a significant deceleration in China. With ongoing weakness in the property sector undermining confidence, growth prospects in China have diminished. In the United States, growth was stronger than expected, led by robust consumer spending. In Europe, strength in the service sector supported growth, offsetting an ongoing contraction in manufacturing. Global bond yields have risen, reflecting higher real interest rates, and international oil prices are higher than was assumed in the July Monetary Policy Report (MPR).

The Canadian economy has entered a period of weaker growth, which is needed to relieve price pressures. Economic growth slowed sharply in the second quarter of 2023, with output contracting by 0.2% at an annualized rate. This reflected a marked weakening in consumption growth and a decline in housing activity, as well as the impact of wildfires in many regions of the country. Household credit growth slowed as the impact of higher rates restrained spending among a wider range of borrowers. Final domestic demand grew by 1% in the second quarter, supported by government spending and a boost to business investment. The tightness in the labour market has continued to ease gradually. However, wage growth has remained around 4% to 5%.

Recent CPI data indicate that inflationary pressures remain broad-based. After easing to 2.8% in June, CPI inflation moved up to 3.3% in July, averaging close to 3% in line with the Bank’s projection. With the recent increase in gasoline prices, CPI inflation is expected to be higher in the near term before easing again. Year-over-year and three-month measures of core inflation are now both running at about 3.5%, indicating there has been little recent downward momentum in underlying inflation. The longer high inflation persists, the greater the risk that elevated inflation becomes entrenched, making it more difficult to restore price stability.

With recent evidence that excess demand in the economy is easing, and given the lagged effects of monetary policy, Governing Council decided to hold the policy interest rate at 5% and continue to normalize the Bank’s balance sheet. However, Governing Council remains concerned about the persistence of underlying inflationary pressures, and is prepared to increase the policy interest rate further if needed. Governing Council will continue to assess the dynamics of core inflation and the outlook for CPI inflation. In particular, we will be evaluating whether the evolution of excess demand, inflation expectations, wage growth and corporate pricing behavior are consistent with achieving the 2% inflation target. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is October 25, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report at the same time.

Getting A Second Mortgage

Wed, 30 Aug 2023 07:15:01 GMT

A second mortgage is an additional mortgage on a single property, not the second mortgage you get in your lifetime.

When you secure a second mortgage, you continue making payments on your first mortgage as per your mortgage agreement. You must also then fulfill the terms of the second mortgage.

If you'd like to know more about how a second mortgage works, or if you'd like to discuss anything related to mortgage financing, please connect anytime!

Navigating The Housing Market

Wed, 23 Aug 2023 07:15:05 GMT

Here are some questions to consider. Although they are subjective, they will help bring you clarity. Ask yourself:

Does buying a property now put me in a better financial position?
Do I make enough money now to afford a new home and maintain my lifestyle?
Do I feel confident with my current employment status?
Have I saved enough money for a down payment?
How long do I plan on living in this new home?
Is there any scenario where I might have to sell quickly and potentially lose money?
Does buying a property now move me closer to my life goals?
Do I really want to buy now or am I just feeling a lot of pressure to just buy something?
Am I holding back because I'm scared property prices might drop soon?

There’s no doubt that buying a home can be stressful, but it doesn’t have to be. Having a plan in place is the best course of action to help you make good decisions and alleviate that stress.

If you’d like to have a conversation to discuss your plans, ask some questions, and map out what buying a home looks like for you, we can address many of the unknowns together.

How To Improve Your Credit Score

Wed, 16 Aug 2023 07:15:02 GMT

Make all your payments on time.

Making your payments on time is so important; in fact, it might just be the most important factor in managing your credit.

Now, just because payments don't report until being 30 days late, don’t get comfortable with making late payments; the best advice is to pay your debts on time, as agreed.

Stop acquiring new credit.

Keep a reasonable balance.

Check your credit report regularly.

Handle collections immediately.

Use your credit card.

There you have it. Regardless of what your credit looks like now, you will continue to increase your credit score if you follow the points outlined above.

Bank of Canada Rate Announcement Jul 12th, 2023

Wed, 12 Jul 2023 15:23:25 GMT

Bank of Canada raises policy rate 25 basis points, continues quantitative tightening.

FOR IMMEDIATE RELEASE

Read the July 12th, 2023 Monetary Policy Report

July 12, 2023

The Bank of Canada today increased its target for the overnight rate to 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is also continuing its policy of quantitative tightening.

Global inflation is easing, with lower energy prices and a decline in goods price inflation. However, robust demand and tight labour markets are causing persistent inflationary pressures in services. Economic growth has been stronger than expected, especially in the United States, where consumer and business spending has been surprisingly resilient. After a surge in early 2023, China’s economic growth is softening, with slowing exports and ongoing weakness in its property sector. Growth in the euro area is effectively stalled: while the service sector continues to grow, manufacturing is contracting. Global financial conditions have tightened, with bond yields up in North America and Europe as major central banks signal further interest rate increases may be needed to combat inflation.

The Bank’s July Monetary Policy Report (MPR) projects the global economy will grow by around 2.8% this year and 2.4% in 2024, followed by 2.7% growth in 2025.

Canada’s economy has been stronger than expected, with more momentum in demand. Consumption growth has been surprisingly strong at 5.8% in the first quarter. While the Bank expects consumer spending to slow in response to the cumulative increase in interest rates, recent retail trade and other data suggest more persistent excess demand in the economy. In addition, the housing market has seen some pickup. New construction and real estate listings are lagging demand, which is adding pressure to prices. In the labour market, there are signs of more availability of workers, but conditions remain tight, and wage growth has been around 4-5%. Strong population growth from immigration is adding both demand and supply to the economy: newcomers are helping to ease the shortage of workers while also boosting consumer spending and adding to demand for housing.

As higher interest rates continue to work their way through the economy, the Bank expects economic growth to slow, averaging around 1% through the second half of this year and the first half of next year. This implies real GDP growth of 1.8% in 2023 and 1.2% in 2024. The economy will move into modest excess supply early next year before growth picks up to 2.4% in 2025.

Inflation in Canada eased to 3.4% in May, a substantial and welcome drop from its peak of 8.1% last summer. While CPI inflation has come down largely as expected so far this year, the downward momentum has come more from lower energy prices, and less from easing underlying inflation. With the large price increases of last year out of the annual data, there will be less near-term downward momentum in CPI inflation. Moreover, with three-month rates of core inflation running around 3½-4% since last September, underlying price pressures appear to be more persistent than anticipated. This is reinforced by the Bank’s business surveys, which find businesses are still increasing their prices more frequently than normal.

In the July MPR projection, CPI inflation is forecast to hover around 3% for the next year before gradually declining to 2% in the middle of 2025. This is a slower return to target than was forecast in the January and April projections. Governing Council remains concerned that progress towards the 2% target could stall, jeopardizing the return to price stability.

In light of the accumulation of evidence that excess demand and elevated core inflation are both proving more persistent, and taking into account its revised outlook for economic activity and inflation, Governing Council decided to increase the policy interest rate to 5%. Quantitative tightening is complementing the restrictive stance of monetary policy and normalizing the Bank’s balance sheet. Governing Council will continue to assess the dynamics of core inflation and the outlook for CPI inflation. In particular, we will be evaluating whether the evolution of excess demand, inflation expectations, wage growth and corporate pricing behaviour are consistent with achieving the 2% inflation target. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is September 6, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report on October 25, 2023.

Bank of Canada Rate Announcement Jun 7th, 2023

Wed, 07 Jun 2023 15:21:00 GMT

Bank of Canada raises policy rate 25 basis points, continues quantitative tightening.

FOR IMMEDIATE RELEASE

June 7, 2023

The Bank of Canada today increased its target for the overnight rate to 4¾%, with the Bank Rate at 5% and the deposit rate at 4¾%. The Bank is also continuing its policy of quantitative tightening.

Globally, consumer price inflation is coming down, largely reflecting lower energy prices compared to a year ago, but underlying inflation remains stubbornly high. While economic growth around the world is softening in the face of higher interest rates, major central banks are signalling that interest rates may have to rise further to restore price stability. In the United States, the economy is slowing, although consumer spending remains surprisingly resilient and the labour market is still tight. Economic growth has essentially stalled in Europe but upward pressure on core prices is persisting. Growth in China is expected to slow after surging in the first quarter. Financial conditions have tightened back to those seen before the bank failures in the United States and Switzerland.

Canada’s economy was stronger than expected in the first quarter of 2023, with GDP growth of 3.1%. Consumption growth was surprisingly strong and broad-based, even after accounting for the boost from population gains. Demand for services continued to rebound. In addition, spending on interest-sensitive goods increased and, more recently, housing market activity has picked up. The labour market remains tight: higher immigration and participation rates are expanding the supply of workers but new workers have been quickly hired, reflecting continued strong demand for labour. Overall, excess demand in the economy looks to be more persistent than anticipated.

CPI inflation ticked up in April to 4.4%, the first increase in 10 months, with prices for a broad range of goods and services coming in higher than expected. Goods price inflation increased, despite lower energy costs. Services price inflation remained elevated, reflecting strong demand and a tight labour market. The Bank continues to expect CPI inflation to ease to around 3% in the summer, as lower energy prices feed through and last year’s large price gains fall out of the yearly data. However, with three-month measures of core inflation running in the 3½-4% range for several months and excess demand persisting, concerns have increased that CPI inflation could get stuck materially above the 2% target.

Based on the accumulation of evidence, Governing Council decided to increase the policy interest rate, reflecting our view that monetary policy was not sufficiently restrictive to bring supply and demand back into balance and return inflation sustainably to the 2% target. Quantitative tightening is complementing the restrictive stance of monetary policy and normalizing the Bank’s balance sheet. Governing Council will continue to assess the dynamics of core inflation and the outlook for CPI inflation. In particular, we will be evaluating whether the evolution of excess demand, inflation expectations, wage growth and corporate pricing behaviour are consistent with achieving the inflation target. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note
The next scheduled date for announcing the overnight rate target is July 12, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report at the same time.

Bank of Canada Rate Announcement Apr 12th, 2023

Wed, 12 Apr 2023 15:08:08 GMT

Bank of Canada maintains policy rate, continues quantitative tightening.

FOR IMMEDIATE RELEASE

Read the April 12th, 2023 Monetary Policy Report.

April 12, 2023

The Bank of Canada today held its target for the overnight rate at 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank is also continuing its policy of quantitative tightening.

Inflation in many countries is easing in the face of lower energy prices, normalizing global supply chains, and tighter monetary policy. At the same time, labour markets remain tight and measures of core inflation in many advanced economies suggest persistent price pressures, especially for services.

Global economic growth has been stronger than anticipated. Growth in the United States and Europe has surprised on the upside, but is expected to weaken as tighter monetary policy continues to feed through those economies. In the United States, recent stress in the banking sector has tightened credit conditions further. US growth is expected to slow considerably in the coming months, with particular weakness in sectors that are important for Canadian exports. Meanwhile, activity in China’s economy has rebounded, particularly in services. Overall, commodity prices are close to their January levels. The Bank’s April Monetary Policy Report (MPR) projects global growth of 2.6% this year, 2.1% in 2024, and 2.8% in 2025.

In Canada, demand is still exceeding supply and the labour market remains tight. Economic growth in the first quarter looks to be stronger than was projected in January, with a bounce in exports and solid consumption growth. While the Bank’s Business Outlook Survey suggests acute labour shortages are starting to ease, wage growth is still elevated relative to productivity growth. Strong population gains are adding to labour supply and supporting employment growth while also boosting aggregate consumption. Housing market activity remains subdued.

As more households renew their mortgages at higher rates and restrictive monetary policy works its way through the economy more broadly, consumption is expected to moderate this year. Softening foreign demand is expected to restrain exports and business investment. Overall, GDP growth is projected to be weak through the remainder of this year before strengthening gradually next year. This implies the economy will move into excess supply in the second half of this year. The Bank now projects Canada’s economy to grow by 1.4% this year and 1.3% in 2024 before picking up to 2.5% in 2025.

CPI inflation eased to 5.2% in February, and the Bank’s preferred measures of core inflation were just under 5%. The Bank expects CPI inflation to fall quickly to around 3% in the middle of this year and then decline more gradually to the 2% target by the end of 2024. Recent data is reinforcing Governing Council’s confidence that inflation will continue to decline in the next few months. However, getting inflation the rest of the way back to 2% could prove to be more difficult because inflation expectations are coming down slowly, service price inflation and wage growth remain elevated, and corporate pricing behaviour has yet to normalize. As it sets monetary policy, Governing Council will be particularly focused on these indicators, and the evolution of core inflation, to gauge the progress of CPI inflation back to target.

In light of its outlook for growth and inflation, Governing Council decided to maintain the policy rate at 4½%. Quantitative tightening continues to complement this restrictive stance. Governing Council continues to assess whether monetary policy is sufficiently restrictive to relieve price pressures and remains prepared to raise the policy rate further if needed to return inflation to the 2% target. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is June 7, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on July 12, 2023.

Bank of Canada Rate Announcement Mar 8th, 2023

Wed, 08 Mar 2023 15:45:15 GMT

Bank of Canada maintains policy rate, continues quantitative tightening.

FOR IMMEDIATE RELEASE

Here's the link to check out the Real Estate Vancouver Podcast.

March 8, 2023

The Bank of Canada today held its target for the overnight rate at 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank is also continuing its policy of quantitative tightening.

Global economic developments have evolved broadly in line with the outlook in the January Monetary Policy Report (MPR). Global growth continues to slow, and inflation, while still too high, is coming down due primarily to lower energy prices. In the United States and Europe, near-term outlooks for growth and inflation are both somewhat higher than expected in January. In particular, labour markets remain tight, and elevated core inflation is persisting. Growth in China is rebounding in the first quarter. Commodity prices have evolved roughly in line with the Bank’s expectations, but the strength of China’s recovery and the impact of Russia’s war in Ukraine remain key sources of upside risk. Financial conditions have tightened since January, and the US dollar has strengthened.

In Canada, economic growth came in flat in the fourth quarter of 2022, lower than the Bank projected. With consumption, government spending and net exports all increasing, the weaker-than-expected GDP was largely because of a sizeable slowdown in inventory investment. Restrictive monetary policy continues to weigh on household spending, and business investment has weakened alongside slowing domestic and foreign demand.

The labour market remains very tight. Employment growth has been surprisingly strong, the unemployment rate remains near historic lows, and job vacancies are elevated. Wages continue to grow at 4% to 5%, while productivity has declined in recent quarters.

Inflation eased to 5.9% in January, reflecting lower price increases for energy, durable goods and some services. Price increases for food and shelter remain high, causing continued hardship for Canadians. With weak economic growth for the next couple of quarters, pressures in product and labour markets are expected to ease. This should moderate wage growth and also increase competitive pressures, making it more difficult for businesses to pass on higher costs to consumers.

Overall, the latest data remains in line with the Bank’s expectation that CPI inflation will come down to around 3% in the middle of this year. Year-over-year measures of core inflation ticked down to about 5%, and 3-month measures are around 3½%. Both will need to come down further, as will short-term inflation expectations, to return inflation to the 2% target.

At its January decision, the Governing Council indicated that it expected to hold the policy interest rate at its current level, conditional on economic developments evolving broadly in line with the MPR outlook. Based on its assessment of recent data, Governing Council decided to maintain the policy rate at 4½%. Quantitative tightening is complementing this restrictive stance. Governing Council will continue to assess economic developments and the impact of past interest rate increases, and is prepared to increase the policy rate further if needed to return inflation to the 2% target. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information Note

The next scheduled date for announcing the overnight rate target is April 12, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report at the same time.

Reverse Mortgages & the Great Wealth Transfer

Fri, 03 Mar 2023 00:35:39 GMT

Recently I was delighted to be a guest on Vancouver’s #1 Real Estate podcast. I had a great time and wanted to share the conversation.

Episode Summary:

Learn all about reverse mortgages and the great generational wealth transfer happening in Vancouver. Should you get a HELOC or a reverse mortgage? Mortgage broker Marci Deane has the answer!

What is the state of mortgage-free real estate in Metro Vancouver? How does that impact the generational wealth transfer we’ve been seeing in recent years?

Adam & Matt : In 2006, the total value of mortgage-free real estate in Metro Vancouver was $123.8 billion. Half of that was owned by homeowners 55-74 years old. By 2021, that number tripled to $373.3 billion. And the amount owned by 55-74 years old was more than 55%.

The big takeaway: Boomers are real estate rich in Metro Vancouver.

We’ve been watching the generational wealth transfer over the last couple of years. Boomers want to help their kids get into the market. And for most, that help with a down payment is the only way for young adults to get into the market .

One of the ways for people to tap into the wealth in their real estate is through a reverse mortgage, which Marci Deane is going to tell us all about.

Bank of Canada Rate Announcement Jan 25th, 2023

Wed, 25 Jan 2023 15:56:41 GMT

Bank of Canada increases policy interest rate by 25 basis points, continues quantitative tightening.

FOR IMMEDIATE RELEASE

Read the January 25th, 2023 Monetary Policy Report.

January 25, 2023

The Bank of Canada today increased its target for the overnight rate to 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank is also continuing its policy of quantitative tightening.

Global inflation remains high and broad-based. Inflation is coming down in many countries, largely reflecting lower energy prices as well as improvements in global supply chains. In the United States and Europe, economies are slowing but proving more resilient than was expected at the time of the Bank’s October Monetary Policy Report (MPR). China’s abrupt lifting of COVID-19 restrictions has prompted an upward revision to the growth forecast for China and poses an upside risk to commodity prices. Russia’s war on Ukraine remains a significant source of uncertainty. Financial conditions remain restrictive but have eased since October, and the Canadian dollar has been relatively stable against the US dollar.

The Bank estimates the global economy grew by about 3½% in 2022, and will slow to about 2% in 2023 and 2½% in 2024. This projection is slightly higher than October’s.

In Canada, recent economic growth has been stronger than expected and the economy remains in excess demand. Labour markets are still tight: the unemployment rate is near historic lows and businesses are reporting ongoing difficulty finding workers. However, there is growing evidence that restrictive monetary policy is slowing activity, especially household spending. Consumption growth has moderated from the first half of 2022 and housing market activity has declined substantially. As the effects of interest rate increases continue to work through the economy, spending on consumer services and business investment are expected to slow. Meanwhile, weaker foreign demand will likely weigh on exports. This overall slowdown in activity will allow supply to catch up with demand.

The Bank estimates Canada’s economy grew by 3.6% in 2022, slightly stronger than was projected in October. Growth is expected to stall through the middle of 2023, picking up later in the year. The Bank expects GDP growth of about 1% in 2023 and about 2% in 2024, little changed from the October outlook.

Inflation has declined from 8.1% in June to 6.3% in December, reflecting lower gasoline prices and, more recently, moderating prices for durable goods. Despite this progress, Canadians are still feeling the hardship of high inflation in their essential household expenses, with persistent price increases for food and shelter. Short-term inflation expectations remain elevated. Year-over-year measures of core inflation are still around 5%, but 3-month measures of core inflation have come down, suggesting that core inflation has peaked.

Inflation is projected to come down significantly this year. Lower energy prices, improvements in global supply conditions, and the effects of higher interest rates on demand are expected to bring CPI inflation down to around 3% in the middle of this year and back to the 2% target in 2024.

With persistent excess demand putting continued upward pressure on many prices, Governing Council decided to increase the policy interest rate by a further 25 basis points. The Bank’s ongoing program of quantitative tightening is complementing the restrictive stance of the policy rate. If economic developments evolve broadly in line with the MPR outlook, Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases. Governing Council is prepared to increase the policy rate further if needed to return inflation to the 2% target, and remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is March 8, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on April 12, 2023.

Bank of Canada Rate Announcement Dec 7th, 2022

Wed, 07 Dec 2022 15:56:10 GMT

Bank of Canada increases policy interest rate by 50 basis points, continues quantitative tightening.

FOR IMMEDIATE RELEASE

December 7, 2022

The Bank of Canada today increased its target for the overnight rate to 4¼%, with the Bank Rate at 4½% and the deposit rate at 4¼%. The Bank is also continuing its policy of quantitative tightening.

Inflation around the world remains high and broadly based. Global economic growth is slowing, although it is proving more resilient than was expected at the time of the October Monetary Policy Report (MPR). In the United States, the economy is weakening but consumption continues to be solid and the labour market remains overheated. The gradual easing of global supply bottlenecks continues, although further progress could be disrupted by geopolitical events.

In Canada, GDP growth in the third quarter was stronger than expected, and the economy continued to operate in excess demand. Canada’s labour market remains tight, with unemployment near historic lows. While commodity exports have been strong, there is growing evidence that tighter monetary policy is restraining domestic demand: consumption moderated in the third quarter, and housing market activity continues to decline. Overall, the data since the October MPR support the Bank’s outlook that growth will essentially stall through the end of this year and the first half of next year.

CPI inflation remained at 6.9% in October, with many of the goods and services Canadians regularly buy showing large price increases. Measures of core inflation remain around 5%. Three-month rates of change in core inflation have come down, an early indicator that price pressures may be losing momentum. However, inflation is still too high and short-term inflation expectations remain elevated. The longer that consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched.

Looking ahead, Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target. Governing Council continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding. Quantitative tightening is complementing increases in the policy rate. We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is January 25, 2023. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Bank of Canada Rate Announcement Oct 26th, 2022

Wed, 26 Oct 2022 15:13:41 GMT

Bank of Canada increases policy interest rate by 50 basis points, continues quantitative tightening.

FOR IMMEDIATE RELEASE

View the October 2022 Monetary Policy Report

October 26, 2022

The Bank of Canada today increased its target for the overnight rate to 3¾%, with the Bank Rate at 4% and the deposit rate at 3¾%. The Bank is also continuing its policy of quantitative tightening.

Inflation around the world remains high and broadly based. This reflects the strength of the global recovery from the pandemic, a series of global supply disruptions, and elevated commodity prices, particularly for energy, which have been pushed up by Russia’s attack on Ukraine. The strength of the US dollar is adding to inflationary pressures in many countries. Tighter monetary policies aimed at controlling inflation are weighing on economic activity around the world. As economies slow and supply disruptions ease, global inflation is expected to come down.

In the United States, labour markets remain very tight even as restrictive financial conditions are slowing economic activity. The Bank projects no growth in the US economy through most of next year. In the euro area, the economy is forecast to contract in the quarters ahead, largely due to acute energy shortages. China’s economy appears to have picked up after the recent round of pandemic lockdowns, although ongoing challenges related to its property market will continue to weigh on growth. Overall, the Bank projects that global growth will slow from 3% in 2022 to about 1½% in 2023, and then pick back up to roughly 2½% in 2024. This is a slower pace of growth than was projected in the Bank’s July Monetary Policy Report (MPR).

In Canada, the economy continues to operate in excess demand and labour markets remain tight. The demand for goods and services is still running ahead of the economy’s ability to supply them, putting upward pressure on domestic inflation. Businesses continue to report widespread labour shortages and, with the full reopening of the economy, strong demand has led to a sharp rise in the price of services.

The effects of recent policy rate increases by the Bank are becoming evident in interest-sensitive areas of the economy: housing activity has retreated sharply, and spending by households and businesses is softening. Also, the slowdown in international demand is beginning to weigh on exports. Economic growth is expected to stall through the end of this year and the first half of next year as the effects of higher interest rates spread through the economy. The Bank projects GDP growth will slow from 3¼% this year to just under 1% next year and 2% in 2024.

In the last three months, CPI inflation has declined from 8.1% to 6.9%, primarily due to a fall in gasoline prices. However, price pressures remain broadly based, with two-thirds of CPI components increasing more than 5% over the past year. The Bank’s preferred measures of core inflation are not yet showing meaningful evidence that underlying price pressures are easing. Near-term inflation expectations remain high, increasing the risk that elevated inflation becomes entrenched.

The Bank expects CPI inflation to ease as higher interest rates help rebalance demand and supply, price pressures from global supply disruptions fade, and the past effects of higher commodity prices dissipate. CPI inflation is projected to move down to about 3% by the end of 2023, and then return to the 2% target by the end of 2024.

Given elevated inflation and inflation expectations, as well as ongoing demand pressures in the economy, the Governing Council expects that the policy interest rate will need to rise further. Future rate increases will be influenced by our assessments of how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding. Quantitative tightening is complementing increases in the policy rate. We are resolute in our commitment to restore price stability for Canadians and will continue to take action as required to achieve the 2% inflation target.

Information note

The next scheduled date for announcing the overnight rate target is December 7, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on January 25, 2023.

Bank of Canada Rate Announcement Sept 7th, 2022

Wed, 07 Sep 2022 15:19:51 GMT

Bank of Canada increases policy interest rate by 75 basis points, continues quantitative tightening.

FOR IMMEDIATE RELEASE

September 7, 2022

The Bank of Canada today increased its target for the overnight rate to 3¼%, with the Bank Rate at 3½% and the deposit rate at 3¼%. The Bank is also continuing its policy of quantitative tightening.

The global and Canadian economies are evolving broadly in line with the Bank’s July projection. The effects of COVID-19 outbreaks, ongoing supply disruptions, and the war in Ukraine continue to dampen growth and boost prices.

Global inflation remains high and measures of core inflation are moving up in most countries. In response, central banks around the world continue to tighten monetary policy. Economic activity in the United States has moderated, although the US labour market remains tight. China is facing ongoing challenges from COVID shutdowns. Commodity prices have been volatile: oil, wheat and lumber prices have moderated while natural gas prices have risen.

In Canada, CPI inflation eased in July to 7.6% from 8.1% because of a drop in gasoline prices. However, inflation excluding gasoline increased and data indicate a further broadening of price pressures, particularly in services. The Bank’s core measures of inflation continued to move up, ranging from 5% to 5.5% in July. Surveys suggest that short-term inflation expectations remain high. The longer this continues, the greater the risk that elevated inflation becomes entrenched.

The Canadian economy continues to operate in excess demand and labour markets remain tight. Canada’s GDP grew by 3.3% in the second quarter. While this was somewhat weaker than the Bank had projected, indicators of domestic demand were very strong – consumption grew by about 9½% and business investment was up by close to 12%. With higher mortgage rates, the housing market is pulling back as anticipated, following unsustainable growth during the pandemic. The Bank continues to expect the economy to moderate in the second half of this year, as global demand weakens and tighter monetary policy here in Canada begins to bring demand more in line with supply.

Given the outlook for inflation, the Governing Council still judges that the policy interest rate will need to rise further. Quantitative tightening is complementing increases in the policy rate. As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target. The Governing Council remains resolute in its commitment to price stability and will continue to take action as required to achieve the 2% inflation target.

INFORMATION NOTE

The next scheduled date for announcing the overnight rate target is October 26, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

News Release July 2022

Thu, 21 Jul 2022 19:52:33 GMT

Learn More:

Red the report, Enhancing Consumer Protection in B.C.'s Real Estate Market, here: https://www.bcfsa.ca/media/2861/download

Contact:

Media Relations

Ministry of Finance

250-208-0706

Connect with the Province of B.C. at: https://news.gov.bc.ca/connect

Bank of Canada Rate Announcement Jul 13th, 2022

Wed, 13 Jul 2022 14:31:23 GMT

Bank of Canada increases policy interest rate by 100 basis points, continues quantitative tightening.

FOR IMMEDIATE RELEASE

July 13, 2022

The Bank of Canada today increased its target for the overnight rate to 2½%, with the Bank Rate at 2¾% and the deposit rate at 2½%. The Bank is also continuing its policy of quantitative tightening (QT).

Inflation in Canada is higher and more persistent than the Bank expected in its April Monetary Policy Report (MPR), and will likely remain around 8% in the next few months. While global factors such as the war in Ukraine and ongoing supply disruptions have been the biggest drivers, domestic price pressures from excess demand are becoming more prominent. More than half of the components that make up the CPI are now rising by more than 5%. With this broadening of price pressures, the Bank’s core measures of inflation have moved up to between 3.9% and 5.4%. Also, surveys indicate more consumers and businesses are expecting inflation to be higher for longer, raising the risk that elevated inflation becomes entrenched in price- and wage-setting. If that occurs, the economic cost of restoring price stability will be higher.

Global inflation is higher, reflecting the impact of the Russian invasion of Ukraine, ongoing supply constraints, and strong demand. Many central banks are tightening monetary policy to combat inflation, and the resulting tighter financial conditions are moderating economic growth. In the United States, high inflation and rising interest rates are contributing to a slowdown in domestic demand. China’s economy is being held back by waves of restrictive measures to contain COVID-19 outbreaks. Oil prices remain high and volatile. The Bank now expects global economic growth to slow to about 3½% this year and 2% in 2023 before strengthening to 3% in 2024.

Further excess demand has built up in the Canadian economy. Labour markets are tight with a record low unemployment rate, widespread labour shortages, and increasing wage pressures. With strong demand, businesses are passing on higher input and labour costs by raising prices. Consumption is robust, led by a rebound in spending on hard-to-distance services. Business investment is solid and exports are being boosted by elevated commodity prices. The Bank estimates that GDP grew by about 4% in the second quarter. Growth is expected to slow to about 2% in the third quarter as consumption growth moderates and housing market activity pulls back following unsustainable strength during the pandemic.

The Bank expects Canada’s economy to grow by 3½% in 2022, 1¾% in 2023, and 2½% in 2024. Economic activity will slow as global growth moderates and tighter monetary policy works its way through the economy. This, combined with the resolution of supply disruptions, will bring demand and supply back into balance and alleviate inflationary pressures. Global energy prices are also projected to decline. The July outlook has inflation starting to come back down later this year, easing to about 3% by the end of next year and returning to the 2% target by the end of 2024.

With the economy clearly in excess demand, inflation high and broadening, and more businesses and consumers expecting high inflation to persist for longer, the Governing Council decided to front-load the path to higher interest rates by raising the policy rate by 100 basis points today. The Governing Council continues to judge that interest rates will need to rise further, and the pace of increases will be guided by the Bank’s ongoing assessment of the economy and inflation. Quantitative tightening continues and is complementing increases in the policy interest rate. The Governing Council is resolute in its commitment to price stability and will continue to take action as required to achieve the 2% inflation target.

Information note

The next scheduled date for announcing the overnight rate target is September 7, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on October 26, 2022.

Bank of Canada Rate Announcement Jun 1st 2022

Wed, 01 Jun 2022 14:42:53 GMT

Bank of Canada increases policy interest rate by 50 basis points, continues quantitative tightening.

FOR IMMEDIATE RELEASE

June 1, 2022

The Bank of Canada today increased its target for the overnight rate to 1½%, with the Bank Rate at 1¾% and the deposit rate at 1½%. The Bank is also continuing its policy of quantitative tightening (QT).

Inflation globally and in Canada continues to rise, largely driven by higher prices for energy and food. In Canada, CPI inflation reached 6.8% for the month of April – well above the Bank’s forecast – and will likely move even higher in the near term before beginning to ease. As pervasive input price pressures feed through into consumer prices, inflation continues to broaden, with core measures of inflation ranging between 3.2% and 5.1%. Almost 70% of CPI categories now show inflation above 3%. The risk of elevated inflation becoming entrenched has risen. The Bank will use its monetary policy tools to return inflation to target and keep inflation expectations well anchored.

The increase in global inflation is occurring as the global economy slows. The Russian invasion of Ukraine, China’s COVID-related lockdowns, and ongoing supply disruptions are all weighing on activity and boosting inflation. The war has increased uncertainty and is putting further upward pressure on prices for energy and agricultural commodities. This is dampening the outlook, particularly in Europe. In the United States, private domestic demand remains robust, despite the economy contracting in the first quarter of 2022. US labour market strength continues, with wage pressures intensifying. Global financial conditions have tightened and markets have been volatile.

Canadian economic activity is strong and the economy is clearly operating in excess demand. National accounts data for the first quarter of 2022 showed GDP growth of 3.1 percent, in line with the Bank’s April Monetary Policy Report (MPR) projection. Job vacancies are elevated, companies are reporting widespread labour shortages, and wage growth has been picking up and broadening across sectors. Housing market activity is moderating from exceptionally high levels. With consumer spending in Canada remaining robust and exports anticipated to strengthen, growth in the second quarter is expected to be solid.

With the economy in excess demand, and inflation persisting well above target and expected to move higher in the near term, the Governing Council continues to judge that interest rates will need to rise further. The policy interest rate remains the Bank’s primary monetary policy instrument, with quantitative tightening acting as a complementary tool. The pace of further increases in the policy rate will be guided by the Bank’s ongoing assessment of the economy and inflation, and the Governing Council is prepared to act more forcefully if needed to meet its commitment to achieve the 2% inflation target.

Information note

The next scheduled date for announcing the overnight rate target is July 13, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Bank of Canada Rate Announcement Apr 13th 2022

Wed, 13 Apr 2022 14:39:18 GMT

Bank of Canada increases policy interest rate by 50 basis points, begins quantitative tightening.

FOR IMMEDIATE RELEASE

April 13, 2022

The Bank of Canada today increased its target for the overnight rate to 1%, with the Bank Rate at 1¼% and the deposit rate at 1%. The Bank is also ending reinvestment and will begin quantitative tightening (QT), effective April 25. Maturing Government of Canada bonds on the Bank’s balance sheet will no longer be replaced and, as a result, the size of the balance sheet will decline over time.

Russia’s ongoing invasion of Ukraine is causing unimaginable human suffering and new economic uncertainty. Price spikes in oil, natural gas and other commodities are adding to inflation around the world. Supply disruptions resulting from the war are also exacerbating ongoing supply constraints and weighing on activity. These factors are the primary drivers of a substantial upward revision to the Bank’s outlook for inflation in Canada.

The war in Ukraine is disrupting the global recovery, just as most economies are emerging from the impact of the Omicron variant of COVID-19. European countries are more directly impacted by confidence effects and supply dislocations caused by the war. China’s economy is facing new COVID outbreaks and an ongoing correction in its property market. In the United States, domestic demand remains very strong and the US Federal Reserve has clearly indicated its resolve to use its monetary policy tools to control inflation. As policy stimulus is withdrawn, US growth is expected to moderate to a pace more in line with potential growth. Global financial conditions have tightened and volatility has increased. The Bank now forecasts global growth of about 3½% this year, 2½% in 2023 and 3¼% in 2024.

In Canada, growth is strong and the economy is moving into excess demand. Labour markets are tight, and wage growth is back to its pre-pandemic pace and rising. Businesses increasingly report they are having difficulty meeting demand, and are able to pass on higher input costs by increasing prices. While the COVID-19 virus continues to mutate and circulate, high rates of vaccination have reduced its health and economic impacts. Growth looks to have been stronger in the first quarter than projected in January and is likely to pick up in the second quarter. Consumer spending is strengthening with the lifting of pandemic containment measures. Exports and business investment will continue to recover, supported by strong foreign demand and high commodity prices. Housing market activity, which has been exceptionally high, is expected to moderate.

The Bank forecasts that Canada’s economy will grow by 4¼% this year before slowing to 3¼% in 2023 and 2¼% in 2024. Robust business investment, labour productivity growth and higher immigration will add to the economy’s productive capacity, while higher interest rates should moderate growth in domestic demand.

CPI inflation in Canada is 5.7%, above the Bank’s forecast in its January Monetary Policy Report (MPR). Inflation is being driven by rising energy and food prices and supply disruptions, in combination with strong global and domestic demand. Core measures of inflation have all moved higher as price pressures broaden. CPI inflation is now expected to average almost 6% in the first half of 2022 and remain well above the control range throughout this year. It is then expected to ease to about 2½% in the second half of 2023 and return to the 2% target in 2024. There is an increasing risk that expectations of elevated inflation could become entrenched. The Bank will use its monetary policy tools to return inflation to target and keep inflation expectations well-anchored.

With the economy moving into excess demand and inflation persisting well above target, the Governing Council judges that interest rates will need to rise further. The policy interest rate is the Bank’s primary monetary policy instrument, and quantitative tightening will complement increases in the policy rate. The timing and pace of further increases in the policy rate will be guided by the Bank’s ongoing assessment of the economy and its commitment to achieving the 2% inflation target.

Information note

The next scheduled date for announcing the overnight rate target is June 1, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on July 13, 2022.

A market notice providing operational details for QT will be published this morning on the Bank’s web site.

Bank of Canada Rate Announcement Mar 2nd, 2022

Wed, 02 Mar 2022 15:36:24 GMT

Bank of Canada increases policy interest rate.

FOR IMMEDIATE RELEASE

March 2, 2022

The Bank of Canada today increased its target for the overnight rate to ½ %, with the Bank Rate at ¾ % and the deposit rate at ½ %. The Bank is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds on its balance sheet roughly constant until such time as it becomes appropriate to allow the size of its balance sheet to decline.

The unprovoked invasion of Ukraine by Russia is a major new source of uncertainty. Prices for oil and other commodities have risen sharply. This will add to inflation around the world, and negative impacts on confidence and new supply disruptions could weigh on global growth. Financial market volatility has increased. The situation remains fluid and we are following events closely.

Global economic data has come in broadly in line with projections in the Bank’s January Monetary Policy Report (MPR). Economies are emerging from the impact of the Omicron variant of COVID-19 more quickly than expected, although the virus continues to circulate and the possibility of new variants remains a concern. Demand is robust, particularly in the United States. Global supply bottlenecks remain challenging, although there are indications that some constraints have eased.

Economic growth in Canada was very strong in the fourth quarter of last year at 6.7%. This is stronger than the Bank’s projection and confirms its view that economic slack has been absorbed. Both exports and imports have picked up, consistent with solid global demand. In January, the recovery in Canada’s labour market suffered a setback due to the Omicron variant, with temporary layoffs in service sectors and elevated employee absenteeism. However, the rebound from Omicron now appears to be well in train: household spending is proving resilient and should strengthen further with the lifting of public health restrictions. Housing market activity is more elevated, adding further pressure to house prices. Overall, first-quarter growth is now looking more solid than previously projected.

CPI inflation is currently at 5.1%, as expected in January, and remains well above the Bank’s target range. Price increases have become more pervasive, and measures of core inflation have all risen. Poor harvests and higher transportation costs have pushed up food prices. The invasion of Ukraine is putting further upward pressure on prices for both energy and food-related commodities. All told, inflation is now expected to be higher in the near term than projected in January. Persistently elevated inflation is increasing the risk that longer-run inflation expectations could drift upwards. The Bank will use its monetary policy tools to return inflation to the 2% target and keep inflation expectations well-anchored.

The policy rate is the Bank’s primary monetary policy instrument. As the economy continues to expand and inflation pressures remain elevated, the Governing Council expects interest rates will need to rise further. The Governing Council will also be considering when to end the reinvestment phase and allow its holdings of Government of Canada bonds to begin to shrink. The resulting quantitative tightening (QT) would complement increases in the policy interest rate. The timing and pace of further increases in the policy rate, and the start of QT, will be guided by the Bank’s ongoing assessment of the economy and its commitment to achieving the 2% inflation target.

Information note

The next scheduled date for announcing the overnight rate target is April 13, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

Bank of Canada Rate Announcement Jan 26th, 2022

Wed, 26 Jan 2022 16:22:51 GMT

Bank of Canada maintains policy rate, removes exceptional forward guidance.

FOR IMMEDIATE RELEASE

Monetary Policy Report October 2021.

January 26, 2022

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ %, with the Bank Rate at ½ % and the deposit rate at ¼ %. With overall economic slack now absorbed, the Bank has removed its exceptional forward guidance on its policy interest rate. The Bank is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds roughly constant.

The global recovery from the COVID-19 pandemic is strong but uneven. The US economy is growing robustly while growth in some other regions appears more moderate, especially in China due to current weakness in its property sector. Strong global demand for goods combined with supply bottlenecks that hinder production and transportation are pushing up inflation in most regions. As well, oil prices have rebounded to well above pre-pandemic levels following a decline at the onset of the Omicron variant of COVID-19. Financial conditions remain broadly accommodative but have tightened with growing expectations that monetary policy will normalize sooner than was anticipated, and with rising geopolitical tensions. Overall, the Bank projects global GDP growth to moderate from 6¾ % in 2021 to about 3½ % in 2022 and 2023.

In Canada, GDP growth in the second half of 2021 now looks to have been even stronger than expected. The economy entered 2022 with considerable momentum, and a broad set of measures are now indicating that economic slack is absorbed. With strong employment growth, the labour market has tightened significantly. Job vacancies are elevated, hiring intentions are strong, and wage gains are picking up. Elevated housing market activity continues to put upward pressure on house prices.

The Omicron variant is weighing on activity in the first quarter. While its economic impact will depend on how quickly this wave passes, it is expected to be less severe than previous waves. Economic growth is then expected to bounce back and remain robust over the projection horizon, led by consumer spending on services, and supported by strength in exports and business investment. After GDP growth of 4½ % in 2021, the Bank expects Canada’s economy to grow by 4% in 2022 and about 3½ % in 2023.

CPI inflation remains well above the target range and core measures of inflation have edged up since October. Persistent supply constraints are feeding through to a broader range of goods prices and, combined with higher food and energy prices, are expected to keep CPI inflation close to 5% in the first half of 2022. As supply shortages diminish, inflation is expected to decline reasonably quickly to about 3% by the end of this year and then gradually ease towards the target over the projection period. Near-term inflation expectations have moved up, but longer-run expectations remain anchored on the 2% target. The Bank will use its monetary policy tools to ensure that higher near-term inflation expectations do not become embedded in ongoing inflation.

While COVID-19 continues to affect economic activity unevenly across sectors, the Governing Council judges that overall slack in the economy is absorbed, thus satisfying the condition outlined in the Bank’s forward guidance on its policy interest rate. The Governing Council therefore decided to end its extraordinary commitment to hold its policy rate at the effective lower bound. Looking ahead, the Governing Council expects interest rates will need to increase, with the timing and pace of those increases guided by the Bank’s commitment to achieving the 2% inflation target.

The Bank will keep its holdings of Government of Canada bonds on its balance sheet roughly constant at least until it begins to raise the policy interest rate. At that time, the Governing Council will consider exiting the reinvestment phase and reducing the size of its balance sheet by allowing roll-off of maturing Government of Canada bonds.

Information note

The next scheduled date for announcing the overnight rate target is March 2, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report on April 13, 2022.

Bank of Canada Rate Announcement Dec 8th, 2021

Wed, 08 Dec 2021 16:01:14 GMT

Bank of Canada maintains policy rate and forward guidance

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank’s extraordinary forward guidance on the path for the overnight rate is being maintained. The Bank is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds roughly constant.

The global economy continues to recover from the effects of the COVID-19 pandemic. Economic growth in the United States has accelerated, led by consumption, while growth in some other regions is moderating after a strong third quarter. Inflation has increased further in many countries, reflecting strong demand for goods amid ongoing supply disruptions. The new Omicron COVID-19 variant has prompted a tightening of travel restrictions in many countries and a decline in oil prices, and has injected renewed uncertainty. Accommodative financial conditions are still supporting economic activity.

Canada’s economy grew by about 5½ percent in the third quarter, as expected. Together with a downward revision to the second quarter, this brings the level of GDP to about 1½ percent below its level in the last quarter of 2019, before the pandemic began. Third-quarter growth was led by a rebound in consumption, particularly services, as restrictions were further eased and higher vaccination rates improved confidence. Persistent supply bottlenecks continued to inhibit growth in other components of GDP, including non-commodity exports and business investment.

Recent economic indicators suggest the economy had considerable momentum into the fourth quarter. This includes broad-based job gains in recent months that have brought the employment rate essentially back to its pre-pandemic level. Job vacancies remain elevated and wage growth has also picked up. Housing activity had been moderating, but appears to be regaining strength, notably in resales. The devastating floods in British Columbia and uncertainties arising from the Omicron variant could weigh on growth by compounding supply chain disruptions and reducing demand for some services.

CPI inflation is elevated and the impact of global supply constraints is feeding through to a broader range of goods prices. The effects of these constraints on prices will likely take some time to work their way through, given existing supply backlogs. Gasoline prices, which had been a major factor pushing up CPI inflation, have recently declined. Meanwhile, core measures of inflation are little changed since September. The Bank continues to expect CPI inflation to remain elevated in the first half of 2022 and ease back towards 2 percent in the second half of the year. The Bank is closely watching inflation expectations and labour costs to ensure that the forces pushing up prices do not become embedded in ongoing inflation.

The Governing Council judges that in view of ongoing excess capacity, the economy continues to require considerable monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s October projection, this happens sometime in the middle quarters of 2022. We will provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation target.

Information note

The next scheduled date for announcing the overnight rate target is January 26, 2022. The Bank will publish its full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report at the same time.

Bank of Canada Rate Announcement Oct 27th, 2021

Wed, 27 Oct 2021 14:44:50 GMT

Bank of Canada maintains policy rate and forward guidance, ends quantitative easing.

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank’s extraordinary forward guidance on the path for the overnight rate is being maintained. The Bank is ending quantitative easing (QE) and moving into the reinvestment phase, during which it will purchase Government of Canada bonds solely to replace maturing bonds.

The global economic recovery from the COVID-19 pandemic is progressing. Vaccines are proving highly effective against the virus, although their availability and distribution globally remain uneven and COVID variants pose risks to health and economic activity. In the face of strong global demand for goods, pandemic-related disruptions to production and transportation are constraining growth. Inflation rates have increased in many countries, boosted by these supply bottlenecks and by higher energy prices. While bond yields have risen in recent weeks, financial conditions remain accommodative and continue to support economic activity.

The Bank projects global GDP will grow by 6½ percent in 2021 – a strong pace but less than projected in the July Monetary Policy Report (MPR) – and by 4¼ percent in 2022 and about 3½ percent in 2023.

In Canada, robust economic growth has resumed, following a pause in the second quarter. Strong employment gains in recent months were concentrated in hard-to-distance sectors and among workers most affected by lockdowns. This has significantly reduced the very uneven impact of the pandemic on workers. As the economy reopens, it is taking time for workers to find the right jobs and for employers to hire people with the right skills. This is contributing to labour shortages in certain sectors, even as slack remains in the overall labour market.

The Bank now forecasts Canada’s economy will grow by 5 percent this year before moderating to 4¼ percent in 2022 and 3¾ percent in 2023. Demand is expected to be supported by strong consumption and business investment, and a rebound in exports as the US economy continues to recover. Housing activity has moderated, but is expected to remain elevated. On the supply side, shortages of manufacturing inputs, transportation bottlenecks, and difficulties in matching jobs to workers are limiting the economy’s productive capacity. Although the impact and persistence of these supply factors are hard to quantify, the output gap is likely to be narrower than the Bank had forecast in July.

The recent increase in CPI inflation was anticipated in July, but the main forces pushing up prices – higher energy prices and pandemic-related supply bottlenecks – now appear to be stronger and more persistent than expected. Core measures of inflation have also risen, but by less than the CPI. The Bank now expects CPI inflation to be elevated into next year, and ease back to around the 2 percent target by late 2022. The Bank is closely watching inflation expectations and labour costs to ensure that the temporary forces pushing up prices do not become embedded in ongoing inflation.

The Governing Council judges that in view of ongoing excess capacity, the economy continues to require considerable monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s projection, this happens sometime in the middle quarters of 2022. In light of the progress made in the economic recovery, the Governing Council has decided to end quantitative easing and keep its overall holdings of Government of Canada bonds roughly constant.

We will continue to provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation target.

Information notes

A market notice outlining details of the reinvestment phase will be published on the Bank’s web site at 10:30 am ET today.

The next scheduled date for announcing the overnight rate target is December 8, 2021. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on January 26, 2022.

Bank of Canada Rate Announcement Sept 8th, 2021

Wed, 08 Sep 2021 14:36:13 GMT

Bank of Canada maintains policy rate, continues forward guidance and current pace of quantitative easing

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance on the path for the overnight rate. This is reinforced and supplemented by the Bank’s quantitative easing (QE) program, which is being maintained at a target pace of $2 billion per week.

The global economic recovery continued through the second quarter, led by strong US growth, and had solid momentum heading into the third quarter. However, supply chain disruptions are restraining activity in some sectors and rising cases of COVID-19 in many regions pose a risk to the strength of the global recovery. Financial conditions remain highly accommodative.

In Canada, GDP contracted by about 1 percent in the second quarter, weaker than anticipated in the Bank’s July Monetary Policy Report (MPR). This largely reflects a contraction in exports, due in part to supply chain disruptions, especially in the auto sector. Housing market activity pulled back from recent high levels, largely as expected. Consumption, business investment and government spending all contributed positively to growth, with domestic demand growing at more than 3 percent.

Employment rebounded through June and July, with hard-to-distance sectors hiring as public health restrictions eased. This is reducing unevenness in the labour market, although considerable slack remains and some groups – particularly low-wage workers – are still disproportionately affected. The Bank continues to expect the economy to strengthen in the second half of 2021, although the fourth wave of COVID-19 infections and ongoing supply bottlenecks could weigh on the recovery.

CPI inflation remains above 3 percent as expected, boosted by base-year effects, gasoline prices, and pandemic-related supply bottlenecks. These factors pushing up inflation are expected to be transitory, but their persistence and magnitude are uncertain and will be monitored closely. Wage increases have been moderate to date, and medium-term inflation expectations remain well-anchored. Core measures of inflation have risen, but by less than the CPI.

The Governing Council judges that the Canadian economy still has considerable excess capacity, and that the recovery continues to require extraordinary monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s July projection, this happens in the second half of 2022. The Bank's QE program continues to reinforce this commitment and keep interest rates low across the yield curve. Decisions regarding future adjustments to the pace of net bond purchases will be guided by Governing Council's ongoing assessment of the strength and durability of the recovery. We will continue to provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation objective.

Information note

The next scheduled date for announcing the overnight rate target is October 27, 2021. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR at the same time.

Bank of Canada Rate Announcement Jul 14th, 2021

Wed, 14 Jul 2021 14:38:52 GMT

Bank of Canada maintains policy rate and forward guidance, adjusts quantitative easing program.

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance on the path for the overnight rate. This is reinforced and supplemented by the Bank’s quantitative easing (QE) program, which is being adjusted to a target pace of $2 billion per week. This adjustment reflects continued progress towards recovery and the Bank’s increased confidence in the strength of the Canadian economic outlook.

The global economy is recovering strongly from the COVID-19 pandemic, with continued progress on vaccinations, particularly in advanced economies. However, the recovery is still highly uneven and remains dependent on the course of the virus. The recent spread of new COVID-19 variants is a growing concern, especially for regions where vaccinations rates remain low.

Global GDP growth is expected to reach 7 percent this year and then moderate to about 4 ½ percent in 2022 and just over 3 percent in 2023. This a slightly stronger forecast than the one in the Bank’s April Monetary Policy Report (MPR) and primarily reflects a stronger US outlook. Global financial conditions remain highly accommodative. Rising demand is supporting higher oil prices, while non-energy commodity prices remain elevated. The Canada-US exchange rate is little changed since April.

In Canada, the third wave of the virus slowed growth in the second quarter. However, falling COVID-19 cases, progress on vaccinations and easing containment restrictions all point to a strong pickup in the second half of this year. The Bank now expects GDP growth of around 6 percent in 2021 – a little slower than was expected in April – but has revised up its 2022 forecast to 4 ½ percent and projects 3 ¼ percent growth in 2023.

Consumption is expected to lead the recovery as households return to more normal spending patterns, while housing market activity is projected to ease back from historical highs. Stronger international demand should underpin a solid recovery in exports. As domestic and foreign demand increases and confidence improves, business investment will gain strength. Employment has once again begun to rebound, and we expect the hardest-hit segments of the labour market to post strong gains as the economy re-opens. However, the pace of the recovery will vary among industries and workers, and it could take some time to hire workers with the right skills to fill jobs. The aftermath of lockdowns and ongoing structural changes in the economy both mean that estimates of potential output and when the output gap will close are particularly uncertain.

CPI inflation was 3.6 percent in May, boosted by temporary factors that include base-year effects and stronger gasoline prices, as well as pandemic-related bottlenecks as economies re-open. Core measures of inflation have also risen but by less than the CPI. In some high-contact services, demand is rebounding faster than supply, pushing up prices from low levels. Transitory supply constraints in shipping and value chain disruptions for semiconductors are also translating into higher prices for cars and some other goods. With higher gasoline prices and on-going supply bottlenecks, inflation is likely to remain above 3 percent through the second half of this year and ease back toward 2 percent in 2022, as short-run imbalances diminish and the considerable overall slack in the economy pulls inflation lower. The factors pushing up inflation are transitory, but their persistence and magnitude are uncertain and will be monitored closely.

The Governing Council judges that the Canadian economy still has considerable excess capacity, and that the recovery continues to require extraordinary monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s July projection, this happens sometime in the second half of 2022. The Bank's QE program continues to reinforce this commitment and keep interest rates low across the yield curve. Decisions regarding further adjustments to the pace of net bond purchases will be guided by Governing Council's ongoing assessment of the strength and durability of the recovery. We will continue to provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation objective.

Information note

The next scheduled date for announcing the overnight rate target is September 8, 2021. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on October 27, 2021.

Monetary Policy Report - July 2021

Bank of Canada Rate Announcement Jun 9th, 2021

Wed, 09 Jun 2021 14:21:31 GMT

Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved, continues quantitative easing

With COVID-19 cases falling in many countries and vaccine coverage rising, global economic activity is picking up. Growth remains uneven across regions, however. The US is experiencing a strong consumer-driven recovery and a rebound is beginning to take shape in Europe, while a resurgence of the virus is hampering the recovery in some emerging market economies. Financial conditions remain highly accommodative, reflected in broadly higher asset prices. Commodity prices have risen further, notably oil, and the Canadian dollar has seen a further appreciation.

In Canada, economic developments have been broadly in line with the outlook in the April Monetary Policy Report (MPR). Despite the second wave of the virus, first quarter GDP growth came in at a robust 5.6 per cent. While this was lower than the Bank had projected, the underlying details indicate rising confidence and resilient demand. Household spending was stronger than expected, while businesses drew down inventories and increased imports more than anticipated. Renewed lockdowns associated with the third wave are dampening economic activity in the second quarter, largely as anticipated. Recent jobs data show that workers in contact-sensitive sectors have once again been most affected. The employment rate remains well below its pre-pandemic level, with low wage workers, youth and women continuing to bear the brunt of job losses.

With vaccinations proceeding at a faster pace, and provincial containment restrictions on an easing path over the summer, the Canadian economy is expected to rebound strongly, led by consumer spending. Housing market activity is expected to moderate but remain elevated. Strong growth in foreign demand and higher commodity prices should also lead to a solid recovery in exports and business investment. Despite progress on vaccinations, there continues to be uncertainty about the evolution of new COVID-19 variants. More broadly, the risks to the inflation outlook identified in the April MPR remain relevant.

As expected, CPI inflation has risen to around the top of the 1-3 percent inflation-control range, due largely to base-year effects and much stronger gasoline prices. Core measures of inflation have also risen, due primarily to temporary factors and base year effects, but by much less than CPI inflation. While CPI inflation will likely remain near 3 percent through the summer, it is expected to ease later in the year, as base-year effects diminish and excess capacity continues to exert downward pressure.

The Governing Council judges that there remains considerable excess capacity in the Canadian economy, and that the recovery continues to require extraordinary monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s April projection, this happens sometime in the second half of 2022. The Bank is continuing its QE program to reinforce this commitment and keep interest rates low across the yield curve. Decisions regarding adjustments to the pace of net bond purchases will be guided by Governing Council’s ongoing assessment of the strength and durability of the recovery. We will continue to provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation objective.

Information note

The next scheduled date for announcing the overnight rate target is July 14, 2021. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR at the same time.

New Stress Test Qualifications as of June 1st. 2021

Mon, 24 May 2021 19:57:57 GMT

As of June 1st. 2021, if you’re looking to qualify for mortgage financing (either uninsured or insured), you will have to qualify at the greater of the contract rate plus 2% or a new “floor rate” of 5.25%.

A little background.

In early April, the Office of the Superintendent of Financial Institutions (OSFI) proposed changes to the stress test for uninsured mortgages and invited feedback from the public closing in early May 2021. Last Thursday, OSFI announced they would be moving ahead with the proposed changes to uninsured mortgages.

Immediately following OSFI’s announcement, the Department of Finance made an announcement indicating that they would follow suit and apply the same changes to the stress test on insured mortgages as well.

“The recent and rapid rise in housing prices is squeezing middle-class Canadians across the entire country and raises concerns about the stability of the overall market,” Finance Minister Chrystia Freeland said in a statement. “The federal government will align with OSFI by establishing a new minimum qualifying rate for insured mortgages… It is vitally important that homeownership remains within reach for Canadians.”

What you need to know.

It is estimated that these changes to the stress test will impact 1 in 5 mortgage applications and will reduce buying power by roughly 4% to 4.5%.

The government will review the stress test qualifying rate annually (every December) and communicate any changes well before the spring market.

After June 1st. 2021, you will have to qualify at the great of the contract rate or the floor rate of 5.25%.

If you have an active mortgage or pre-approval in place (before June 1st, 2021), please don’t hesitate to get in touch to see if these recent government changes impact you.

Insured and Uninsured Mortgage Stress Test Changes Confirmed for June 1

Fri, 21 May 2021 18:18:56 GMT

This change does not impact existing mortgage holders or buyers who already have a firm approval in place for an upcoming purchase.

Starting June 1, both insured and uninsured mortgage borrowers will be subject to a stricter stress test when qualifying for their mortgage.

The Office of the Superintendent of Financial Institutions (OSFI) confirmed on Thursday that it will move ahead with its stress test changes first announced last month , which will apply to uninsured mortgages (typically those with more than a 20% down payment).

Soon after, the Department of Finance confirmed it will follow OSFI’s lead, and apply the same higher qualifying rate to insured mortgages, or those with less than 20% down.

In both cases, borrowers will need to prove they can afford payments based on the higher of the contract rate plus 2%, or a new floor rate of 5.25%, up from the current 4.79%.

“The recent and rapid rise in housing prices is squeezing middle class Canadians across the entire country and raises concerns about the stability of the overall market,” Finance Minister Chrystia Freeland said in a statement. “The federal government will align with OSFI by establishing a new minimum qualifying rate for insured mortgages…It is vitally important that homeownership remain within reach for Canadians.”

Both OSFI and the DoF said they will review the floor rate annually, likely each December at a minimum.

The Impact on Borrowers

Applying the higher stress test to insured borrowers will impact roughly 1 in 5 mortgage borrowers, according to data from the Bank of Canada. It will also take direct aim at first-time borrowers who are more likely to be putting less than 20% down on a mortgage.

The higher minimum stress test is expected to cut maximum buying power by between 4% and 4.5%. For a median-income household, that would reduce the maximum purchase price from $442,000 to $422,000, according to previous estimates from National Bank.

It’s estimated that this change will reduce purchasing power for uninsured borrowers by between 4% and 4.5%. By comparison, the B-20 stress test implemented in January 2019 requiring homebuyers to qualify at the higher of either the 5-year posted rate or the contractual rate plus 200 basis points reduced purchasing power by 22%.

“Today’s news is both bad news and good news for (first-time buyers),” wrote Rob McLister, mortgage editor at RATESDOTCA. “Obviously, it cuts buying power, but that also means fewer people will be able to bid as much for homes, reducing some price pressure.”

Mortgage Professionals Canada issued a statement to members on Thursday, noting it was disappointed that the minister decided to move so quickly in applying the stricter stress test to insured mortgages.

“Given the traditional audience for insured mortgages, namely young aspiring middle-class families, single individuals, and the recently separated, all owner occupiers of the properties they purchase, MPC would have preferred the insured qualification rate had not been increased in the interest of this community,” the association said. “Given the rapid rise in prices, making qualification more stringent now will disqualify many of the Canadians the government has promised to support.”

Bank of Canada Concerned About Home Prices, Household Debt

The new stress test changes fell on the same day that the Bank of Canada voiced concern about unsustainable house prices and growing household debt.

“It is important to understand that the recent rapid increases in home prices are not normal,” Bank of Canada Governor Tiff Macklem said following the release of the Bank’s annual Financial System Review, which found the share of highly indebted households taking out mortgages is now up to 22%.

“Some people may be thinking that the kind of price increases we have seen recently will continue. That would be a mistake,” Macklem added. “Interest rates are very low. That means there is more potential for them to go up…Borrowers and lenders both have roles in ensuring that households can still afford to service their debt at higher rates.”

The Bank also unveiled a “House Price Exuberance Indicator” meant to measure nine major markets across Canada for expectations that local home prices will continue to rise. The indicator currently finds that the Toronto region, Montreal and Hamilton are in exuberant territory, with Ottawa not far off.

courtesy of https://www.canadianmortgagetrends.com

Bank of Canada Rate Announcement Apr 21st, 2021

Wed, 21 Apr 2021 14:33:12 GMT

Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved, adjusts quantitative easing program.

FOR IMMEDIATE RELEASE