Mortgage Articles

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.

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.

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.

Bank of Canada reduces policy rate by 25 basis points to 3%, announces end of quantitative tightening. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario 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.[ ← ] Read the January 29th, 2025 Monetary Report.

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.

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.

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.

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.