Mortgages

Everyone loves to speculate about mortgage rates, but predictions aren't facts. Lately, there has been a lot of talk about the Bank of Canada (BoC) cutting rate by 0.50% on October 23rd, as if it’s a done deal. But let’s be clear—while many are betting on this, it's still just a prediction. There's some evidence suggesting this cut may not happen exactly as expected. Employment Influence on Mortgage Rates  The last US jobs report on October 4 th reflected substantially stro

Just last week, I wrote about mortgage rates falling faster than expected , but today we’re facing a sudden spike in fixed mortgage rates. So, what’s behind this shift? Last week, the lowest 3-year fixed rate for an insured mortgage dropped to 4.09%. Rates this low weren’t anticipated until 2025. This came on the heels of the Bank of Canada reaching their 2% inflation target about a year earlier than expected, prompting faster rate cuts, which aligned with expert forecasts. B

A s we enter the fourth quarter of 2024, mortgage rates continue to fall. Fixed mortgage rates have already fallen by greater than 1.75% since they hit their peak in October 2023. At that time, most mortgage rates were in the high 5% to mid-6% range. Today, fixed mortgage rates range from 4.04% to 4.44% depending on your situation. This is the lowest they have been in more than two years.  The Bank of Canada has already dropped their rate by 0.75% with more cuts expected. The

Let’s say you’ve got six months until your mortgage renewal , and suddenly your bank calls with what they’re calling a ‘special rate’ if you renew early. It sounds like an exclusive deal—maybe even a money-saving opportunity. But there’s a catch. They usually give you a tight deadline, often just a few days, to sign the papers or else the offer disappears. The urgency can be convincing, but don’t let it fool you. This is a classic sales tactic. They know that if you feel like

The long-awaited announcement is finally here! As of December 15th, 2024, the Department of Finance will raise the maximum price limit on CMHC-insured mortgages from $999,999 to $1.5 million. This is a game-changer, especially for homebuyers in Canada’s hottest real estate markets like the GTA and GVA, where skyrocketing prices have made it tough for many first-time buyers to get in the game. Not only have they hiked the cap to a more reasonable level, it will now be possibl

It’s the talk of the town, mortgage rates are falling… and falling fast. In fact, fixed mortgage rates have plummeted by as much as 1.50% since they reached their recent peak in October 2023.  Meanwhile, the Bank of Canada has cut its overnight rate by 0.75% since their rate cutting cycle began on June 5 th 2024, with more reductions on the horizon.  Why Aren’t Rates Dropping Evenly?  Fixed mortgage rates don’t follow the Bank of Canada’s rate cuts directly.  As I say time

The Bank of Canada has just made another move, dropping the overnight rate by 0.25%—the third cut in a row. While it might not have been a nail-biting wait, it was exactly what most experts predicted. Any other outcome would have been a surprise.  This is fantastic news for those with variable rate mortgages , as their interest rate will drop by 0.25%. In most cases, this will also mean a decrease in their mortgage payment.  But what does this mean for those eyeing fixed mort

When it comes to managing your mortgage, understanding prepayment privileges can make a significant difference in how quickly you can pay down your loan. These privileges are often represented by numbers like 10/10 or 20/20, but what do they really mean? Let’s break it down and explore how these numbers can impact your mortgage strategy. Decoding the Numbers: What Do 10/10 and 20/20 Really Mean? The first number in the prepayment privilege, such as the "20" in 20/20, indicate

If your mortgage renewal is approaching, you might be facing higher payments due to increased interest rates. Most mortgage holders had to qualify for their mortgage based on a higher "stress test" rate. This means they had to prove they could afford payments even if rates increased—ensuring payments remain manageable despite rising rates. While payments should still be affordable given the initial stress test, the reality is that today’s higher rates will lead to a hefty ju

When you select your mortgage product, you’re entering into a contractual agreement with the lender for a specific closed term. Should you find yourself needing to return the mortgage early, you’re essentially breaching your contract with the lender. Consequently, the lender will then impose a penalty for breaking it early.  Think of this as the lender’s return policy. If you’re purchasing something that you’re not 100% sure you’ll want to keep, you’ll want to learn about the

When purchasing a property with less than 20% down payment, mortgage default insurance (CMHC for example) is required. The advantage is that you’ll likely receive a lower mortgage rate . Possibly, much lower.  The maximum amortization is limited to 25 years on insured mortgages.  However, as of August 1 st , 2024, 30-year amortization will now be available for those meeting the following criteria:  The new purchase must be a new build home or condo. (Resale purchases are inel

This morning’s rate announcement from the Bank of Canada was music to the ears of anyone currently in a variable rate mortgage. They came through with another 0.25% cut, which means that we can expect mortgage lenders to drop their prime rate accordingly.  The drop was what we were expecting. While it’s possible that the BoC could have waited until September to come through with the cut, the labour market continued to weaken, contributing to bringing inflation back to a downw

Since the Bank of Canada initiated the rate-cutting cycle with a 0.25% reduction on June 5th, there has been speculation about a subsequent cut during the next scheduled announcement on July 24th. In the interim, several key jobs and inflation reports were expected from both sides of the border. Now that we have the results of those reports, we have a clearer picture of what to anticipate on July 24th. Predicting the Future It's important to remember that even the best econom

Every mortgage comes with a maturity date, which marks the end of your mortgage term. This can informally be referred to as your renewal date. If you’re fortunate enough to have a zero balance on this date, then that’s it! You’re now mortgage-free and no further action is needed.  But if you’re like most people, you’ll still have a sizeable balance that will require a new mortgage term. This is a golden opportunity to save thousands!  The biggest and most costly mistake many

While variable rate mortgages used to be a popular choice for many, they have since left a bad taste in the mouths of many given the substantial increases to prime rate in 2022 and 2023. Economists were forecasting increases by as much as 1.25% in 2022, but the actual number ended up being 4.00%, with additional increases in 2023. For this reason, even the most die-hard variable rate advocates have been hesitant to take the chance on variable, leading the vast majority to cho

The Bank of Canada rate cut on June 5 th was the first in more than four years. With four straight months of declining inflation, the Bank of Canada had the confidence to move forward with the chop.  As there was still some uncertainty as to whether we would see the cut in June, bond yields reacted positively by dropping sharply, leading to most lenders cutting their fixed mortgage rates by 0.10% to 0.15%, depending on the lender.  This was positive news which appeared to pa

Following the substantial rate increasing madness we experienced in 2022 and 2023, the 0.25% rate cut from the Bank of Canada on June 6th th was a huge relief. Particularly to those in variable rate mortgages… giving them the much-needed break they have been waiting for.  Now we get to enjoy the fun part!  A downward trend in mortgage rates. But how many more cuts are coming, and how quickly will they arrive?  Current Rate Forecasts from the Big Six Banks  Of all the big ba

The mortgage arrangement process can seem simple and effortless, or it can become exhausting with one document requirement after another. If you have a better understanding of what a mortgage lender is looking for, and why they require certain documents, then the majority of those applying for a mortgage will find the process a breeze.  Our goal is to ensure you have the best experience possible, and the better job we do at helping you understand the process, the easier it is

For the first time in over four years, the Bank of Canada has delivered a highly anticipated rate cut! As I say in my book , the BoC has a consistent pattern: they have never hiked rates without coming through with a cut within the same 5 year period. The trend continues!  We all knew rate cuts were on the horizon; it was just a matter of time.  And this is just the beginning!  If you're currently in a variable rate mortgage, get ready to celebrate. The Bank of Canada is expe

Everyone is looking to save as much money as they can with their mortgage, and locking in at the lowest mortgage rate on the market is top priority. There is so much talk about the Bank of Canada dropping their rate that many are waiting for the next announcement before they make the decision to begin the mortgage approval process. But there are two reasons why this is not necessary: 1. The Bank of Canada announcements apply to variable rate mortgages only. 2. Beginning the a