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The Bank of Canada handed out an early holiday gift on December 11th with a much-anticipated 0.50% rate cut. If you have a variable-rate mortgage, you’re probably smiling as your rate just dipped. And if you’re in an adjustable-rate mortgage, your monthly payment joined the party.  But here’s the twist: on the very same day the Bank of Canada lowered rates, bond yields spiked upward, almost as if they didn’t get the memo. In fact, bond yields have been climbing nearly every d

As expected, the Bank of Canada announced that they are cutting their overnight rate by another 0.50% this morning. As the standard movement is 0.25%, anything greater is considered an oversized move.  Just weeks ago, it seemed like a smaller 0.25% cut was on the horizon. However, given higher unemployment data released on Friday, it gave the Bank of Canada the confidence to move forward with the double cut. Until then, it was a coin toss. How the Cut Affects Variable Rate M

The prospect of lower mortgage rates always brings excitement, especially as the Bank of Canada has already reduced its rate by 1.25% this year. With additional cuts projected into 2025, the landscape appears favorable—yet not without complexity. Interestingly, fixed mortgage rates have recently moved in the opposite direction, rising by roughly 0.30% over the past few weeks.  What does this divergence mean for borrowers over the next two years?  Let’s break it down.  Current

Many clients tell us they’re waiting for the next Bank of Canada rate announcement before locking in a fixed mortgage rate. However, it’s important to understand that fixed rates don’t move in tandem with the Bank of Canada’s rate. In fact, they can sometimes move in the opposite direction. For example, while the Bank of Canada announced a 0.50% rate cut on October 23 and is expected to cut rates again on December 11, fixed mortgage rates have been trending upward. So, what’

Since 2018, anyone applying for a mortgage in Canada has been required to pass a mortgage “stress test.” This test ensures borrowers qualify at a higher interest rate than the rate their payment was based on, acting as a safety net if rates increase. While some have criticized the stress test, I’ve always supported it—especially during the era of rock-bottom mortgage rates.   The biggest problem was if rates were to rise, then many would no longer be able to afford their mort

If you locked in your mortgage during the latter half of 2023 or the first half of 2024, there’s an exciting opportunity to potentially save thousands of dollars by switching to a lower rate mid-term. Many of my clients have saved between $5,000 and $10,000 by making the move—and in some cases, even more. Who is Eligible to Take Advantage of the Lower Rate Savings?  Even if lower rates are available, this doesn’t mean that savings are automatic when making the switch. There a

It seems like just about everyone was following the US election last night. As I mentioned in last week’s blog , a Trump victory would likely trigger an increase in bond yields—and that’s precisely what happened. Bond yields spiked immediately following the election results, setting the stage for higher fixed mortgage rates. We have already seen some increases in fixed mortgage rates over the past week. While we were seeing 3-year fixed rates as low as 3.99% in some situation

Since October 2023, fixed mortgage rates have dropped by about 2.00%, creating a buzz among homeowners and buyers. Now, with predictions that the Bank of Canada may lower its rate by up to 1.75% by Q3 of next year… including another potential oversized cut on December 11th, excitement is high.  However, it’s possible if not likely that fixed mortgage rates may not fall much further than they already have.  This doesn’t mean that they won’t come down. Just not quite as much as

The Bank of Canada has cut rates by 0.50%, a move that was widely anticipated. While there were some signals that they might take a more conservative approach, the drop in CPI inflation to 1.6% in September pushed the Bank to make this significant cut. The goal was to bring inflation down to 2%, which they expected to achieve by the latter half of 2025. However, inflation has not only hit the target but exceeded it—nearly a year ahead of schedule. With this rate cut now in ef

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