Urgent - You Could Save Mortgage Interest, But The Window Is Closing Fast

Urgent!

Fixed-Rate Mortgage Holders: Request a penalty quote from your lender TODAY.
Many high-rate mortgages have surprisingly low penalties right now if your mortgage is with a Bank. Don't miss out on potential savings! Even if your prepayment penalty seems high, you may still save money by breaking the mortgage and locking in at today's (much) lower rates. We can put together a comprehensive analysis for you to calculate if you will save money by breaking your mortgage early. It all comes down to the math! Sometimes, it makes financial sense to stick with the higher rate until the end of your mortgage term, but sometimes it doesn't.

When you call your bank, find out what "discount" you were given!

Bank Contact Information:

TD: 1-866-694-4392
Scotia: 1-800-472-6842
BMO: 1-877-225-5266
RBC/HSBC: 1-800-769-2511
CIBC: 1-800-465-2422
National Bank: 1-888-835-6281

New Mortgage Rules Make Homeownership More Affordable for Canadians

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!

233,000+ People Have Watched This Video - Pay Your Mortgage Off In Half The Time With This Strategy

I received a lot of feedback when I posted this video last year and still get feedback to this day. Although it's a strategy the majority of people cannot afford to take advantage of, it's still an interesting strategy to be aware of.

Click HERE to watch the video.

"Many Canadians Under 35 Are Unlikely Ever To Be Able To Buy A Place To Live"...

I found THIS ARTICLE very interesting, especially the statement that many Canadians under 35 are unlikely ever to be able to buy a place to live. What are your thoughts?

April's Strong Job Gains Likely Postpone Rate Cuts Until July

Today's StatsCanada Labour Force Survey for April blindsided economists by coming in much more robust than expected. Employment in Canada rose a whopping 90,400 in April, the most in 15 months, following a decline in March, surpassing forecasts by a large margin. Substantial job gains were posted in both full-time and part-time work.

The central bank meets again on June 5. The April CPI report will be released on May 21. This is by far the most important economic report for the Bank. They will look at the three-month trend in the core inflation measures. These figures have already fallen sharply, but given the strength in the jobs report, the central bank will likely wait another month before they begin cutting the interest rates that impact variable rates.

Bond yields (which impact fixed rates) meanwhile increased slightly by 0.10%, but aren't expected to meaningfully impact the recent downtrend in fixed rates.

Bank of Canada Holds Key Interest Rate At 5%, Says Things Moving In Right Direction

Jenna Benchetrit · CBC News · Posted: Apr 10, 2024 6:49 AM PDT 

The Bank of Canada has held its key interest rate at five per cent for the sixth consecutive time since July, saying it will look for signs that slowing inflation is sustained before moving on rate cuts.

The central bank said that inflation is still too high, but noted that core inflation measures — which strip out volatile sectors like food and energy — have trended downward in recent months.

"I realize that what most Canadians want to know is when we will lower our policy interest rate. What do we need to see to be convinced it's time to cut?" Bank of Canada governor Tiff Macklem said during a news conference following the announcement.

"The short answer is we are seeing what we need to see, but we need to see it for longer to be confident that progress toward price stability will be sustained. The further decline we've seen in core inflation is very recent. We need to be assured this is not just a temporary dip."

Macklem said that a rate cut in June is "within the realm of possibilities."

While inflation cooled to 2.8 per cent in February, with price growth slowing across goods, food, clothing and services, high rent and mortgage interest costs continue to drive up the overall inflation rate.

The bank expects inflation will move closer to its two per cent target this year, and that it will reach it in 2025. The bank also expects solid GDP growth this year and in 2025, due to population growth and increased household spending.

Continue reading...

My Opinion On Why The New Government Mortgage Rule Changes STINK!

Click HERE to hear why I think the new government changes to the mortgage rules really stink.

First-Time Homebuyer (FTHB) Incentive Discontinued

The first-time homebuyer incentive is discontinued, says the federal housing agency. As many of you know, I have been VERY critical of this program since it was introduced by the Federal Government. It was a poorly thought-out program that was incredibly difficult to qualify for and meet the required guidelines. So, I'm not surprised that it is being discontinued. If you have any questions about how this may impact you as a first-time homebuyer, don't hesitate to reach out. 

Check Out This Tiny 300 sq ft Detached Home!

This two-story tiny house design is an exceptional display of how high ceilings and smart design flow can make all the difference in the smallest of spaces. 

There is a bedroom on the first floor and an open living space with a bathroom/laundry room on the ground floor. 

This tiny house has a total floor area of 301 square feet and a small balcony on the first floor.

Click Here To Watch The Video

Can Your Mortgage Interest Be Tax Deductible?

I get asked about this mortgage strategy fairly often, so I posted a quick video on it the other night. Don't hesitate to reach out with any questions. Click HERE to watch this video.

First Home Savings Account (FHSA)

Your FHSA participation room for the year is the maximum amount that you can contribute to your FHSAs or transfer from your registered retirement savings plans (RRSPs)  to your FHSAs in the year without creating an excess FHSA amount . For more information about transfers, go to Transfers between FHSAs and other registered plans.

Your FHSA participation room in the year that you open your first FHSA =$8,000

The lifetime FHSA limit =$40,000

All contributions you make to your FHSAs and all transfers from your RRSPs to your FHSAs will reduce your remaining lifetime FHSA limit. If your contributions and transfers to your FHSAs in the year exceed your FHSA participation room for the year, you will have an excess FHSA amount. For more information about an excess FHSA amount, go to What happens if you contribute or transfer too much to your FHSAs.

Is Your Mortgage Up For Renewal In 2023?

Many homeowners with mortgages coming up for renewal this year will see a considerable increase in their rates and payments due to mortgage rate increases in 2022.

The best strategy is to be proactive. If yours is up for renewal in 2023, please let me know so we can set up a plan that works for you to ease the burden of the rate increases and set you up to take advantage of expected rate decreases in the coming years. There are certainly options and strategies to ease the financial burden. 

The Most Expensive Homes In Every Canadian Province

The good news is that this article was written in July 2022, and prices have come down since then in most markets, so you may be able to pick one of these up for a bargain!

Check out these CRAZY houses HERE

Fixed Mortgage Rates Are Falling

While rates have been steadily climbing for variable mortgages, fixed mortgage rates have been moving in the opposite direction.

Specific lenders and national brokerages have been gradually dropping rates for select terms since the start of the month. As a result, average nationally-available deep-discount 5-year fixed mortgage rates are now about 20 basis points lower than earlier in the month, according to data from MortgageLogic.news.

The move follows the recent decline in the 5-year Government of Canada bond yield, which typically leads fixed mortgage rates.

The 5-year bond yield closed at 3.05% on Monday, bouncing back slightly from a 5-month low of 2.80% reached last week. Still, yields are down from about 3.40% four weeks ago, and the 14-year high of 3.89% reached in October.

Continue Article Here...

Tax-Free First Home Savings Account (FHSA)

The Tax-Free First Home Savings Account (FHSA) is a savings account for home purchases. It's a new registered plan allowing first-time homebuyers to save up to $40,000 tax-free. This new account is expected to be implemented in 2023, but there are still some unanswered questions about the details. 

Here's what we know so far:

- Age limit: You should open your FHSA before reaching 71 years old, or it can be opened for 15 years.

 - Contributions, deductions and taxes: Unlike an RRSP, which allows contributors within the first 60 days of the following year, all your FSHA contributions should be made before December 31st for current-year deductions.

 - Deductions can be carried forward to future years to reduce taxable income.

 - Once the account is opened, unused portions of the annual contribution limit will be allowed to be carried forward up to $8,000. This means that an individual who makes less than $8,000 in contributions in one year could contribute the following year, their annual contribution limit of $8,000 plus $8,000 minus their contributions made in the previous year (subject to their lifetime contribution limit).

More details and examples can be found here.

New Anti-Flipping Rule

Under the proposed new rules, where there has been a disposition of a “flipped property,” any gain realized is taxable as business income and not as a capital gain. 
READ MORE...

Greener Home Improvement Loans & Grants

Recently I have been approached by a few people asking me to help them find $100k loans for home improvements. 

There are a few great options from the government and municipality; you don't need me. 

*Available on primary residence only* 

For Toronto residents: HELP (Home Energy Loan Program)
Up to $125k, interest-free & max of the 15-year term. 

For non-Toronto residents: Canada Greener Homes Loan

Up to $40k, interest-free & max of the 10-year term. 

Click on the links, and you will be directed to their official pages for program details, eligibility check and application. 

You're welcome.  

How to Lock A Door Without A Lock

There are many commonsense reasons why you’d want a little extra security. If you frequently travel, staying in hotel rooms or Airbnb rentals can be risky because doors don’t always lock securely, if they lock at all. Plus, cleaning staff and who knows who else has keys.

Whether you want more secure doors when you’re home or away from home, there are plenty of options. Some temporary locks are made for doors that swing in, and others for doors that swing out. Some must be screwed to the door, door jamb or floor; others are removable.

The photo in this article is for a product you will find on Amazon called "Portable Door Lock," and it is sold for about $10.

This lock works by disabling the doorknob rather than wedging the door shut, so it’s only as secure as the lockset and the wood in the door jamb. To use it, insert the pins on a metal plate into the door strike and close it. Then insert the pin on the locking mechanism into a hole in the plate, and push the mechanism down to prevent the knob from turning. This provides excellent security for in-swing doors that don’t lock and doors with locks that others have keys for.

Now that we are starting to travel more with the lessening impact of COVID, this might be something worth investing in.

Financing The Buyout Of The Marital Home After A “Grey Divorce”

In 2021, there were more than 1.6 million divorced people in Canada between the ages of 55 and 89 years old. This phenomenon, commonly known as “grey divorce,” is defined as those over the age of 55 going through a divorce. For many of these individuals, staying in the home they love is a priority, but they may not have the funds on hand to finance a buyout.

If you lack the means to generate new wealth or face difficulties borrowing due to a lack of employment income, it can be tempting to dip into your retirement savings or investments to cover the cost of a home buyout. However, there is a better solution.

For those looking to finance the buyout of their marital home, a reverse mortgage may be the answer. The reverse mortgage can help you tap into the equity you’ve built in your home to buy out your spouse’s half of the home. With a reverse mortgage, you can access up to 55% of the value of your home and turn it into tax-free cash. What’s more, there are no monthly mortgage payments, which can help free up additional cash, which you can use to pay for renovations, cover medical expenses, or pay down debt. How you choose to use your funds is up to you.

If you have questions, contact me for a confidential conversation today. 

What Is A Trigger Point Or Trigger Rate?

As we move into the Fall market, there are some important things you should be aware of.

While inflation has now likely peaked, we will still be dealing with the repercussions from these heightened levels for a while before things balance out. As inflation is corrected, we are also seeing home prices moving back to normal post-pandemic era. 

However, we are still anticipating some final rate hikes from the Bank of Canada coming into the fall.

With that in mind, now is an important time to discuss what this means for your mortgage – specifically in regards to trigger points. Another increase in rates on the horizon will put many variable-rate borrowers near their mortgage trigger points.

While static payment variable-rate mortgages are not designed to fluctuate with prime, the reality is that a mortgage payment consistent of two components: your principle and your interest. With the existing rates and subsequent increases expected in the fall, the amount paid towards principle has decreased with an increase in the amount of interest on a static mortgage. For instance, if you are paying $2000 a month on your mortgage, only $200 might be going towards the principle with the rest covering interest. An additional increase to the interest rate means that your interest portion will spike again and may actually exceed your total payment. When this occurs, it is called hitting your trigger rate.

You can calculate your own trigger rate with the following formula: (Payment amount X number of payments per year / balance owing) X 100) to get your trigger rate in percentage.

If you have reached your trigger rate, don't panic. You are certainly not alone and there are options:

Adjust Your Payment: Firstly, you may choose to adjust your payment amount to ensure that you still have some going towards your principal balance.
Review Your Amortization Schedule: Consider switching increasing your amortization schedule. However, if you're already at your maximum amortization for your lender and mortgage product, you would need to increase your payment.
Switch to a Fixed-Rate Mortgage: Many borrowers are now choosing to opt for a fixed-rate mortgage to avoid the issue of increased interest and trigger rates. Keep in mind, depending on your mortgage product, you may face penalties if you switch your mortgage mid-term. Be sure to discuss any mortgage changes with me before going ahead.
Pay Off Your Mortgage: The final option that is always there is for you to pay off your mortgage entirely. Though don’t fret if this is not possible!

While I understand words like “inflation” and “trigger rates” can be scary, as your dedicated mortgage professional I am here for you. I would be happy to discuss any concerns you have or help explain in more detail how these changes may impact your mortgage and what your options are.

Home Renovation Tax Credits In Canada For 2022

This is the best article I have found so far on the Home Renovation Tax Credits that you may be able to take advantage of before the end of 2022!

Click here to read it, so you can claim the right credits 

What Do Rising Interest Rates Mean to Me?

Rising Interest Rates

Your purchasing power or borrowing power has come down in recent months, guaranteed. As rates rise, everybody's purchasing/borrowing power is decreased. 

As a mortgage professional, I'm often asked by folks to "run the numbers" so they know what heir options are when it comes to securing a mortgage. The problem we currently face is those "numbers" I ran a few months ago, typically no longer apply! 

There is a lot of misinformation and misunderstanding out there about interest rates. What impacts them, how do they impact you, and what are your options in today's current rate environment?

Check out this article put out by TD. If you're unsure how rising rates affect you, you're not alone and I encourage you to reach out to me for a chat so we can answer any questions you have and help make sense of it all. I can be reached by phone/text at 905-213-1475 anytime, or I'm always available by email at dan@dancaird.com. 

What Interest Rate Would Double Your Mortgage Payment?

Will Your Mortgage Payment Double?

I often hear people say "if interest rates double, people's payments are going to double" and that is not the case. Here's a nice short video I did recently squashing this common myth. 

Click the link above to view the video!

Check out my other videos here

Scared And Want To Lock In Your Variable Rate Mortgage?

If you have a variable rate mortgage and recent economic news has you thinking about locking into a fixed rate, you may want to think again. You can expect to pay a higher interest rate over the remainder of your term, and you could end up paying a significantly higher mortgage penalty, should you need to break your mortgage before the end of your term.

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 likely the primary reason you chose a variable; to secure the lower rate.  Currently, 5 year fixed rates are ranging from approximately 4.94%-5.50%

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 but there are controls in place to ensure that rates don’t take a roller coaster ride. The Bank of Canada has eight pre-scheduled rate announcements per year, where they rarely move more than 0.25% per announcement. The two most recent rate increases of half a percent were the largest increase in over 20 years. 

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 0.75% of the total mortgage balance. Comparatively, breaking a fixed rate mortgage could cost upwards of 4% of the total mortgage balance, if you are required to pay an interest rate differential penalty.

For example, on a $500,000 mortgage balance, the cost to break your variable rate would be roughly $3,750. The cost to break the same mortgage at a fixed rate could be as high as $20,000+, five times more, depending on the lender and how they calculate their interest rate differential penalty.

This flexibility is likely another reason you initially chose a variable rate product.

Breaking your mortgage contract

Nearly 60% of Canadians will break their mortgage at an average of 38 months.  While you may intend to stay with your existing mortgage for the whole term, life happens, and you might need to make a change.

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 you might need to break your mortgage. That being said, it still may be the right decision for you. As we like to say, if your mortgage rate is going to keep you up at night and give you grey hair, by all means, lock it in!  However, if you can stand the fluctuations, we still think the variable product is the way to go. 

If you have any questions or would like to discuss this in greater detail, please feel free to contact me by phone or email. I'm always here to help! 

Interest Rate Hike!

The Bank of Canada raised the benchmark interest rate to 1.5% today, signalling more hikes are on the way. 

If you have a Home Equity Line Of Credit (HELOC), or variable rate mortgage (or any loan tied to the bank's prime rate), this will effect you.

Are you curious how this will impact you? Let's chat - reach out to me today!

Read the full article HERE