Renewal Readiness: Steps You Should Take Every 5 Years

This is one of the most important renewal years in a very long time.

Many of the COVID era, low rate, mortgages are coming due this year. You should plan for the increase in rate and payments and we can help. 

Many borrowers treat mortgage renewal as a routine task. They receive a notice from their lender, sign it, and move on without asking questions. This can lead to paying more interest than necessary. A renewal is actually a great chance to negotiate better terms, since lenders want to keep your business. Starting early gives you time to prepare and puts you in a stronger position to ask for a better deal.

To prepare, begin reviewing your finances six to twelve months before renewal. Check your income, credit score, future plans, and monthly budget to see what you can improve. This is also a good time to rethink your mortgage plan, compare rates from different lenders, and review the fine print of your current loan. Some borrowers will benefit from switching lenders if better options are available. With early planning and careful review, a mortgage renewal can help you save money and set yourself up for the next five years with confidence.

Please contact me for a complimentary and confidential mortgage review  so we can assess your current situation and how you may save when you renew your mortgage.

Start Strong: Why Pre-Approval Gives Buyers the Edge

Getting pre-approved for a mortgage is an important first step when buying a home. It shows how much you can afford, what your interest rate may be, and what your monthly payments could be, helping you stay within your budget.

Pre-approval also makes you a stronger buyer because sellers know you are serious and ready to buy. It can help your offer stand out in a competitive market. Most importantly, it lets you fix any credit or income issues early, making the home-buying process smoother and less stressful.

If you would like to learn more, I invite you to contact me for a complimentary and confidential mortgage review, where we can assess your current situation and explore your options with clarity and confidence.

If You Passed Away Tomorrow?

If you passed away tomorrow, would your family know where to find anything?
If the answer is no, this article is for you.  I’m talking about something most people avoid, but every family needs.

It’s called an “In Case of Death” folder on your computer. And this will be one of the most valuable things you ever leave behind for your loved ones. When someone passes away, families are left scrambling for documents, passwords, accounts, and instructions. A simple folder can prevent months of stress, confusion, and even financial loss.

So here’s exactly what should be inside. The first sub-folder should contain your personal identity documents. These are often the hardest things for families to find. Include your birth certificate, your marriage certificate, your driver’s license, and any provincial ID. Anything that confirms who you are and who should handle your affairs.

The second folder should contain your legal and estate documents. This includes your last registered will, your power of attorney, your health care directives, and your succession certificates. If you have minors, this is also where you keep all legal guardianship documents. These documents decide everything if something happens, so keep them easy to find.

The third folder should contain all your financial assets. Add your bank account details, investment information, and safety deposit box location and key details. Include all loan documents and all insurance policies as well. Your executor can’t manage what they can’t find.

The fourth folder should contain everything related to real estate you own, and any business documents if you own a company. Add your property agreements, mortgage agreements, rental agreements, and business succession plans. This makes transferring or managing your assets far simpler. The fifth folder should contain your digital assets. This includes your domain names, email addresses, user IDs, and passwords. Ideally, use a password manager that automatically sends access to your emergency contact if you’re inactive for 30 to 60 days.

Finally, make sure a trusted family member or lawyer knows this folder exists and can access it. Setting this up takes less than an hour, but it can save your family from months of hardship. 

Bank of Canada holds rate at 2.75%

June 4, 2025

The Bank of Canada decided to keep its key interest rate, called the overnight rate, at 2.75%. This rate influences the cost of things like loans, mortgages, and savings across Canada.

What’s going on globally?
The U.S. keeps changing tariffs (taxes on imported goods), creating a lot of uncertainty. The U.S. and China have lowered some extreme tariffs and started trade talks with other countries, but the results are unclear, and tariffs are still higher than earlier this year. More trade changes might be coming. The global economy has held up, but some growth came from businesses rushing to avoid tariffs. In the U.S., people are spending, but imports hurt economic growth, and inflation is above 2%, with tariffs likely to push prices up more. Europe is growing due to exports and plans to spend more on defense. China’s economy is slowing as past government support fades, and U.S. tariffs are hitting Chinese exports. Financial markets have stabilized since April’s chaos, but they’re still jumpy about U.S. policy. Oil prices are about the same as earlier this year.

What’s happening in Canada?
Canada’s economy grew by 2.2% in early 2025, a bit better than the Bank expected. Businesses exported more to the U.S. and stocked up on goods to beat tariffs, which helped. But spending by people and the government slowed, and fewer homes were sold. Businesses spent more on equipment, which was a plus. However, jobs are tougher to find, especially in industries tied to trade, and unemployment is now 6.9%. The economy is likely to slow down soon as exports and stockpiles drop, and everyday spending stays weak.

Inflation (how fast prices rise) dropped to 1.7% in April, mostly because the federal carbon tax was scrapped, which lowered prices. Without that, inflation was 2.3%, a bit higher than the Bank thought. People and businesses expect tariffs to make things more expensive, and many companies plan to pass those costs to customers. The Bank is keeping a close watch on prices.

Why keep the rate at 2.75%?
With U.S. tariffs causing uncertainty, the economy slowing but not collapsing, and prices rising a bit more than expected, the Bank chose to hold the rate steady. They want to learn more about how tariffs will affect Canada before making changes. The Bank is balancing a weaker economy (which could lower prices) against higher costs from tariffs (which could raise prices).

The Bank is being careful, watching risks like:

How tariffs might cut demand for Canadian goods.

How this could hurt jobs, business spending, and what people buy.

How fast tariff costs make everyday items pricier.

How people’s views on future prices change.

The Bank’s main job is to keep prices stable and support the economy through this global trade mess. They’ll keep checking data to decide what to do next.

THE 2025 BANK OF CANADA INTEREST RATE MEETING SCHEDULE

WHEN IS THE NEXT BOC MEETING?
 

The Bank of Canada meets eight times per year and makes announcements about rates. Now more than ever, these dates matter very much to our industry and and to anyone with a variable rate. Here are the dates listed below for the remainder of 2025.

As always, should you have any questions, please feel free to reach out to discuss. I am happy to help. 

2025:

Wednesday, July 30, 2025

Wednesday, September 17, 2025

Wednesday, October 29, 2025

Wednesday, December 10, 2025

New Mortgage Rules

There are a few BIG changes that have come to the mortgage market and, for a change, they are actually good news!

No More Stress Test For Transferring A Mortgage To A New Lender

Effective December 15, 2024, current mortgage holders no longer need to qualify using the Stress Test if they wish to transfer their mortgage to a new lender.  Borrowers will still need to income qualify to move their mortgage, and maintain their current balance and amortization.  Qualifying will be based on the contract rate rather than the Stress Test.

Increasing the purchase price cap for insured mortgages to $1.5 million

Effective December 15, 2024, applicants requiring an insured mortgage can now purchase a home up to $1.5 million, which is up from $1 million.  This applies to those purchasing a home with less than 20% down payment.   The down payment requirement is 5% of the first $500,000 of the purchase price and 10% of the remainder of the price up to $1.5 million.

30 Year Amortizations for First Time Home Buyers and New Construction Properties

First time home buyers who have less than 20% down payment and therefore require an insured mortgage, will now be eligible to get an amortization up to 30 years.  Also, all buyers of new construction properties who require an insured mortgage can also request a 30 year amortization.  

New Federal Program for Home Owners Adding a Rental Suite

Starting in January 2025, home owners wishing to use their home equity to create up to three suites in their home will be permitted to refinance their mortgage up to 90% of their property's improved value up to $2 million.  The home owner must already live in the home and be creating a separate suite(s). This program is for the creation of self-contained suites, such as basement suites or laneway homes.  Short term rentals are not permitted.  Insured mortgages with 30 year amortizations will be permitted under this program.

Bank of Canada reduces policy rate by 25 basis points to 3%, announces end of quantitative tightening.

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%.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.

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.

Retirement Funding

Three-Legged Stools?

Think of retirement funding as a three-legged stool. In the past, those three legs have been personal savings, government benefits (CPP and OAS) and employer pensions.

But more and more Canadians are retiring without a government pension, making it a very wobbly stool. The good news is that your home equity can replace that third leg. A CHIP Reverse Mortgage can provide a monthly income source where you keep title to your home and, done responsibly, you still maintain strong equity in your home.

Conservatively, if home prices increase at 4% per year, a 65 year old couple in a $1,500,000 home drawing $2,000/month will still have more equity when they are 85 than they do now.

We run, no obligation, personalized financial scenarios for all our clients. You may be pleasantly surprised to see yours!

Reach out anytime. Always here to answer your questions about this and any other real estate financing scenarios you may wish to consider.

What is a Second Mortgage?

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!

Will Collections Impact Your Mortgage?

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?” And as the answer might have a broader application than what you might initially think, it’s worth spending a little time discussing.

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 you new credit 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 directly deal with the issue. 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. Read More

Bridge Financing and Deposit Lending

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.

Bank of Canada Rate Announcement Jan 24th, 2024

The Bank of Canada 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.

Mortgage Financing Through A Separation Or Divorce

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.

Take a look at Alternative Lending

Alternative lending or "B" lending refers to lending practices that fall outside 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 we know this isn’t always the case. Securing the most favorable terms depends on your financial situation. Here are a few circumstances where alternative lending might make sense for you.

Damaged Credit

Self-Employment with low declared income

Non-traditional income like Airbnb, tips, commissions, Uber, Homeshare

Expanded Debt-Service Ratios - owing other large debts beyond the limits that "A" lenders would allow

Interest rates for Alternative lenders are typically about 1% higher than the lowest "A" rates, and they like to charge a 1% fee in addition.

I've had several instances whereby a client would only qualify for a condo/townhouse with "A" lenders, but with "B" lenders they can buy a detached house with a rental suite. With the rental income now in the equation, the house financed by the "B" mortgage becomes cheaper to pay for on a monthly basis than the town home with "A" financing. So getting a mortgage is not always about "getting the best rate". It's important to actually crunch the numbers.

BC Says No to AirBNB

B.C. has put in place new legislation to help municipalities regulate short-term rentals on sites like Airbnb, which provincial and municipal leaders say is affecting the availability and price of long-term housing.

The new rules passed their first reading on the BC Legislature Monday and include increasing fines for hosts breaking local municipal bylaw rules to $3,000 per infraction, per day, from $1,000.

All short-term rental platforms will also be required to share data with municipalities to improve local enforcement, although no private information about hosts will be released publicly.

In addition, all short-term rental platforms will have to include the business licenses and registration numbers of listings where they are required by a local government and must remove listings without those requirements quickly.

The province says the new rules, which will come into effect in stages from now through late 2024, are meant to create a minimum regulatory standard for housing available for rent for fewer than 90 days.

Read the entire article here: Click Here

Shocked By Your Mortgage Renewal Offer?

If your mortgage is up for renewal in the next six months, you are probably coming off a nice low interest rate that you have enjoyed for the last few years.

Chances are that you are aware that rates have been climbing steadily over the last 24 months and your renewal rate will be substantially higher than the rate you last negotiated.

Some lenders are forecasting that rates may continue to increase and are calling up borrowers asking them to renew early. That may seem like they have your best interest at heart but to do this you have to give up your current low rate for the balance of your term.

Don't be fooled by this tactic of renewing early into a less than stellar, higher-than-you-pay-now rate.

What we recommend is to lock in a rate today that is good for four months by committing to moving your mortgage to a new lender, stay with your current lender with the current low rate until your mortgage renewal date, then make the move. We will get the new lender to offer the guarantee that in the next four months, if rates come down, you can request the new lower rate.

5 Year Bond Rate Hits 2008 Highs

Over the last 4 months, bond rates have increased by 1%. This means that we no longer have 5% rates; instead, we now have 6% rates.

The rates are currently at the highest point they've been since January 2008.

As for when rates will decrease, I have no idea. Even those who are considered knowledgeable in this area have been wrong. The Bank of Canada's predictions have been totally off. One Economist says rates will stay where they are, one says they will move down, one says we are in for more hikes. We are really in a "no one knows" situation and we all just have to wait and see. This wait and see is a difficult position to be in when funds are tight and the budget is being stretched. 

If you are feeling the squeeze, what should you do? Make sure you have access to liquidity. This may mean, restructuring your mortgage to pay out some high interest debts, selling recreational vehicles or toys, and living a bit tighter while we all ride this out.  

Newsletter Challenge

This newsletter's question: What year did the Berlin Wall fall?
(Try not to google the answer;)

As always, the first person to text or email me the correct answer wins a $20 Guusto Gift Card to use wherever you want!

What Is A Spousal Buyout?

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.

Is Your Mortgage Coming Up for Renewal?

If your mortgage is coming up for renewal in the next 6-months, there are a few options to consider. 

Here are some options to consider:

1. Renew at the existing lender

2. Switch to a new lender that is offering a lower rate

3. Increase your mortgage to pull out equity too:   

3a. Consolidate debts

3b. Renovations

3c. Purchase a rental property   

3d. Purchase a new primary residence.

4. Decrease your mortgage if cash on hand

5. Set up a home equity line of credit

6. Set up a re-advanceable mortgage

We can get you approved today with rate hold to ensure you are taken care of! 

First Home Savings Account (FHSA)

A first home savings account (FHSA) is a registered plan allowing you, as a prospective first-time home buyer, to save for your first home tax-free (up to certain limits). You are able to open an FHSA as of April 1, 2023 however financial institutions are slowly rolling it out.

To qualify to open a FHSA you must be at least 18 years old, be a resident of Canada and be a first-time home buyer.

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.

Changes to the Foreign Buyer Ban

The government of Canada has made a few changes to the foreign buyer ban. 

The four key amendments announced Monday by the Minister of Housing and Diversity and Inclusion include:

Work Permit Holders
Non-Canadian work permit holders were initially included in the ban, but critics argued that was contradictory to the government’s immigration goals. As a result, work permit holders are now exempt from the ban as long as they have 183 days or more of validity remaining on their work permit.

Vacant land exemption
The restriction preventing non-Canadians from purchasing vacant land zoned for residential or mixed has been lifted.

Exception for development purchases
Non-Canadians will also now be able to purchase residential property for the purpose of development. This exception was only applicable to publicly traded corporations in the original legislation.

Increase to the foreign control threshold
The ban initially prevented privately held corporations or entities from purchasing residential property if a non-Canadian owned 3% or more. That threshold has now been increased to 10% following concerns from developers that the 3% threshold was too restrictive and would hinder the development of new housing.

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