Improve Your Retirement!

Hey, I Don't Want to Move - Better Options for Aging in Place

Wed, 15 Oct 2025 00:03:47 GMT

Life's a Bit More Expensive Than Retirees Expected!

For Canadians with significant home equity, reverse mortgages offer something traditional financing cannot: access to capital with payment flexibility and no monthly obligations.

Many homeowners in the Lower Mainland find themselves house-rich and cashflow constrained. Often their wealth is tied up in investments, real estate or business equity. Those with a mortgage payment may experience a cashflow squeeze that limits lifestyle choices and investment opportunities.

With a reverse mortgage, those monthly payments disappear!

Nothing feels worse than selling because of a cash crunch. Stay as long as you like, on your terms. Sell when you want.

Your mortgage balance does grow as interest accumulates, but in Vancouver your home often appreciates at a faster rate. Meanwhile you’ve freed up your cashflow for investments, travel, family support, help your kids buy their first home, or simply peace of mind.

You are free of monthly payment stress and gain flexibility in how you manage your other assets. Pay down the interest when you want, and keep your options open.

If you are over 55 and want to explore this alternative, I would be glad to highlight the pros and cons, to make sure it's the right move - the one that allows you to stay put and love your home and lifestyle.

New 30-Year Amortization for First-Time Buyers: What You Need to Know

Tue, 08 Jul 2025 21:50:47 GMT

Who Qualifies for the New 30-Year Option?

As a mortgage broker based in Langley, BC and serving all of British Columbia, I often work with first-time home buyers who are navigating mortgage options for the first time. One of the biggest challenges today is affordability. That’s why a recent rule change regarding 30-year amortizations is worth paying close attention to.

In this article, I’ll walk you through what’s changed, who qualifies, how it compares to a conventional mortgage, and what it could mean for your monthly budget. Whether you’re just starting to look at homes or getting ready to apply for a mortgage, this guide will help you understand your options clearly.

What Is an Amortization Period?

The amortization period is the total length of time it will take to pay off your entire mortgage. In Canada, the most common amortization periods are 25 or 30 years. A longer amortization means smaller monthly payments—but more interest paid over the life of the loan. Shorter amortizations result in higher payments, but less total interest.

It’s important to note that the amortization is different from your mortgage term. The term is the length of time you commit to a lender, interest rate, and conditions (usually 1 to 5 years).

What Changed in 2025 for First-Time Buyers?

In 2025, the federal government introduced a new rule allowing qualifying first-time home buyers to access a 30-year amortization on insured mortgages. Prior to this, insured mortgages were capped at 25 years.

This rule was implemented to improve affordability by reducing monthly payments for those trying to enter the housing market.

According to the Department of Finance Canada, the goal is to provide more flexibility to first-time buyers without significantly increasing overall risk to the financial system.

Who Qualifies as a First-Time Home Buyer?

To be considered a first-time home buyer under this new rule, at least one borrower on the mortgage must meet one of the following:

-Never purchased a home before

-Has not occupied a home (owned by self or spouse/common-law partner) in the last 4 years

-Recently experienced a breakdown of a marriage or common-law relationship, and has lived apart for at least 90 days

-The property must also be owner-occupied or intended for immediate family (like a child or parent), and the down payment must be less than 20% to qualify as an insured mortgage.

For more details on insured mortgage qualification criteria, visit the CMHC Mortgage Loan Insurance page.

How Insured Mortgages Work

When you put down less than 20% on a home purchase in Canada, your mortgage must be insured through a provider like CMHC, Sagen, or Canada Guaranty. This insurance protects the lender—not you—in case you default.

The insurance premium is added to your mortgage and varies based on your down payment. For a 10% down payment, the base premium is 3.10% of the loan amount. With the 30-year amortization option, there's a 0.20% surcharge, bringing the total premium to 3.30%.

Insured vs Uninsured Mortgages: What’s the Difference?

An insured mortgage is one with less than 20% down and requires default insurance. An uninsured mortgage (also called conventional) is when you put 20% or more down.

Here’s the surprising part: insured mortgages often receive lower interest rates. That’s because the lender is protected from losses, which reduces their risk.

With an uninsured mortgage, there’s no protection for the lender. So even though you're putting more money down, lenders may offer slightly higher rates to compensate.

Real-World Comparison: 10% Down vs 20% Down

Let’s look at a $700,000 purchase price, with one buyer putting 10% down (insured mortgage) and the other putting 20% down (uninsured). Both take a 30-year amortization.

You can see the full breakdown in the chart at the top. The first question is, do you have the resources to put 20% down. Pay particular attention to the CMHC one time premium cost to access an insured mortgage option. It's a cost you have to consider when comparing the interest rates difference between the two products.

Can I make prepayments?

Yes, depending on the lender, you can usually make lump-sum payments or increase monthly payments without penalty.

Do all lenders offer this option?

Most major banks and mortgage lenders offer it, but policies may vary. A broker can compare the best options for you.

How a Mortgage Broker Can Help

As a licensed mortgage broker in Langley, BC (and working with clients all over the province), I help first-time buyers:

-Confirm whether they qualify for this new 30-year option

-Compare rates between insured and uninsured lenders

-Understand the total cost of borrowing

-Navigate lender rules and paperwork

I simplify the process so you can focus on what matters: finding the right home.

Final Thoughts: Is the 30-Year Option Right for You?

This new rule is a welcome change for many British Columbians trying to buy their first home. It won’t be right for everyone, but it offers a new path for those with good credit, stable income, and a smaller down payment.

If you're wondering whether this applies to you, I’d be happy to walk through the numbers and show you what it would look like in your situation.

There’s no cost to talk—just professional, honest advice to help you make a confident decision.

Want to learn more about first-time buyer programs in BC? Check out the BC Government’s Homebuyer Resources.

Senior Options Your Parents Never Told You About!

Wed, 02 Jul 2025 00:57:54 GMT

More Options, More Freedom, More Good Life!

The reverse mortgage market today

Canadians aged 55+ are living longer and want to stay in the homes they love, but they need the financial peace of mind to do it—which is why the reverse mortgage continues to gain popularity.

If you’re looking to improve cash flow, pay off an existing mortgage, clear balances on existing credit cards and loans, make home improvements, or gift a down payment to a loved one, or even upsize to a new dream home, a reverse mortgage might be the right solution for you. We can help!

What is a reverse mortgage?

A reverse mortgage is a simple way to turn a portion of your hard-earned home equity into tax-free cash—with no ongoing payments required.

• Borrow up to 59% of your home’s value

• No monthly mortgage payments required

• Receive your tax-free funds as a lump sum or over time

• Retain ownership of the home you love or buy the home you would rather have!

A reverse mortgage turns your home equity into cash that can be used any way you like.

Call today and let's have a coffee to discuss your dreams or to find out how to change your life for the retirement you desire. Don't settle, take action.

A cushion against the rising cost of living

Fri, 27 Jun 2025 21:53:25 GMT

Reverse Mortgages, a flexible tool for Seniors.

A reverse mortgage can be a flexible tool for a senior to offset the rising cost of living, to borrow more than a bank may be willing to lend for a traditional mortgage, and to provide emergency funds for long term care, if you want to age in place.

Here is an Example of how Reverse Mortgages can improve your life: (real life example!)

Julie is a 75 year old living in North York, Toronto. She's lived in her home for over 40 years, and she and her late huband raised thier family there. Given the location, she figures her older home is worth about $2 million. There's also been speculation that there may someday be approval for condo development, which could cause the land value to skyrocket.

Julie receive the maximum CPP pension of about $1300.00 per month and gets nearly the maximum OAS pension - another $700.00 or so each month. That equates to about $2000.00 of monthly pension income from the federal government. She also has a small pension from the UK that fluctuates year to year based on teh exchange rate.

Beyond that, she's been drawing down a savings account from a modest inheritance from her parents and a small life insurance policy paid out when her husbands passed away a few years ago.

Things are getting expensive and Julie's options have come down to the following to help cushion the impact of inflation:
1. Use credit cards (very high interest charges).
2. Obtain a HELOC, but that is based on income, plus take a bit out of her monthly income for the interest payments.
3. Sell her home and move into an apartment or retirement home. Julie struggles with this one, she loves her home and doesn't want to leave.

Solution:
Julie decides that a reverse mortgage is a good fit.

The Road Ahead.... Has not changed

Fri, 20 Jun 2025 01:39:07 GMT

The debate has concluded, now what are you going to do?

We survived another election. Things got heated and disagreements were openly displayed on social media. Now the aftermath: what are you going to do now?

After reading some disturbing posts from people I knew, I decided to include the varying consumer posts into the data feed I am using on a new project I am working on using Ai Chatgpt to speed up my research.

I entered several full posts of average middle class Canadian (no elites or experts - just good hard-working Canadians who have homes, jobs and families to take care of). Then I asked if all the opinions

Here is what it answered, surprisingly:

�� Do these opinions change the facts?

No — it doesn’t change the facts in the report or the financial prompt we’ve engineered.

However, it does help us better understand the narrative environment that many Canadians are operating in:

People are voting not just on policy substance, but also on personality, image, tone, and media framing.

Carney is being perceived by some as a globally credible technocrat — someone who can "stabilize" Canada on the world stage.

Poilievre is being painted by others as unpolished, possibly ideological, or untested in diplomacy.

These are valid emotional frames — but they do not erase the deeper financial realities middle-class Canadians are facing:

Rising taxes, debt, housing unaffordability, net-zero cost burdens, and wealth erosion through inflation and control mechanisms (like CBDCs).

Now from a publication that I highly recommend for Average Middle Class Canadians who are too busy to pay attention to the noise. Consider the following snippets from recent posts:

Food for thought

"No nation on Earth has more resource wealth per person than Canada. We have the potential to be an energy and economic juggernaut, able to punch well above our weight class in virtually anything from energy to manufacturing to technology to military defense."
~ Alberta Premier, Danielle Smith
P.S. Think of how much effort has gone into preventing Canada from realizing our potential.
~ MC

"The problem with socialism is that you eventually run out of other people's money."
~ Margaret Thatcher

Free this, free that, programs that are not means tested, the free lunch is alive and well in Ottawa.
Thomas Sowell: "The welfare state is the oldest con game in the world. First you take people’s money away quietly and then you give some of it back to them flamboyantly."
~ MC

Canada's economy is crumbling

Canada’s economy is a house of cards built on decades of mismanagement, ballooning debt, and empty promises. As living standards plummet and productivity collapses, the elites deflect blame — the elbows up slogan — while bringing in U.S.-based cheerleaders to sell their failures. The irony? Those in power now claim to have ‘found religion’— but their gospel is the same old hypocrisy.
~ James E Thorne, chief investment strategist, Wellington Altus

MC - is Michael Campbell - every Saturday you can tun in for one hour and set the financial perspective to help navigate what is coming....

If you still have a mortgage, especially if it is renewing in the next year, if you are in a high rate fixed term, if you plan to retire in the next two to 5 years, or if you are a senior struggling now in this current climate - getting an independent, broader view perspective of the realities ahead that you may be facing - it's time for a complementary custom review of your mortgage options.

Keep the Keys: 5 Ways to Stay Financially Free in a World That Wants to Own Everything

Thu, 12 Jun 2025 23:15:21 GMT

How can I keep control of my financial future?

In today’s economy, many Canadians are asking:

Where is my money going?
Why do things feel harder even when I’ve done everything right?
How can I keep control of my financial future?

We’re not imagining it.

With rising costs, global changes, and new technology reshaping how we live, it’s easy to feel like we’re losing ownership—not just of our homes, but of our income, privacy, and choices.

What’s Happening?

Inspired by Carol Roth’s You Will Own Nothing, I’ve been exploring how everyday Canadians can hold onto what matters most .

Here’s what I’ve found—and how you can take small, smart steps to protect your wealth and independence.

1. Don’t Just Work for Money—Own It.

Having just one job or income source can be risky today. Explore small ways to diversify :

Side businesses.
Rental income.
Dividend-paying investments.

2. Real Assets Matter More Than Ever.

Inflation makes your dollars worth less.

Consider assets that hold value : real estate, gold, or commodities.

3. Use Home Equity on Your Terms.

For many, their home is their largest investment.

Reverse mortgages can help seniors tap into equity—without selling or giving up control.

But it’s important to get clear advice before deciding.

4. Your Data is Wealth.

Protect your information:

Limit what you share online.

Use privacy tools.

Be aware of who’s profiting from your data.

5. Keep Wealth in Your Community.

Support local businesses, credit unions, and community projects that keep wealth close to home.

Final Thought:

You don’t need to give up control.

With the right strategies, you can own more than just your home —you can own your choices, your future, and your peace of mind.

�� If you’re wondering how to make the most of your mortgage, or thinking about how to use your home equity wisely , I’m here to help.

Let’s talk about what’s right for you.

Contact Winona Reinsma

Mortgage Professional & Certified Reverse Mortgage Expert

�� 778.246.2547

�� win@winonareinsma.com

�� www.winonareinsma.com

It's Time to Review Your Mortgage!

Wed, 30 Apr 2025 23:58:25 GMT

Are you looking forward to Retirement?

Protecting Your Home and Financial Stability as You Approach Retirement

For Canadians aged 55 and older, homeownership has long represented security, independence, and pride. But in today's rapidly evolving financial landscape—with rising interest rates, stricter lending rules, and mandatory home retrofits aimed at net-zero emissions—simply locking in a mortgage rate is no longer sufficient to safeguard your future.

As retirement approaches, or perhaps even unexpectedly arrives, planning your mortgage strategy now becomes crucial. Here are some important considerations:

Refinance While You're Still Working : Securing better mortgage terms while still employed can significantly enhance financial flexibility later, especially if employment circumstances change unexpectedly.

Flexible Mortgage Options : Consider switching to lenders who offer generous early repayment privileges or extended amortization periods. This flexibility could become essential if you encounter shifts in your financial situation.

Prepare for Income Changes : Job loss or income disruption can happen, particularly in later stages of a career. Proactively restructuring your mortgage now can protect your home equity and provide peace of mind.

Explore Retirement-Specific Products : Reverse mortgages, equity takeouts, or strategic lump-sum repayments might significantly ease your financial burdens down the road, reducing stress during retirement.

Secure Credit Access Early: Reviewing and securing your credit options before retirement is crucial. Age and reduced income can later restrict borrowing capabilities when you might need them most.

Navigate Retrofit Financing Wisely : Programs like Property Assessed Clean Energy (PACE) loans can finance home improvements mandated by new regulations, but understanding their implications on property tax bills and resale value is critical.

Retirement isn't just about adjusting your lifestyle—it's about proactively managing financial risks and ensuring you can remain in your home on your own terms. Sitting down now with a qualified mortgage strategist can help you craft a tailored, 5–10-year financial plan that protects your home equity, navigates credit qualification risks, and avoids potential forced sales in unfavorable market conditions.

This isn't simply about managing interest rates ; it's about maintaining dignity, independence, and housing stability as you move forward. As a mortgage broker with extensive experience, my role is to help you identify and address blind spots in your lending arrangements, anticipate regulatory impacts, and develop personalized solutions to secure your long-term housing future.

Let's work together today to ensure your retirement years remain exactly as they should—secure, dignified, and worry-free.

Power Your Own Boat: 5 Smart Financial Moves for Uncertain Times

Fri, 25 Apr 2025 01:31:42 GMT

Strengthening Your Sails for Uncertainty

If you’ve been feeling uneasy about what’s going on in the markets, interest rates, or the economy in general—you’re not alone. There’s a lot of noise right now, and more chaos is likely in the weeks ahead.

But here’s the truth: we can’t control the storm—but we can control how we sail through it.

In my 20+ years as a mortgage broker, I’ve seen markets rise, fall, and twist in unexpected ways.

What I’ve learned is this: those who focus on what they can control come through stronger. That’s why I wanted to share some insight from The Next Age of Uncertainty by Stephen Poloz—a book that couldn’t be more timely.

Think of your finances like a sailboat. You control the sails, not the wind. Here's how you can adjust your sails to stay steady through uncertain times:

1. Lock in Stability Where You Can.

If you’re thinking about mortgage rates, now’s the time to consider whether locking into a fixed rate might give you peace of mind. Variable rates can be tempting—but with volatility ahead, certainty can help you sleep better.

2. Keep Your Load Light.

Avoid taking on extra debt if you can. The heavier the load, the harder it is to steer when rates shift. Now’s the time to travel light

3. Big Purchases? Pause and Plan.

Before you commit to that renovation or big buy, ask: can this wait? Or is there a smarter way to finance it? Let’s talk about the best options for your situation.

4. Have Cash in Your Lifeboat.

A healthy buffer isn’t just for emergencies—it’s for opportunity, too. Keep enough cash on hand to ride out any waves.

5. Focus on Your Own Course.

There’s a lot you can’t control—but you can take charge of your personal financial path. Everyone’s journey is different, and your decisions should reflect your goals, not just the headlines.

The Bottom Line:

We’re heading into a period where being aware, flexible, and prepared will make all the difference. I’m here to help you power your own boat , with solid advice and real solutions.

If you’re wondering about your mortgage options, upcoming renewals, or how to make the smartest moves right now— let’s have a conversation . A quick check-in can save you a lot of stress later.

Senior's Have Options!

Mon, 22 Jul 2024 18:46:56 GMT

Why Choose a Reverse Mortgage Over a HELOC?

As the cost of living has increased, it may be challenging to meet your retirement income needs and access the cashflow you need to live a desired lifestyle. One advantage that many retired Canadians possess is home ownership. Tapping into some of the equity you have built in your home can help you obtain the additional funds you require.

Tap into your home equity

If you wish to stay in your current home, there are two popular methods to tap into your home equity: a Home Equity Line of Credit (HELOC) and a reverse mortgage.

HELOC lenders typically allow homeowners to access up to 65% of their home's value. With a HELOC, you can borrow money as needed, based on an agreed-upon amount, and you'll be required to make minimum monthly interest payments. Unlike a conventional mortgage, there are no fixed scheduled payments towards the loan's principal, offering you the flexibility to repay the loan at your convenience.

A reverse mortgage is another common way homeowners tap into their home equity. Specifically, the Reverse Mortgage by is designed for Canadian homeowners aged 55 and above. It allows you to access up to 55% of your home's value and receive the funds as tax-free cash, all without the need to move or sell your property. While you continue to live in your home, there are no required monthly mortgage payments to worry about. The full loan amount only becomes due when you decide to move, sell the house, or through the estate after the homeowner's passing.

Advantages of a Reverse Mortgage

The Reverse Mortgage offers several benefits, one of the most notable being the absence of monthly mortgage payments. This feature is particularly valuable to Canadians 55+ when cashflow can be a concern. Here are some of the other benefits of the Reverse Mortgage:

Simplified underwriting. The Reverse Mortgage caters to Canadians aged 55+ who rely on a fixed income and might face challenges qualifying for a HELOC.

No need to requalify: Unlike a HELOC that requires continuous credit score checks, the Reverse Mortgage eliminates the need for requalification, ensuring access to funds without credit score barriers.

Death of a spouse does not impact a reverse mortgage. With a HELOC, the passing of a spouse may prompt the bank to conduct a credit score review of the surviving spouse. With the Reverse Mortgage, the loan doesn’t become due until after both homeowners no longer live in the home.

Fixed-term rate options: The Reverse Mortgage provides fixed rate choices, allowing borrowers to lock in rates for up to five years. On the contrary, a HELOC's interest rate floats and fluctuates with the Bank of Canada's prime rate, leading to increased borrowing costs in times of rising interest rates.

Contact me to learn more about how you can use the Reverse Mortgage to tap into your home equity.

Myths about Reverse Mortgages

Thu, 04 Apr 2024 22:49:11 GMT

Reverse Mortgage Myths

You don't have to abandon your home!

Let's debunk some of the most common myths surrounding Reverse Mortgages.

Myth #1 - "Loss of Homeownership":

You retain ownership as long as you live there and meet the loan requirements. Live in your home for as long as you want.

Myth #2 - "High Monthly Payments":

Contrary to popular belief, you don't make monthly payments with a reverse mortgage. No payment requirements, ever!

Myth #3 - "Debt to Heirs":

The loan is a non-recourse loan, meaning that the borrower will never owe more than the home is worth. In our market it has very rarely happened that the mortgage debt exceeds the sale proceeds of the subject property. However, you can reassure your kids that they will never have to pay for you to enjoy your life!

Call for a free consultation to see if a Reverse Mortgage can you help you live life on your terms!

Winona, Certified Reverse Mortgage Expert, 778.246.2547

Improve Your Retirement

Thu, 01 Feb 2024 01:04:35 GMT

Don't Sell Before You Get The Facts!

Many clients report that getting a reverse mortgage reduced their money stress, and they were relieved that they could keep their family home!

Call for a complimentary consultation to see if a Reverse Mortgage is the right choice for you. Text or call me at 778.246.2547 book a convenient time to get your questions answered right away!

Again - Bank of Canada increases rate to 5%

Thu, 13 Jul 2023 00:23:21 GMT

Another increase! - here is the easy to read summary...

Today, the Bank of Canada increased its overnight interest rate to 5.00% (+0.25% from June) because of the “accumulation of evidence” that excess demand and elevated core inflation are both proving more persistent and after taking into account its “revised outlook for economic activity and inflation.”

This decision was not unexpected by analysts but is disconcerting – as is the Bank’s pledge to continue its policy of quantitative tightening.

To understand today’s decision and the Bank’s current thinking on inflation, interest rates and the economy, we highlight its latest observations below:

Inflation facts and outlook

In Canada, Consumer Price Index (CPI) inflation eased to 3.4% in May, a “substantial and welcome drop from its peak of 8.1% last summer”
While CPI inflation has come down largely as expected so far this year, the downward momentum has come more from lower energy prices, and less from an easing of “underlying inflation”
With the large price increases of last year removed from the annual data, there will be less near-term “downward momentum” in CPI inflation
Moreover, with three-month rates of core inflation running around 3.5% to 4% since last September, “underlying price pressures appear to be more persistent than anticipated”, an outcome that is reinforced by the Bank’s business surveys, which found businesses are “still increasing their prices more frequently than normal”
Global inflation is easing, with lower energy prices and a decline in goods price inflation; however, robust demand and tight labour markets are causing persistent inflationary pressures in services

Canadian housing and economic performance

Canada’s economy has been stronger than expected, with more momentum in demand
Consumption growth was “surprisingly strong” at 5.8% in the first quarter
While the Bank expects consumer spending to slow in response to the cumulative increase in interest rates, recent retail trade and other data suggest more persistent excess demand in the economy
The housing market has seen some pickup
New construction and real estate listings are lagging demand, which is adding pressure to prices
In the labour market, there are signs of more availability of workers, but conditions remain tight, and wage growth has been around 4-5%
Strong population growth from immigration is adding both demand and supply to the economy: newcomers are helping to ease the shortage of workers while also boosting consumer spending and adding to demand for housing

Global economic performance and outlook

Economic growth has been stronger than expected, especially in the United States, where consumer and business spending has been “surprisingly” resilient
After a surge in early 2023, China’s economic growth is softening, with slowing exports and ongoing weakness in its property sector
Growth in the euro area is effectively stalled: while the service sector continues to grow, manufacturing is contracting
Global financial conditions have tightened, with bond yields up in North America and Europe as major central banks signal further interest rate increases may be needed to combat inflation
The Bank’s July Monetary Policy Report projects the global economy will grow by “around 2.8% this year and 2.4% in 2024, followed by 2.7% growth in 2025”

Summary and outlook

As higher interest rates continue to work their way through the economy, the BoC expects economic growth to slow, averaging around 1% through the second half of 2023 and the first half of next year. This implies real GDP growth of 1.8% in 2023 and 1.2% in 2024. The Canadian economy will then move into “modest excess supply” early next year before growth picks up to 2.4% in 2025.

In its July Monetary Policy Report, the Bank noted that CPI inflation is forecast to “hover” around 3% for the next year before gradually declining to 2% in the middle of 2025. This is a slower return to target than was forecast in its January and April projections. As a result, the Bank’s Governing Council remains concerned that progress towards its 2% inflation target “could stall, jeopardizing the return to price stability.”

In terms of what Canadians can expect in the near term, the Bank had this to say: “Quantitative tightening is complementing the restrictive stance of monetary policy and normalizing the Bank’s balance sheet.

Governing Council will continue to assess the dynamics of core inflation and the outlook for CPI inflation. In particular, we will be evaluating whether the evolution of excess demand, inflation expectations, wage growth and corporate pricing behaviour are consistent with achieving the 2% inflation target. The Bank remains resolute in its commitment to restoring price stability for Canadians.”

Stay tuned

Please circle September 6th, 2023 on your calendar as the date of the Bank’s next scheduled policy rate announcement.

Attention: The Bank of Canada Raised Your ARM Monthly Payment, Again!

Wed, 07 Jun 2023 20:15:04 GMT

Should you lock in?

If you're uncertain about your next steps after the recent Bank of Canada rate increase, it's crucial to assess your situation based on facts and consider the mathematical aspects. While remaining in your current arrangement may have its advantages, understanding the potential impact of rising rates is essential.

Predicting future developments accurately in the current economic climate is challenging. However, with a clear understanding of your budget, income, and employment status, you can make an informed decision. Additionally, note that inflation is not expected to subside soon.

Before locking in, it's crucial to understand the prepayment penalty risks associated with your current mortgage provider. Penalty calculations can vary greatly between lenders, potentially leading to significant costs. Exploring alternative lenders offering better terms may be worth considering if you meet their qualifying criteria and willing to bear the costs.

Take a closer look at today's fixed rates compared to a randomly chosen date of July 19, 2022, to gain perspective. Variable Rates have changed significantly over the past year, but Fixed rates tell a different story. Below is a chart comparing the Conventional mortgage rates for 3-year, 4-year, and 5-year fixed terms for these two time periods (using the same lender's conventional rates):

July 19, 2022:

Prime: 4.70%

3-year fixed: 5.54%

4-year fixed: 5.54%

5-year fixed: 5.34%

June 7, 2023:

Prime: 6.70%

3-year fixed: 5.64%

4-year fixed: 5.49%

5-year fixed: 5.44%

Interesting, isn't it? Despite the fluctuating nature of fixed rates, comparing these two time periods yield surprising results. (Lender rates can vary widely, so check your mortgage providers rates to see how their fixed rates stand today).

While fixed rates are influenced by multiple factors and not directly correlated to Bank of Canada announcements, understanding the impact of bond yields is crucial. Mortgage rates are influenced by the yield on government bonds and fixed-income instruments. Increases in bond yields may lead to higher mortgage rates, while decreases can result in rate declines.

If you decide to lock into a fixed rate term now, it means that you are committing to the contract rate until maturity, regardless of where fixed rate go. However, it's vital to consider potential prepayment penalties if 'life-happens' and you need to break your term contract.

If you have any questions or need assistance in making your decision, please don't hesitate to contact us. We're here to provide guidance and help you navigate your options effectively.

Another Bank of Canada Increase!

Wed, 07 Jun 2023 19:17:48 GMT

Bank of Canada Raises Policy Rate to Address Economic Growth and Inflation

The Bank of Canada recently announced a 25 basis points increase in its target for the overnight rate, now standing at 4.75%. Alongside this decision, they continue their quantitative tightening policy.

This move comes as global consumer price inflation is experiencing a decline due to lower energy prices, while underlying inflation remains high. In response, major central banks are contemplating further interest rate hikes to restore price stability.

The Canadian economy exceeded expectations in the first quarter of 2023, exhibiting a GDP growth of 3.1%. Consumption growth was robust and widespread, with increased spending on interest-sensitive goods. The housing market witnessed increased activity, and despite higher immigration and participation rates, the labor market remained tight. CPI inflation also rose to 4.4% in April, marking the first increase in ten months.

The Bank of Canada's decision to raise interest rates aims to address the persistent excess demand and potential inflation risks. Their focus is on restoring price stability, and they will closely monitor core inflation dynamics, excess demand, inflation expectations, wage growth, and corporate pricing behavior.

The Bank is committed to achieving its 2% inflation target and will provide a comprehensive outlook for the economy and inflation in the upcoming Monetary Policy Report, scheduled for release in July. The next announcement regarding the overnight rate target is scheduled for July 12, 2023.

Exploring Your Mortgage Renewal Options: Secure a Better Deal Today!

Sat, 27 May 2023 16:30:00 GMT

Knowledge Saves you Money!

Are you approaching the renewal date of your mortgage within the next six months? This is a crucial time to assess your options and make informed decisions that can pote ntially save you thousands of dollars. Take a moment to explore the following opportunities available to you:

1. Renew at Your Existing Lender : Renewing with your current lender may seem convenient, but it's essential to evaluate whether this option still aligns with your financial goals and offers the best terms. A thorough comparison is necessary to ensure you're not missing out on more favorable options elsewhere.

2. Switch to a New Lender with a Lower Rate : Market conditions fluctuate, and other lenders may be offering more competitive rates than your current one. Switching to a new lender could result in substantial savings on your monthly mortgage payments. It's worth exploring this possibility to secure a better deal for yourself.

3. Leverage Your Mortgage for Added Benefits : Consider increasing your mortgage to access the equity you've built over time. This opens up a range of opportunities:

a. Consolidate Debts: By using your increased mortgage amount, you can consolidate high-interest debts into a single, more manageable payment. This strategy allows you to save on interest and gain control over your finances.

b. Invest in Renovations: Tap into your home equity to fund renovations that enhance your living space, improve property value, and cater to your changing needs.

c. Purchase a Rental Property: Explore the possibility of purchasing a rental property as an additional income stream and an investment opportunity. Your increased mortgage can make this venture more accessible.

d. Purchase a New Primary Residence: If you're considering a new primary residence, using your increased mortgage to finance the purchase can provide flexibility and convenience.

4 . Decrease Your Mortgage If You Have Cash on Hand: If you have excess cash available, consider reducing your mortgage principal. By making a lump sum payment, you can lower your overall interest costs and potentially shorten the duration of your mortgage.

5. Harness the Power of a Home Equity Line of Credit (HELOC): A HELOC enables you to access funds based on the equity in your home whenever you need them. This line of credit can be a valuable resource for home renovations, education expenses, or unforeseen financial obligations.

6. Opt for a Re-Advanceable Mortgage: A re-advanceable mortgage combines your mortgage and a home equity line of credit. This option allows you to have ongoing access to your equity as your mortgage payments reduce your principal. It offers flexibility and convenience for future borrowing needs.

At Winona Reinsma Mortgages , we specialize in assisting homeowners like you with mortgage renewals. I guide you through the process, ensuring you secure the best deal tailored to your unique circumstances.

Contact me today for a quick pre- approval and a rate hold that guarantees your financial well-being throughout the renewal process. The earlier you start, the better your success will be.

Take control of your mortgage renewal and seize the opportunity to save. Act now, and let us help you make the most of this crucial financial milestone!

First Time Home Buyers Alert! New Savings Strategy!

Sat, 27 May 2023 05:12:23 GMT

Start with a plan to save for a home.

Did you know that there's a great way for prospective first-time home buyers in Canada to save for their dream home? It's called a first home savings account (FHSA), and it's a registered plan that allows you to save for your first home without paying any taxes on your savings (up to certain limits, of course). The FHSA was made available for opening on April 1, 2023, although financial institutions are gradually implementing it.

To qualify for opening an FHSA, you need to meet a few criteria. First, you must be at least 18 years old.

Second, you need to be a resident of Canada. And third, you should be a first-time home buyer.

Now, let's talk about your FHSA participation room. This refers to the maximum amount you can contribute to your FHSAs or transfer from your registered retirement savings plans (RRSPs) to your FHSAs in a given year, without going over the limit.

In the year that you open your first FHSA, your FHSA participation room is set at $8,000. This means you can contribute up to that amount without any issues.

There's also a lifetime FHSA limit, which is the maximum cumulative amount you can save in your FHSA over the course of your lifetime. For now, the lifetime limit stands at $40,000.

It's important to note that any contributions you make to your FHSAs and any transfers from your RRSPs to your FHSAs will count towards your lifetime limit. So, as you save and transfer funds, your remaining lifetime FHSA limit will decrease.

Lastly, if your contributions and transfers to your FHSAs in a particular year exceed your FHSA participation room for that year, you will end up with an excess FHSA amount.

To learn more about what happens in such cases, you can refer to the section o n "What happens if you contribute or transfer too much to your FHSAs."

Remember, the FHSA is an excellent tool for aspiring homeowners in Canada to save for their first home while enjoying certain tax benefits. So, open an account as soon as they are available and start saving!

If you want to find out about more saving strategies, give me a call and we can customize a plan for your situation!

Foreign Buyer Policy Changes

Fri, 31 Mar 2023 23:00:00 GMT

Government tweeks 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.

To read the article please here: Article

Speculation and Vacancy Tax Deadline: March 31

Fri, 31 Mar 2023 01:48:33 GMT

Don't delay - online or phone options are available.

This is a quick reminder that the deadline to file your Speculation & Vacancy Tax is Friday, March 31, 2023. You must fill this in every year!

If you did not receive your letter ID and Declaration Code in the mail, you can contact 1-833-554-2323 and file over the phone.

More information on the BC Speculation & Vacancy Tax can be found here !

Renting versus Buying Your Own Home

Sat, 25 Mar 2023 00:01:25 GMT

The Pros and Cons of Ownership or Renting

T he decision to rent or buy a home is a significant one that requires careful consideration. There are pros and cons to both options, and what may be right for one person may not be right for another.

In this post , we will examine the benefits and drawbacks of each option to help you make an informed decision.

Pros of Renting

Flexibility: One of the biggest advantages of renting is the flexibility it provides. Renters can move easily without having to worry about selling their home, which can be a lengthy and stressful process.
No maintenance costs: When you rent, the landlord is responsible for the maintenance and repairs of the property. This means that you don't have to worry about unexpected expenses, such as a new roof or plumbing repairs.
Lower upfront costs: Renting typically requires lower upfront costs than buying a home. You may only need to pay first and last month's rent, a security deposit, and any application fees.
No property taxes: Property taxes can be a significant expense for homeowners, but renters don't have to worry about them. Property taxes are the responsibility of the landlord.
No down payment: When you rent, you don't need to save up for a down payment. This can make it easier to get into a rental property than it is to buy a home. While renting you can choose to diversify your investments or build up an emergency fund.
If you don't like where you live, you just give notice and move on.

Cons of Renting

No equity: When you rent, you don't build equity in the property. This means that you won't be able to use the property as collateral for a loan or use it to build wealth.
No control over the property: As a renter, you are subject to the rules and regulations set by your landlord. You may not be able to make changes to the property, such as painting or installing new fixtures.
Rent increases: Your rent can increase at the end of your lease, which can make it difficult to budget for the future. You may also have to move if the landlord decides to sell the property.
No tax benefits: Homeowners can deduct mortgage interest and property taxes on their income taxes, but renters cannot.
Limited customization: As a renter, you may not be able to personalize the property as much as you would if you owned it.

Pros of Buying

Build equity: When you own a home, you build equity in the property. This can be used to secure loans, such as a home equity loan, or to build wealth.
Control over the property: Homeowners have complete control over their property. They can make changes and improvements as they see fit, without having to ask for permission.
Potential for appreciation: Over time, home values tend to increase, which can result in a higher resale value for homeowners.
Tax benefits: Homeowners can deduct mortgage interest and property taxes on their income taxes, which can result in significant savings.
Customization: Homeowners can personalize their homes to their liking, which can make it a more comfortable and enjoyable living space.

Cons of Buying

Higher upfront costs: Buying a home typically requires a significant amount of money upfront, including a down payment, closing costs, and other expenses.
Maintenance costs: Homeowners are responsible for the maintenance and repairs of their property, which can be costly and time-consuming.
Less flexibility: Selling a home can be a lengthy and stressful process. Homeowners may also have difficulty moving if they need to relocate for work or other reasons.
Property taxes: Homeowners are responsible for paying property

Property ownership is not for everyone. Like most things in life, owning a home and having a mortgage becomes a life style choice that has both rewards and limitations.

However, b uilding for the future, and securing a home for your family is important to most Canadians. Working with a mortgage expert who will guide you through the process will help you navigate the transistion from renter to home owner successfully. Give me a call and we can have a chat about planning your future.

Basics Series: Fixed vs Variable

winonareinsma@gmail.com (Winona Reinsma) — Sat, 14 Jan 2023 22:13:49 GMT

Pick your mortgage term after you have all the facts.

Selecting your mortgage term is an important decision you need to make when applying for a mortgage, that will determine your monthly payments. There are many significant differences are between a fixed rate term and a variable rate term other than just the interest rate.

A fixed-rate mortgage has an interest rate that remains the same for the entire term of the loan, typically 25 or 30 years. A variable-rate mortgage, also known as an adjustable-rate mortgage (ARM), has an interest rate that can change over time, typically in response to changes in a benchmark interest rate such as the prime rate. This means that with a variable-rate mortgage, your monthly payments can increase or decrease over time.

Fixed-rate mortgages offer predictability and stability, as the borrower knows what their monthly payment will be for the entire term of the loan. This can make budgeting and planning easier. Variable-rate mortgages, on the other hand, can be riskier for borrowers, as the interest rate and monthly payments can change unexpectedly. However, they typically have lower initial interest rates, which can make them more affordable for some borrowers. (There are different types of Variable -ARM terms, but we will cover that in a separate post).

One of the most important features to consider before deciding on your mortgage term, is the prepayment penalties of each option. In Canada, six out of every ten mortgages contracts are paid out or rewritten before maturity and the penalty charges seriously impacts what your true cost of borrowing actually is. You can pay dearly for not checking into this as every bank calculates and applies these penalties differently. Unfortunately, many people don't consider this risk when they sign up for a new mortgage term.

It's important to weigh the pros and cons of both types of mortgage options and consider your personal financial situation and risk tolerance before making a decision. It's also wise to consult with a financial advisor or mortgage broker to get more information and help you make the best decision for your situation.

Don't be shy about asking questions and make sure you fully understand the features, benefits, pros and cons of your options before siging the contract for your next mortgage term. Every financial institution has their own rules, methods, and procedures, so don't assume; always ask and confirm!

Inflation and Interest Rate Increase Anxiety

winonareinsma@gmail.com (Winona Reinsma) — Tue, 18 Oct 2022 20:59:16 GMT

Canadians feeling the squeeze as BOC marches on.

While Canadians already experienced a full one percent interest rate increase, only to be followed by another three quarter bank prime rate hike, economists anticipate everything from zero to another half a percent increase on October 26th. With only two scheduled announcements remaining in 2022, will the the Bank of Canada stay on the "reduce inflation at all costs" path? We will have to wait for the subtext in the next announcement.

Here is today's update:

Inflation and rising interest rates are having a very real affect on Canadian spending habits and housing affordability according to a pair of new reports.

The latest survey by the Angus Reid Institute suggests that nearly 90% of Canadians are “tightening their belts” as a result of rising costs, an 8-point increase from August.

Most (66%) are cutting back on discretionary spending but fully half are delaying major purchases like appliances, cars and homes. More than a quarter (26%) now say they are taking the troubling step of deferring contributions to savings – which could include savings for a home – or to their retirement. That is up from 19%, who said the same thing, just six weeks ago.

The survey also suggests nearly half of Canadians feel their financial situation is worse now than it was a year ago.

Against this tight-money backdrop one Canada’s big, chartered banks is reporting the worst housing affordability it has ever recorded.

Using the ratio of mortgage carrying costs to household income the bank’s, so-called, “aggregate affordability measure” hit 60%. That beats the previous worst-ever reading of 57%, hit in 1990.

The bank expects the current housing market correction to push prices down 14% by the end of the year which, it says, will help affordability. But it also expects on-going interest rate increases to delay the benefits of any price declines.

Forecasts For Further Increases Tip Towards, "No More in 2022"

winonareinsma@gmail.com (Winona Reinsma) — Wed, 07 Sep 2022 20:43:49 GMT

Forcasting Future Rates is Not an Exact Science

I had a little fun with selecting the images for this post, but rising interest rate is no laughing matter. Since we are faced with yet another .75% increase by the Bank of Canada today, I thought that I would share the opinions of two experts in this post from August 6th. They were correct about today's increase, so let's hope they are correct about the rest!

September has arrived and the central bankers are back from their summer vacations. With that they will resume setting interest rates and fighting inflation.

The Bank of Canada, the U.S. Federal Reserve and the European Central Bank are all making rate announcements this month. Market watchers are forecasting increases across the board. The questions of how big they will be and how many more are coming, are the topics of lively debate.

Here in Canada the majority position puts the increase at either 50 basis points or 75 basis points. There are a few outliers who think the Bank could surprise with another full percentage point increase.

(Projections for Europe and the U.S. fall within the same range.)

Any increase at the higher end of the range would push the BoC’s trend-setting overnight rate out of its neutral zone and into restrictive territory. The Bank considers a 2% to 3% rate to be neutral; it neither enhances nor restricts economic growth. A 75 bps increase would bump the overnight rate to 3.25%.

After this week analysts, generally, expect to see one more rate hike by the end of the year, putting the overnight rate at 3.50%. There are settings scheduled for October and December.

At the same time there are those who expect this week’s increase to be the last. Big bank economists Benjamin Tal and Karyne Charbonneau are forecasting a 75 pbs hike and then a pause until the end of 2023. That forecast appears to be based on the idea that the heavy debt loads being carried by Canadian households are amplifying the effects of interest rate increases and inflation.

Residential Mortgage Commentary - Realtors and bankers expect short housing correction

winonareinsma@gmail.com (Winona Reinsma) — Wed, 07 Sep 2022 20:34:25 GMT

Q. Are prices dropping? A. Yes, but not for long!

The July home sales and price numbers from the Canadian Real Estate Association continue to point to an ongoing correction in Canada’s housing market.

Sales were down 5. 3% from June and were down more than 29% from a year earlier. The national average home price fell 5% year-over-year, but that was heavily influenced by declines that were confined to British Columbia and Ontario.

CREA’s preferred measure, the Aggregate Composite MLS Home Price Index (HPI), edged down 1.7% from June to July, but remained almost 11% higher than a year ago. The Association believes the correction will be relatively short lived. It expects to see both buyers and sellers return to the market once inflation and interest rates stabilize.

In a recent report economists Robert Hogue, Carrie Freestone and Naomi Powell also call for a relatively short correction. They suggest immigration and shrinking household size will support the housing market.

“We expect the number of Canadian households to rise by 730,000 by 2024 compared to 2021, adding 240,000 new households annually. Immigration is key … targets are set to bring in a record 1.3 million new permanent residents, adding 555,000 new households,” they write.

“Even a relatively small decline in average household size has a big impact on the number of new housing units required. Over the five years leading up to 2021, average household size declined by 0.02 people … enough to raise the total number of households by 140,000. This trend will be responsible for just under 90,000 of the 730,000 new households created by 2024—and will provide a significant boost in housing demand,” the report says.

Bank of Canada Raises Key Interest Rate by 75 bps

winonareinsma@gmail.com (Winona Reinsma) — Wed, 07 Sep 2022 17:12:00 GMT

More increases to come.

Overview:

"The Bank of Canada has raised its overnight target rate by 75 basis points, bringing it to 3.25%.

This is the Bank’s fifth consecutive rate hike and was fully expected by markets.

The Bank said short-term inflation expectations remain high, adding “The longer this continues, the greater the risk that elevated inflation becomes entrenched.” It also said the housing market is “pulling back as anticipated.”

In its statement accompanying the decision, the Bank said, “ Given the outlook for inflation, the Governing Council still judges that the policy interest rate will need to rise further… we will be assessing how much higher interest rates need to go to return inflation to target .”

Banks and other financial institutions are expected to raise their prime rate in the coming days, which will increase rates for variable-rate mortgage holders."

For variable rate mortgage holders, if you haven't done so already, check with a mortgage broker to do a cost comparison before you panic and lock-in with your bank. Rates are expected to go up further until inflation is reigned in, however there are significant downsides to locking in that you need to be aware of. Call for a complementary information session to ensure you have all the information you need before deciding if you should lock in or increase your monthly payment.

More Details:

Today, the Bank of Canada increased its overnight benchmark interest rate 75 basis point to 3.25% from 2.50% in July. This is the fifth time this year that the Bank has tightened money supply to combat inflation. While the latest increase was comparatively smaller than the move made in July (100 basis points), it is bigger than the changes made in March (+0.25%), April (+0.50%) and June (+0.50%).

Moreover, the Bank stated it is not finished hiking its policy interest rate just yet and noted that central banks around the world also “continue to tighten monetary policy.”

These are the highlights of today’s announcement.

Inflation at home and abroad

In Canada, CPI inflation eased in July to 7.6% from 8.1% because of a drop in gasoline prices; however, inflation (excluding gasoline) increased and data indicate a “further broadening of price pressures,” particularly in services
The Bank’s core measures of inflation continued to move up, ranging from 5% to 5.5% in July
Surveys suggest that short-term inflation expectations remain high domestically and “the longer this continues, the greater the risk that elevated inflation becomes entrenched”
Global inflation remains high and measures of core inflation are moving up in most countries

Economic performance at home and abroad

The Canadian economy continues to operate with excess demand and domestic labour markets remain “tight”
Canada’s GDP grew by 3.3% in the second quarter – somewhat weaker than the Bank had projected – but indicators of domestic demand were very strong
Canadian consumption grew by approximately 9.5% and domestic business investment was up by almost 12%
Commodity prices have been volatile: oil, wheat and lumber prices have moderated while natural gas prices have risen
Economic activity in the United States has moderated, although the U.S. labour market also remains tight
China is facing ongoing challenges from COVID shutdowns

Canadian housing market

With higher mortgage rates, the housing market is pulling back “as anticipated” following “unsustainable growth during the pandemic”

Looking ahead

The Bank expects the Canadian economy to “moderate” in the last half of 2022 as global demand weakens and tighter monetary policy begins to bring demand more in line with supply.

However, given the outlook for inflation, the Bank’s Governing Council continues to note that its policy interest rate will “need to rise further.”

To underscore its current thinking, the Bank wrote that it remains “resolute” in its commitment to price stability and will continue to take action as required to achieve a 2% inflation target.

On the bright side, the Bank offered that as the effects of tighter monetary policy work through the economy, it “will be assessing how much higher interest rates need to go to return inflation to target.”

October 26, 2022 is the BoC’s next policy announcement date at which time it will also make its fourth Monetary Policy Report of the year available for review. As always, First National will follow this seminal event. For other capital market insights, please stay tuned to the Resources page of our website on a regular basis.

Get The Reverse Facts!

winonareinsma@gmail.com (Winona Reinsma) — Wed, 31 Aug 2022 23:30:00 GMT

Do you know about the Reverse Mortgage advantages?

If you want just the facts and no fiction - call to set up a complementary consultant with me at 778.246.2547 to see if a reverse mortgage is right for you.

It's not right for everyone, but for those that have the correct circumstances and needs , it can be life-changing!

Did you know that there are two lender offering a reverse mortgage product and each offers special benefits? We can walk through the pros and cons together and then if it is a fit, we will work together to put everything in place for you. Best of all, my services are free and do not cost you one cent extra.

Also I love talking with your family if you wish, so everyone is comfortable with your decision. Or keep it to yourself, if you prefer privacy. You are in control.

With a reverse mortgage option, you k eep your family home with all it's memories for as long as you want, so you can enjoy your retirement years living where you feel at home!

Q2 2022 Mortgage Review

winonareinsma@gmail.com (Winona Reinsma) — Sun, 28 Aug 2022 00:45:00 GMT

CMHC sees an even sharper decline for sales .

Uncertainty, inflation and rising interest rates have cast a shadow across the Canadian housing market. The last quarter saw marked declines in home sales and prices. Fo recasts for the rest of this year and into 2024 have all been pulled back.

Higher Borrowing Costs

The Canadian Real Estate Association has adjusted its projections downward based almost solely on rising interest rates and the federal mortgage stress test.

“A critical element of the story has been the impact that discounted 5-year fixed mortgage interest rate levels have had on the stress test. In April 2022 alone, discounted 5-year fixed rates increased from the low 3% range to the low 4% range. The stress test is the higher of 5.25% or the contract rate plus 2%. For fixed rate borrowers, qualifying for the stress test has moved from 5.25% to the low 6% range – close to a 1% increase.

Variable rates will now be playing catch-up over the balance of 2022,” said CREA in its abbreviated 2nd-quarter report.

Slowing Sales

The Association expects to see about 568,300 homes change hands by the end of the year. That is down from the more than 621,000 forecast at the end of Q1. Even though it represents a 15% drop from 2021, it would still leave 2022 as the second best year on record. Looking ahead to 2023, CREA predicts sales will pull back another 3%, to about 552,400 units.

C anada Mortgage and Housing Corporation sees an even sharper decline for sales, looking forward to the middle of next year.

The chief economist with federal housing agency, Bob Duggan, has developed projections based on the Bank of Canada’s Policy Rate going as high as 3.5%. Give that the rate is now 2.5% and more increases have been promised, 3.5% seems quite realistic.

In Duggan’s scenario, sales will drop by as much as 34% by mid-2023 compared to the record setting levels reached earlier this year. He expects sales to return to their long term trend as mortgage rates stabilize and the economy starts to recover heading into 2024.

Pricing Projections Mixed

Duggan expects rising mortgage rates will trigger a modest decline in home prices of between 3% and 5% from their current, elevated levels.

On the other hand, the Realtors see reduced, but still impressive, price growth, with the national average home price rising nearly 11% to more than $762,000 this year. A further gain of about 3% is forecast for 2023, which would push the national average to more than $786,000. But both of those numbers are lower that the forecasts in CREA’s Q1 report.

Overall Decline

In a recent report, well known real estate economist Robert Hogue issued an overall downgrade.

“We project home resales to fall nearly 23% this year and 15% next year in Canada, and the national benchmark price to drop more than 12% from peak to trough by the second quarter of 2023,” Hogue wrote.

Despite Challenges, Desire to Own Is Still Strong

winonareinsma@gmail.com (Winona Reinsma) — Sat, 27 Aug 2022 00:45:00 GMT

We Still Desire Homeownership!

T he current situation in the Canadian housing market has both buyers and sellers stepping to the sidelines. But underneath all of the recent shuffling there still seems to be a firm, foundational desire to own a home.

The annual affordability survey conducted by RE/MAX suggests rising interest rates have become a significant, growing concern for those looking to get in to the housing market. Twenty-four percent of respondents cite rising rates as a barrier to entry, up 6% from the last survey. Closely related to interest rates, 24% say “market volatility” is keeping them out.

The survey suggests, though, that the biggest barrier to entry remains high prices. Forty-three percent pointed to high cost, an increase of just 1% from last year.

Other key factors:

35% - higher cost of living

24% - a shortfall in salary.

But the survey also suggests Canadians remain determined to have their own home with 68% saying they are willing to make at least one sacrifice in order to realize that ambition. Of those, 64% say they are prepared to relocate to get a home they can afford. Half of those people, though, are not prepared to move more than 100 kilometres from their current location. (RE/MAX speculates that this may be related to the decline in “work from home” opportunities.)

Other common sacrifices:

56% - adjusting the type of home they would purchase

29% - co-ownership with family or friends

27% - renting a portion of their home to generate income

Affordability Update

winonareinsma@gmail.com (Winona Reinsma) — Fri, 26 Aug 2022 00:31:42 GMT

Housing costs at more than 50% of d isposable income.

Sales are slowing, prices are falling, interest rates are rising and affordability is getting worse in the Canadian housing market.

The Bank of Canada’s latest Housing A ffordability Index (HAI), for the first quarter of this year, shows households now have to dedicate 42.8% of disposable income to housing-related expenses. That is up sharply from 39.7% in the fourth quarter of 2021 and 34.7% from a year ago.

The HAI is now at its highest level since the third quarter of 1991, which is seen as the height of the last real estate cycle. Higher borrowing costs are cited as the key reason for the deterioration in affordability.

When calculating the Index, the BoC looks at so-called carrying costs, which include mortgage payments and utilities, compared to disposable, or after-tax, income.

One of the country’s big banks is echoing the BoC’s findings. In its quarterly “Housing Affordability Monitor”, that is based strictly on mortgage carrying costs, the chartered bank puts housing costs at more than 50% of disposable income.

Affordability is expected to erode further in the coming quarters, even as home prices continue to adjust to higher interest rates. Optimistic forecasters are predicting that adjustment will happen fairly quickly and affordability will begin to improve by the end of this year.

Several of the country’s big financial institutions have issued reports down-grading their expectations for Canada’s real estate market. Many see home prices dropping more than 20% from their pandemic peaks over the next year, or so.

A Sinking Feeling

winonareinsma@gmail.com (Winona Reinsma) — Fri, 26 Aug 2022 00:27:35 GMT

Are we drowning in expenses and debt?

The lazy, hazy, crazy days of summer have been hot across much of Canada and consumer sentiment seems to be wilting.

Recent data from the non-profit research foundation, Angus Reid Institute, suggests three-quarters of Canadians feel now is a bad time to make a major purchase. Cars, trips, renovations and homes are being set aside in favour of essentials like groceries and gas.

Just 15% say now is a good time for a big purchase. That number is half what it was two years ago, in the early days of the pandemic lockdowns.

Other major research and polling firms, like The Conference Board of Canada, Ipsos and Nanos all report consumer confidence that is below long-term averages, and sinking.

Inflation, interest rates and uncertainty appear to have Canadians trying to keep their money in their wallets even though the desire for home ownership remains strong. Instead of entertaining themselves watching a new, big-screen TV, they are watching the Bank of Canada instead.

With the average household owing $1.83 in debt for every $1.00 of disposable income, Canadians are very sensitive to interest rate increases. The Angus Reid research suggests 71% of Canadians are keeping a close, or very close, eye on the central bank’s fight against inflation. Many of them do not like what they are seeing. More than half, 53%, say they do not have confidence the Bank is making the right decisions as it raises interest rates to curb rising inflation.

One third, 33%, indicated they have more faith in the Bank of Canada.

Reverse Mortgages Can Be Used For More Than You Think

winonareinsma@gmail.com (Winona Reinsma) — Thu, 14 Jul 2022 21:27:26 GMT

This versatile option can be a life-saver!

Thousands of Canadians are using a reverse mortgage as a financial solution to help them bridge their retirement savings, but did you know just how versatile a reverse mortgage is?

Among the many reasons for reverse mortgage funds, HomeEquity Bank lists the most common reported use of funds.

Health Care related– Many Canadian homeowners use reverse mortgage funds for some health care expenses, whether for personal support work or to simply pay off debt related to those expenses.

Renovations/Retrofitting– Renovations or home retrofitting are common reasons for Canadians 55+ to apply for a reverse mortgage. Many 55+ homeowners need home renovations/home retrofitting due to wear and tear, leading to their standard of living being compromised or simply because of aging and mobility.

Income Supplement– Did you know that the average annual expenses for Canadians 65+ is $60,000 yet their average income is only $40,000? Many 55+ clients use reverse mortgage funds to supplement their income.

Unplanned Expenses – Sometimes planned retirement savings do not account for emergencies and that’s where a reverse mortgage can help.

Here are the biggest unexpected costs for retirement:

· 30% had unexpected emergency costs

· 30% needed to help family financially

· 24% needed to help finance health issues

A reverse mortgage continues to be a great financial solution to help you with your financial needs.

If you would like more information about how a reverse mortgage can help you or someone you know, live a better retirement, please contact me today.

Breaking News! Bank Of Canada Increases 100 Basis Points!

winonareinsma@gmail.com (Winona Reinsma) — Wed, 13 Jul 2022 19:13:02 GMT

Overnight Target Rate is Now 2.5%

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Inflation and the R word.

winonareinsma@gmail.com (Winona Reinsma) — Tue, 12 Jul 2022 01:05:24 GMT

Market Commentary for July 11, 2022

COVID variants. Inflation. Interest rates. And now, recession. It seems as though we are being exposed to a new crisis with every cycle of the moon. No wonder consumer c onfidence is, at best, ambivalent.

The latest round of chatter from the nation’s economists says Canada will likely see an economic downturn toward the end of this year. It has happened before as the central bank fought to control inflation.

But the news is not all bad. The Canadian economy is strong. Unemployment is at a historic low and GDP growth is the best in the G7. Even the key items driving inflation have an upside. High fuel prices are boosting Canada’s important energy sector and high food prices are bolstering the country’s agriculture industry.

None the less, the economists point out that, inflation is eating away at the spending power that was accumulated during the pandemic. Sharply rising interest rates have already cooled the demand for housing and softened real estate prices, while increasing the burden on debt-laden Canadians.

The current debt-to-income ratio shows the average Canadian household owes $1.83 for every dollar of disposable income.

The expectation is, GDP will contract through the middle quarters of next year.

Generally, though, the economists seem to agree that any possible recession will be relatively moderate and short. And they continue to use the phrase “soft landing” when talking about the economy returning to normal. And once inflation is in check the Bank of Canada will be able to start reducing interest rates.

Bank of Canada Increases Lending Rate with More Interest Rate Hikes To Come

winonareinsma@gmail.com (Winona Reinsma) — Wed, 01 Jun 2022 20:53:17 GMT

How Far Will They Go?

Another Jumbo Rate Hike, Signalling More To Come with hawkish predictions and continuing the squeeze on Canadians!

Today's announcment summary by Economist Dr Sherry Cooper.

The Governing Council of the Bank of Canada raised the overnight policy rate by a full 50 basis points once again tod ay, marking the third rate hike this year. The two back-to-back half-point increases are without precedent, but so were the dramatic pandemic rate cuts in the spring of 2020. Indeed, with the surge in Canadian inflation to 6.8% in April, the Bank of Canada is still behind the curve. The chart below shows that inflation remains well above the Bank's forecasts. Today's press release suggests they now estimate that inflation rose again in May and could well accelerate further.

Today's policy statement emphasized that "As pervasive input price pressures feed through into consumer prices, inflation continues to broaden, with core measures of inflation ranging between 3.2% and 5.1%. Almost 70% of CPI categories now show inflation above 3%. The risk of elevated inflation becoming entrenched has risen. The Bank will use its monetary policy tools to return inflation to target and keep inflation expectations well anchored."

"The increase in global inflation is occurring as the global economy slows. The Russian invasion of Ukraine, China's COVID-related lockdowns, and ongoing supply disruptions are all weighing on activity and boosting inflation. The war has increased uncertainty and is putting further upward pressure on prices for energy and agricultural commodities. This is dampening the outlook, particularly in Europe. In the United States, private domestic demand remains robust, despite the economy contracting in the first quarter of 2022."

The Bank said that "Canadian economic activity is strong and the economy is clearly operating in excess demand. National accounts data for the first quarter of 2022 showed GDP growth of 3.1 percent, in line with the Bank's April Monetary Policy Report (MPR) projection. Job vacancies are elevated, companies are reporting widespread labour shortages, and wage growth has been picking up and broadening across sectors. Housing market activity is moderating from exceptionally high levels. With consumer spending in Canada remaining robust and exports anticipated to strengthen, growth in the second quarter is expected to be solid."

Bottom Line

The Bank of Canada couldn't be more forthright. The concluding paragraph of the policy statement is as follows: "With the economy in excess demand, and inflation persisting well above target and expected to move higher in the near term, the Governing Council continues to judge that interest rates will need to rise further. The policy interest rate remains the Bank's primary monetary policy instrument, with quantitative tightening acting as a complementary tool. The pace of further increases in the policy rate will be guided by the Bank's ongoing assessment of the economy and inflation, and the Governing Council is prepared to act more forcefully if needed to meet its commitment to achieve the 2% inflation target."

The Bank of Canada has told us we should expect at least another 50 bps rate hike when they meet again on July 13. It could even be 75 bps if inflation shows no sign of decelerating. The Bank estimates that the overnight rate's neutral (noninflationary) level is 2%-to-3%. Traders currently expect the policy rate to end the year at roughly 3%.

This was a very hawkish policy statement. The central bank is defending its credibility and will undoubtedly continue to tighten monetary policy aggressively.

Cosigning Mortgages And What It Means

winonareinsma@gmail.com (Winona Reinsma) — Tue, 31 May 2022 17:55:20 GMT

Cosigning a mortgage comes with responsibility and risks.

By Jonathan Russell Canadian Mortgage Professional Magazine

Somebody other than the prospective homeowner (typically a family member or friend) will usually co-sign on a mortgage if the prospective homeowner’s credit and income are not enough for them to qualify themselves. And it works both ways. It is possible that a family member or friend will one day ask that you co-sign on a mortgage if you have good credit and are financially stable.

To co-sign on a mortgage means that you agree to cover the prospective homeowner’s loan should they, for whatever reason, be incapable of affording their own payments or if they default. If you do agree to co-sign, you will become a co-borrower until your name is taken off the contract when the homeowner is financially stable or until the homeowner pays off their loan. You would not, however, receive any of the standard benefits of the mortgage.

Whether the primary borrower is the person making the payments, the co-signer agreement means the lender will be guaranteed that the loan payments will be made, one way or another. Because of that guarantee, the homeowner will have a better time qualifying for a good loan, payment plan, and interest rate.

When does a mortgage applicant need a co-signer?

A mortgage applicant would need a co-signer if he or she has bad credit. Most commonly, a fresh graduate with a short employment history would have bad credit, in which case a co-signer would usually be needed for a first-time home purchase. Another common example, historically, was a borrower who had damaged their credit history after running into trouble on loans or making payments.

Today, the real estate market offers some of the best-ever mortgage rates, though there are plenty of reasons to ask someone to co-sign on your mortgage. Low wages coupled with higher home prices and strict lending criteria all play a role.

Co-signer vs. guarantor: what’s the difference?

The difference between a co-signer versus a guarantor basically comes down to claim over the property or share of the home’s title, among other factors. A co-signer is a person who will agree to make the homebuyer’s mortgage payments if he or she can not afford them, or if they default on their loan. Typically, a mortgage co-signer is a parent, guardian, or sibling. Because the mortgage co-signer and the homebuyer are both connected to the loan, their credit history, debts, and income will be inspected. This means that the co-signer could have some claim over the property.

While a mortgage guarantor also provides a guarantee that the homebuyer will make the mortgage payments, regardless of the circumstance, a guarantor does not sign the mortgage, share the home’s title, or own a portion of the property. Usually, a guarantor will help a strong applicant qualify for an even better interest rate or mortgage but will still have their credit and finances scrutinized.

Risks of co-signing a mortgage

There is a major risk when co-signing a mortgage. You should only consider acting as a co-signer if you are 100% confident with sharing the debt that may come your way. Since parents and other family members are more likely to have strong credit and bigger incomes in later life, the majority of Canadians turn to family to act as co-signers. Rather than simply tapping a person who is stable financially, however, it is important to ensure they are reliable if they have to take over the mortgage payments. Your co-signer might not be your co-signer indefinitely, but it will likely be uncomplicated and safer for all involved if you can one day resume your mortgage payments, letting them off the hook.

Steps to co-signing a mortgage in Canada

If you default as primary borrower, it could cause you serious damage financially. This is where a co-signer would step in—making it a major responsibility for them. It is critical, therefore, that everyone exercise due diligence throughout the process. If you want to co-sign a mortgage in Canada, here are some steps you will need to take.

Copy the paperwork. Prior to signing—read everything, first and foremost. Then retain copies of any and all paperwork for your own records.

Get mortgage account info. Make sure that the mortgage payments are being made promptly each month. This step is especially important because late payments impact your credit score.

Get insurance. To cover debts in the event of disability or death, encourage the primary borrower to get suitable term life insurance or mortgage life insurance.

Understand the legality. Since your estate and taxes could be affected if you co-sign on a mortgage, ensure you talk with a real estate lawyer. That will help you fully grasp the implications of co-signing on a mortgage.

Is it a good idea to co-sign a mortgage?

Prior to signing any type of contract, it is critical to assess the situation and conduct your research, whether you are asking another party to co-sign your mortgage or you are asked to act as co-signer. Co-signing a mortgage is a heavy responsibility financially minus any of the benefits of being a true property owner.

It is important to remember, however, that when you co-sign on a mortgage you are also a partial borrower. If the homebuyer defaults or is for whatever reason unable to make the mortgage payments, you will be on the hook. For that reason, co-signers are usually financially established people like parents or family members.

April Real Estate Statistics - On The Ground

winonareinsma@gmail.com (Winona Reinsma) — Tue, 10 May 2022 18:00:37 GMT

From our partners at Adlaw Appraisals

As a Mortgage Broker, it is my job to order the appraisals for the lender. Adlaw appraisers have always been one of my preferred firms as they offer timely and cost effective service. Often Appraisers are boots on the ground, first in line to spot changing trends and seeing what is happening in the market. They are a fabulous source of information. Here is a great summary of the April local real estate market from their appraisers.

We have 15 appraisers servicing the GVA and Okanagan. You’ve heard enough from me over the last decade, here are some snippets of what my appraisers are observing in their service areas. It does accurately reflect the April statistics provided by the Greater Vancouver, Fraser Valley and Okanagan real estate boards. Let our team’s knowledge of local markets help you get the value you deserve.

Kurtis Trinh (GVA) ”I am noticing a slow down in sales due to increased interest rates and a general downward trend in values. Pre-sales for new developments are also hot with waitlists of 1,000 + people trying to get a certain desirable unit location”

Saleh Abdulrhman (Kelowna) “The housing market in Kelowna has cooled off after a hot winter market. Benchmark statistics show an overall increase in values this winter of 5-7% across all property types. Land assemblies and developer interest remain high in the downtown and Rutland areas”

Gareth MAcdonald (Review Manager) “It appears the suburban satellite city boom from Covid-19 is beginning to show signs of stalling and in certain markets a slight pull back.”

Oscar Demirbas (Abbotsford / Chilliwack) “Larger lots with older homes are being sold at very high price points due to increased density allowed under the Future Land Use plans. This involves rezoning but buyer’s appear to be very optimistic that rezoning and redevelopment will be approved by the city. A cool down is expected.”

Harry Nie (Surrey / Burnaby) “Houses over the 1.4 Million mark have slowed down in volume, not in values. The market for rentals, especially of 1 bedroom apartments, has increased dramatically in North Surrey. Anthem Properties is building some beautiful new developments (residential/retail/office) in Brentwood as well.”

Amandeep Sidhu (Surrey / Langley / Abbotsford) “I am seeing improvements in listings and higher days on market along with minor price adjustments over the last few “super hot” months, all this with changes in interest rates and cooling off legislation (Bill -12) – important economic and political changes. ”

Claire Gibson (Vernon) “An area of interest in Vernon is the Okanagan Gondola Project. The gondola is proposed to be 1600 feet up, located in and around the Baileys corner and the Rail Trail areas. The proposed project will overlook Kalamalka lake and the surrounding area. I believe increased tourism will increase Vernons exposure affecting the real estate market.”

Mikhail Geyne (Tri Cities) “Since the increase in the interest rates by the Bank of Canada, I’ve noticed that the buyers in general have become more picky in their purchase options as well as the timeline for buying a real estate property, in general, has increased since the beginning of the year.”

Arden Schafer (Vancouver / North Shore) “While the market has come off its March highs, it remains strong. With the recent rise in interest rates and the expectation of further rate hikes to come, I would expect the market to continue to gradually slow down over the coming months.”

The Variable or Fixed Question

winonareinsma@gmail.com (Winona Reinsma) — Tue, 10 May 2022 17:49:20 GMT

Once you go Fixed, you lock in penalties.

Should I lock in? Should I go Fixed or Variable? This is the most common question today. However, fear should not be in the driver's seat of your decision-making. While rising rates does mean that monthly mortgage payments will be higher, converting into a fixed term now means that not only will you be instantly paying much more interest, but you are subject to exhorbinate penalties should you have to break your mortgage term. Let's review the latest benchmark move.

Bank of Canada Raises Rates 0.50%: What This Means for You

The Bank of Canada (Boc) raised its benchmark rate by 0.50%, a move that’s expected by those in the industry to be the first of a series of smaller increases this year.

This increase affects all borrowers with a variable rate loan.

How Does this Affect Lending Products?

Variable Rate Mortgages and Lines of Credit

If you have a variable rate mortgage or a Line of Credit you should expect to see a slight increase on your interest rate and monthly payments. Each lender will adjust their bank prime lending rate accordingly, and is now in the range of 2.70 percent.

Increase in Monthly Payments

While only small, this increase still has an impact; per $100,000 borrowed monthly payments should increase around $13.00.

Fixed Rate Mortgages

If you are in a fixed rate mortgage, this increase won’t impact you.

How Does This Affect Variable Rate Mortgages?

Can I Lock in My Variable Rate Mortgage?

Yes, if you are in a variable rate mortgage you can lock in for a fixed rate.

How Do Fixed and Variable Interest Rates Compare?

Most borrowers variable rate mortgages are around 1.6% with 5-year fixed rates well over 3.8%.

Should I Lock in My Variable Rate Mortgage?

I am advising clients not to lock in their variable rate mortgages, unless you have a compelling reason to pay a significantly higher monthly payments . Unlike fixed rate mortgages which have significantly higher penalties when the mortgage term is broken, variable rate mortgages have the ability to be locked in at any time and have substantially lower penalties when the mortgage term is broken.

What You Need to Know

If you have a variable rate mortgage you shouldn’t lock it in for a fixed rate without looking at the math. Most borrowers would need to see interest rates increase another 3 to4 times to match today’s fixed rate. While some economists are predicting more aggressive rate increases, others predicts the prime rate to move up about 0.75% - 1% in 2022.

If the Bank of Canada overcorrects by increasing rates too much too fast, they can lower the rates again as they have done in the past. As always, you have to consider the entire picture and your risk factors to locking in and being tied to those huge prepayment penalties.

Whether you’re choosing a new mortgage, deciding to lock in your variable rate mortgage, or just looking for a lower interest rate I'm here to help. I can help you compare the numbers for locking in versus a variable term. We can do the math and 'what if scenario' calculations. Book an appointment today, and I help make your decision easier. Call at 778-246-2547 or Book an appointment by clicking HERE

Buyer's Remorse

winonareinsma@gmail.com (Winona Reinsma) — Tue, 26 Apr 2022 19:54:53 GMT

Consequences for not finalizing your real estate purchase.

From our friend's at Zancope Notary Public in Langley, BC. She sent me this great article that contain's important information for buyer's and sellers.

"In the past 15 days I personally dealt with 5 collapsing deals involving buyer’s remorse. For the first time in 6 years, I'm seeing people intentionally backing out and not completing their deals.

My perception is that people who have purchased properties between December and February are feeling that they have paid too much, and they believe that by not completing their purchase, they will only be losing their deposit. This is a myth!

As we know, after a real estate purchase/sale contract has been fully executed with at least $1.00 deposit paid, if one of the parts does not complete, the amount paid for the deposit will have nothing to do with the damages to be paid by the breaching party.

What are the consequences for not finalizing your real estate purchase?

Your deposit will be frozen with the legal representative holding it, until parties reach an agreement or when court determines who gets paid what.
Seller will be responsible to mitigate damages, by re-listing the property and trying to sell ASAP.
Buyer that did not complete, could be responsible for:

All legal fees (their lawyer and seller’s lawyer)
Additional realtor’s fees for the work of re-listing the property and additional commissions paid
Any loss incurred by the seller - difference between the sale price they would have received from original buyer and what they were able to sell it for later.

For example: Original sale happened for $1Million. Buyer did not complete, and sellers listed again, selling for $700k. Original buyer (regardless of their deposit) could be responsible for covering the $300k loss from the sellers + all lawyer’s fees incurred by parties + additional commissions paid for the second sale.

Flavia will be doing a live event with a lawyer specializing in Real Estate litigation on Thursday, April 28th at 9am about this topic.

Residential Market Commentary - Rising rates. What’s next?

winonareinsma@gmail.com (Winona Reinsma) — Thu, 31 Mar 2022 17:56:16 GMT

Experts Are Shining Up Their Crystal Balls.

N ow that the Bank of Canada has started its latest rate raising cycle, market watchers are shining up their crystal balls and looking for clues about what is to come.

What many are seeing is a signal that the central bank is ready to push up its benchmark overnight rate by 50 basis points – half a percentage point – at its next setting on April 13. Earlier this month The Bank launched its tightening program with a quarter-point increase, putting its policy rate at 0.50%.

Analysts expect the BoC will boost the rate at each of its next 6 to 8 settings, bringing it to between 2.00% and 2.50%. The U.S. Federal Reserve has also hinted it is prepared to boost its trendsetting rate with a series of half-point hikes.

In a speech to American bankers, Bank of Canada Deputy Governor Sharon Kozicki cited inflation as a key reason for the interest rate increases.

“The reasons are straightforward: Inflation, in Canada is too high, labour markets are tight and there is considerable momentum in demand,” she said.

Inflation hit 5.7% last month, a 30-year high and nearly triple The Bank’s 2% target. There are also fears the Russian invasion of Ukraine will trigger even higher inflation.

While The Bank says high household indebtedness remains a key vulnerability in Canada, it also points out that those households have increased savings due to government supports and reduced spending during the pandemic. The Bank feels that could provide a cushion against higher interest payments.

Before Interest Rates Increase Again:

There are over 300 mortgage products in the market today. It's complex and time consuming to investigate the best options on your own. With over 20 years experience, I can help you save time and money by finding the best products to suit your individual needs. How do you know you have the best mortgage option unless you check with an independant expert that works in your best interest? Best of all, in most cases my services are free! Call today to get started and get a rate hold in place before the next round of interest rate increases.

Residential Market Commentary - Hot in February, but cooling in the forecast

winonareinsma@gmail.com (Winona Reinsma) — Wed, 23 Mar 2022 03:04:45 GMT

March-ing on, but expect some cooling in April!

I read a distrubing prediction today. The Bank of Canada is not only expected to increase the bank rate in April again, but they may increase rates another five times after that, before the end of 2022!

It would be blamed on the massive inflation combined with major economic winds of war. For mortgage clients, that would mean the banks' prime rate ending the year around 4.2%. For those of you that secured a prime minus 1% variable rate mortgage, your mortgage rate could end the year sitting at a 3.2% interest rate.

Historically, that is not a bad rate at all, however it's a big jump for those of us that have paid dearly in this escalating real estate market. Rising prices mean rising mortgage debt, and every quarter percent increase means another approx. $13.00 per month payment increase, per $100,000.00 mortgage principal for variable mortgages.

For those of you in a very low five-year fixed term your monthly payment won't increase until maturity. So you are safe, as long as you do not break your contract before maturity! Five year fixed rates have been rising as well, and higher rates along with big mortgages, means huge prepayment penalties if you sell or refinance in mid-term.

Here is the February Market Summary:

Canada’s real estate market continued its record setting ways in February. The Canadian Real Estate Association reports the average price of a home hit a new, all time high of $816,720. That is a 20.6% increase from a year earlier, and up 9.1% from January.

With the country’s two hottest and most expensive markets – Toronto and Vancouver – factored out of the calculation the average price drops by $178,000 to $638,720.

CREA prefers calculate costs using its own Home Price Index, which adjusts for the volume and type of homes being sold. But even this measurement is posting record breaking increases. The HPI is up 29.2% over last year and up 3.5% from January.

Some market watchers suggest there has been a surge in demand as buyers try to get in ahead of rising interest rates and expectations of even higher prices. But there are also forecasts that call for an easing of the market as rates rise and more homes go up for sale.

February saw a surge in new listings, up nearly 24% compared to January. That pushed the sales-to-new listings ratio down to 75.3%, after it jumped to 89% in January.

CREA expects to see brisk sales activity though March, as the spring buying season gets underway, and then a potential easing.

“Ideally, listings will continue to come out in big numbers in the months ahead. Combined with higher interest rates and higher prices, we could be at a turning point where price growth begins to slow down and inventories finally begin to recover after seven years of declines,” said Shaun Cathcart, CREA’s Senior Economist.

Let's see what March and April brings. Our Spring market could be significantly less heated if rate continue to rise, with buyers having the upper hand, making purchase offers that include subject clauses once again.

Bank of Canada increases its benchmark interest rate, updates its 2022 outlook

winonareinsma@gmail.com (Winona Reinsma) — Sun, 06 Mar 2022 00:32:12 GMT

Bank of Canada made good on its pled ge to increase rates

Today, in its second scheduled policy decision of 2022, the Bank of Canada made good on its pledge to increase interest rates in the face of higher inflation.

For the first time since the pandemic began to hurt the economy in March 2020, the Bank raised its overnight benchmark rate to 0.50% from 0.25%. As a result, the Bank Rate increases to 0.75% from 0.5% and the knock-on effect is that borrowing costs for Canadians will rise modestly although by historical norms, remain low.

The BoC also announced it is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds on its balance sheet “roughly constant” until such time as it becomes “appropriate” to allow the size of its balance sheet to decline.

In its updated comments on the state of the economy, the Bank and singled out the unprovoked invasion of Ukraine by Russia as a “major new source of uncertainty” that will add to inflation “around the world,” and have negative impacts on confidence that could weigh on global growth.

These are the other highlights.

Canadian economy and the housing market

Economic growth in Canada was very strong in the fourth quarter of 2021 at 6.7%, which is stronger than the Bank’s previous projection and confirms its view that economic slack has been absorbed
Both exports and imports have picked up, consistent with solid global demand
In January 2022, the recovery in Canada’s labour market suffered a setback due to the Omicron variant, with temporary layoffs in service sectors and elevated employee absenteeism, however, the rebound from Omicron now appears to be “well in train”
Household spending is proving resilient and should strengthen further with the lifting of public health restrictions
Housing market activity is “more elevated,” adding further pressure to house prices
First-quarter 2022 growth is “now looking more solid” than previously projected

Canadian inflation and the impact of the invasion of Ukraine

CPI inflation is currently at 5.1%, as the BoC expected in January, and remains well above the Bank’s target range
Price increases have become “more pervasive,” and measures of core inflation have all risen
Poor harvests and higher transportation costs have pushed up food prices
The invasion of Ukraine is putting further upward pressure on prices for both energy and food-related commodities
Inflation is now expected to be higher in the near term than projected in January
Persistently elevated inflation is increasing the risk that longer-run inflation expectations could drift upwards
The Bank will use its monetary policy tools to return inflation to the 2% target and “keep inflation expectations well-anchored”

Global economy

Global economic data has come in broadly in line with projections in the Bank’s January Monetary Policy Report
Economies are emerging from the impact of the Omicron variant of COVID-19 more quickly than expected, although the virus continues to circulate and the possibility of new variants remains a concern
Demand is robust, particularly in the United States
Global supply bottlenecks remain challenging, “although there are indications that some constraints have eased”

Looking ahead

As the economy continues to expand and inflation pressures remain elevated, the Bank’s Governing Council made a clear point of telling Canadians to expect interest rates to rise further.

The Governing Council also announced it will consider when to end its “reinvestment phase and allow its holdings of Government of Canada bonds to begin to shrink.”

The resulting quantitative tightening (which central bankers framed as “QT” rather than the previous term “QE” for quantitative easing) would complement increases in the Bank’s policy-setting interest rate. The timing and pace of further increases in the policy rate, and the start of QT, will be guided by the Bank’s ongoing assessment of the economy and its commitment to achieving a 2% inflation target.

BoC’s next scheduled policy announcement is April 13, 2022.

Residential Mortgage Review

winonareinsma@gmail.com (Winona Reinsma) — Tue, 15 Feb 2022 19:52:41 GMT

Low inventories, higher prices and higher interest rates?

Looking back on 2021 Canada’s realtors saw a very unsettled year. Looking ahead to 2022 they see some calm returning. And Canada’s housing agency draws attention to grow ing mortgage debt and increasing debt loads.

Market Volatility

The Canadian Real Estate Association’s sales figures experienced some wild swings through the year hitting a seasonally-adjusted, annualized high of 807,250 in March and plunging to a low of 585,250 in August. The year ended with a total of 666,995 residential properties trading hands, just slightly below CREA’s forecast of 668,000.

The national average price for a home closed out 2021 at $713,500 which is well above the association’s forecast of $687,500. Canada Mortgage and Housing Corporation reports that total mortgage debt ballooned to $1.77 trillion in the 3rd quarter.

More Debt, Heavier Debt Load

There have been concerns expressed that the level of price growth in Canadian real estate is not supported by economic fundaments, is not sustainable and, therefore, the market is at risk of a collapse. However, CMHC’s research indicates that risk is not serious, yet.

The federal housing agency reports that mortgage arrears (those with payments that are more than 90 days overdue) have actually declined. But CMHC also says that Total Debt Service levels are rising, particularly in uninsured mortgages. Among these mortgages, more than a quarter had a TDS ratio of more than 40%.

On the flip side of that, the share of uninsured new mortgages with a TDS ratio of 40% or less has been on a downward trend for the past year-and-a-half, resulting in more leveraged borrowers. CMHC says that trend could become troubling if it continues.

Tight Supply. High Demand

The real estate association points to tight supply as the main reason for the volatility and price increases. Sales growth has consistently outpaced new listings and inventories have been persistently low.

CREA points out that the number of months of inventory has dropped below 2 months just 5 times in its history and all of them were in 2021. December registered the all-time low of 1.6 months. The long term average for inventories is 5 months. CREA expects that the low supply of homes for sale will continue through 2022.

The Realtors also expect demand will remain strong this year. It is a trend that started before the pandemic and there are no signs it has changed. As pandemic restrictions are relaxed and immigration levels return to normal, demand and price pressures will increase.

Moderation May Be Coming

The association does not expect to see prices continuing to rise at their current rate though. Prices jumped by more than 20% in 2021. CREA is forecasting a more modest increase of 7.6% for this year.

Rising interest rates would be a key reason for price moderation. The Bank of Canada has made it clear rates will be going up sooner rather than later. That will have a direct effect on variable rate mortgages. Fixed rate mortgages have already been experiencing increases due to the behavior of the bond market in a “rising rate” environment.

Another factor that could help hold prices in check is the mortgage stress test. It is due for a re-evaluation this year. If it remains at its current rate of 5.25% it will continue to limit the borrowing power of young and first-time buyers.

Low inventories, higher prices and higher interest rates have CREA forecasting a 6.8% decline in sales for 2022 and a long-term trend bac k toward more normal market activity.

Bank Of Canada - Where to From Here?

winonareinsma@gmail.com (Winona Reinsma) — Fri, 11 Feb 2022 01:28:14 GMT

After January's hype, are consumers prepared?

The Bank of Canada has, once again, held its trendsetting interest rate 0.25%. But it has stepped off the sidelines.

Expectations of a rate hike were high heading into t he January 26thannouncement. Calls for an increase have been loud as inflation has jumped to generationally high levels. Business and consumers are pushing for action to bring it back under control.

The Bank, however, appears to have opted for a compromise. It is holding the rate at its record low while the rhetoric has been given a sharp increase. Bank of Canada Governor Tiff Macklem has made his most direct statement, yet, on the matter.

“Canadians can be assured that we will use our monetary policy tools to control inflation,” Macklem said during the January announcement. “Canadians should expect a rising path for interest rates.”

Well known bank economist Benjamin Tal calls it a “PR story.”

“There are two opposing forces: one is that you want to maintain the credibility of the Bank of Canada,” Tal said in an interview with Mortgage Broker News. “At the same time, you don’t want to be seen as insensitive to the suffering of people during the Omicron wave. So, what do you do? You basically raise rates without raising rates.”

Popular American financial expert John Mauldin has called this tactic, “talk tough and drag your feet.”

COVID-19 remains the key variable in the BoC’s planning, but it now appears increasingly likely the Bank will pick up its feet and step off the sidelines with a rate hike in its next announcement on March 2nd.

What Renters Think

winonareinsma@gmail.com (Winona Reinsma) — Wed, 09 Feb 2022 22:24:36 GMT

Investor alert: Survey provides valuable insights.

With the Vancouver and Fraser Valley markets exploding, keeping an eye on market trends is helpful for all potential buyers. One significant trend is the percentage of investors purchasing properties as compared to owner occupied sales. As much as 20% of sales were attributed to developers/investors in 2021.

With rents skyrocking in our area, it can be lucrative to collect rent on a property purchase while you wait for development permits. With the huge property value increases we have seen over the last year, some buyers might see real estate as the best place to park their money. Adding real estate to an investment portfolio is as popular as ever.

Here are clues and insight to what renters are thinking:

A new, informal survey offers some interesting insights into renters and their desire to become homeowners.

The Globe and Mail polled readers of a newsletter written by financial columnist Rob Carrick. More than 5,200 people responded. It is not a scientific study but, rather, a snapshot of what is on the minds of renters across the country.

It needs to be noted that the vast majority of the respondents live in either Toronto or Vancouver. These metropolitan areas account for about a quarter of Canada’s total population. They are also the two most expensive markets in the country.

Somewhat surprisingly the survey suggests that the largest group of renters, by far, is made up of people between the ages of 30 and 39. They came in at almost double the next biggest cohort: 40 to 49 year-olds. Twenty-somethings, who have long been considered the bedrock of the renting population, sit in 3rd spot just ahead of those aged 60 and over.

One thought has it that the younger group may be staying home with mom and dad because the cost of renting has become prohibitive. Rents have moved up, pretty much, in lock-step with the cost of buying. About 20% of respondents say they are paying more than half of their income in rent. That is well above the guideline that rent should not exceed 30% of gross income.

Coincidentally, 22% of respondents say they dislike or hate being renters. A similar portion say they like or love renting. More than half say renting has some positives, but they would rather own. Nearly a third feel they are being negatively “judged” for being renters.

Despite that, nearly two-thirds of those surveyed expect to rent forever because they will never be able to afford to own. Just 11% say they have made the choice to rent rather than buy.

If you are planning to purchase a property this year, whether for investment purpose or a new home, it would be prudent to prepare well ahead. Start preparations as soon as possible. Book a consultation today for documentation preparation, rate holds, and pre-qualifying. It will make a world of difference when you are out there shopping for real estate!

Bank Of Canada January 26th, 2022 - "Not Yet!"

winonareinsma@gmail.com (Winona Reinsma) — Thu, 27 Jan 2022 21:09:13 GMT

Interest Rates Will Rise, But Not Yet!

While 80% of the market was counting on a rate hike yesterday, the Bank of Canada remained hawkish. The summary below provides a lot of the financial details, if you are interested. Otherwise, read the beginning and then jump down to the 'Looking Ahead for vital information if you are watching interest rates.'

The next scheduled Bank of Canada (BOC) announcement is set for March 2nd. Going into February, watch the current 5 years fixed mortgage terms. Many lenders increased their rates in anticipation of an increase yesterday, so can we see a slight paring back in February? Don't expect any dramatic drops, but maybe we will be lucky to see .1% or .2% drop. It's hard to say, but if you are contemplating going into a 5 year fixed, it would be worth checking rates regularly in February.

The good news is that CIBC and First National economists are more conservative in their overall estimations of total interest rate increases. They expect 3 increases this year (.75%) and maybe 3 next year. Most experts do not agree with Scotiabank's estimation of 8 increases by 2023 which equals to 2% increase.

A BOC first increase of .25% won't overly impact the market. However, once it goes over .36% or two quarter increases, buyers will see lenders trim back their capacity. This is because qualifications are based on a 5.25% stress test or 2% over contract rate (or 5 years fixed rate).

This may start cooling off this overly hot real estate market in the Fraser Valley and Vancouver. A good thing for buyers coping with multiple bids and rising property prices.

Bottom Line: We are in unprecedented times in recent history, trying to come out of a pandemic and now fighting inflation. Experts are all over the map with their predictions, so consumers need to base their decisions on facts and their financial situation. The BOC will raise interest rates, but no one really know how much in total. It will all depend on the net effect on inflation, real estate prices and a host of other factors. Only time will tell!

Here's the full summary:

Bank of Canada holds benchmark interest rate steady, updates 2022 economic outlook

This morning in its first scheduled policy decision of 2022, the Bank of Canada left its target overnight benchmark rate unchanged at what it describes as its “lower bound” of 0.25%. As a result, the Bank Rate stays at 0.5% and the knock-on effect is that borrowing costs for Canadians will remain low for the time being.

The Bank also updated its observations on the state of the economy, both in Canada and globally, leaving a strong impression that rates will rise this year.

More specifically, the Bank said that its Governing Council has decided to end its extraordinary commitment to hold its policy rate at the effective lower bound and that looking ahead, it expects “… interest rates will need to increase, with the timing and pace of those increases guided by the Bank’s commitment to achieving” its 2% inflation target.

These are the other highlights of today’s BoC announcement.

Canadian economy

The economy entered 2022 with considerable momentum, and a broad set of measures are now indicating that economic slack is absorbed
With strong employment growth, the labour market has tightened significantly with elevated job vacancies, strong hiring intentions, and a pick up in wage gains
Elevated housing market activity continues to put upward pressure on house prices
Omicron is “weighing on activity in the first quarter” and while its economic impact will depend on how quickly this wave passes, the impact is expected to be less severe than previous waves
Economic growth is then expected to bounce back and remain robust over the Bank’s “projection horizon,” led by consumer spending on services, and supported by strength in exports and business investment
After GDP growth of 4.5% in 2021, the Bank expects Canada’s economy to grow by 4% in 2022 and about 3.5% in 2023

Canadian inflation

CPI inflation remains “well above” the Bank’s target range and core measures of inflation have edged up since October
Persistent supply constraints are feeding through to a broader range of goods prices and, combined with higher food and energy prices, are expected to keep CPI inflation close to 5% in the first half of 2022
As supply shortages diminish, inflation is expected to decline “reasonably quickly” to about 3% by the end of 2022 and then “gradually ease” towards the Bank’s target over the projection period
Near-term inflation expectations have moved up, but longer-run expectations remain anchored on the 2% target
The Bank will use its monetary policy tools to ensure that higher near-term inflation expectations do not become embedded in ongoing inflation

Global economy

The recovery is strong but uneven with the US economy “growing robustly” while growth in some other regions appears more moderate, especially in China due to current weakness in its property sector
Strong global demand for goods combined with supply bottlenecks that hinder production and transportation are pushing up inflation in most regions
Oil prices have rebounded to well above pre-pandemic levels following a decline at the onset of the Omicron variant of COVID-19
Financial conditions remain broadly accommodative but have tightened with growing expectations that monetary policy will normalize sooner than was anticipated, and with rising geopolitical tensions
Overall, the Bank projects global GDP growth to moderate from 6.75% in 2021 to about 3.5% in 2022 and 2023

January Monetary Policy Report

The key messages found in the BoC’s Monetary Policy Report published today were consistent with the highlights noted above:

A wide range of measures and indicators suggest that economic slack is now absorbed and estimates of the output gap are consistent with this evidence
Public health measures and widespread worker absences related to the Omicron variant are slowing economic activity in the first quarter of 2022, but the economic impact is expected to be less severe than previous waves
The impacts from global and domestic supply disruptions are currently exerting upward pressure on prices
Inflationary pressures from strong demand, supply shortages and high energy prices should subside during the year
Over the medium term, increased productivity is expected to boost supply growth, and demand growth is projected to moderate with inflation expected to decline gradually through 2023 and 2024 to close to 2%
The Bank views the risks around this inflation outlook as roughly balanced, however, with inflation above the top of the Bank’s inflation-control range and expected to stay there for some time, the upside risks are of greater concern

Looking ahead

The Bank intends to keep its holdings of Government of Canada bonds on its balance sheet roughly constant “at least until” it begins to raise its policy interest rate. At that time, the BoC’s Governing Council will consider exiting what it calls its “reinvestment phase” and reducing the size of its balance sheet. It will do so by allowing the roll-off of maturing Government of Canada bonds.

While the Bank acknowledges that COVID-19 continues to affect economic activity unevenly across sectors, the Governing Council believes that overall slack in the economy is now absorbed, “thus satisfying the condition outlined in the Bank’s forward guidance on its policy interest rate” and setting the stage for increases in 2022.

Payment Optional Mortgages - Reverse Mortgage Benefits

winonareinsma@gmail.com (Winona Reinsma) — Wed, 26 Jan 2022 01:04:17 GMT

Reverse Mortgage Options Can Be a Life-Style Saver!

If you’re a homeowner over the age of 55 and want to tap into your home equity, a reverse mortgage can be the right solution for you.

A reverse mortgage is also known as an “equity release”. With a reverse mortgage, you can access up to 55% of the equity in your home tax-free as a lump sum or monthly cash deposits. The maximum amount you are able to borrow will depend on your age, your home’s appraised value, and our lender.

Mortgage payments are not required and you maintain ownership of your home. Repayment of the loan and interest is only required once you move or sell the home.

At the end of your loan term, you may have less equity in your home. If you don’t make any payments, which is fine, you may have a larger interest payment to make when the home is sold.

A lender will often ask you to consult a lawyer prior to giving you a reverse mortgage to ensure you understand the conditions of the mortgage. The lender can never force you to sell your home to repay the reverse mortgage. This is a significant benefit, reverse mortgages are not callable!

It is also important to note that all existing loans on the property, including a mortgage or a home equity line of credit must be paid off prior to getting the mortgage, or from the proceeds of the reverse mortgage.

Whether you’re looking for a financial cushion to live comfortably, funds to cover monthly expenses, pay off debt, renovate or fund your children’s education, you can use the funds from a reverse mortgage in any way you want without restrictions!

What’s more, is if the home goes up in value, it doesn’t affect the reverse mortgage, meaning that all equity gained is yours!

Lastly, you can get out of a reverse mortgage by paying off the loan and any interest accrued. Prepayment penalty may apply, but generally they are more favourable than a regular mortgage, especially after 3 years into the term.

You can also make an interest payments each year on the anniversary date, so you can control your cash flow and make a payment if you wish. Payments are optional, not required, so you have more control over your cashflow.

Book a complementary consultation to find out if a reverse mortgage is the right solution for you.

Will Interest Rates Go Up in 2022?

winonareinsma@gmail.com (Winona Reinsma) — Thu, 13 Jan 2022 01:40:11 GMT

Just how High Can It Go?

Fixed mortgage rates have increased between .50% to .60% over the short term. This is due to the Bank of Canada ending quantitative easing (QE). QE was a stimulus program that introduced at the start of the pandemic to pump money into the economy. What it also did was lower the bond prices and by extension the fixed mortgage rates. When they stopped QE, bond market yields went up which in turn raised the fixed mortgage rates.

The Bank of Canada acted to calm the fears of the market. With signs of the economy recovering, we in turn run the risk of inflation getting out of control. But some experts think it's too early to assume we are in full recovery.

Scotiabank predicted eight quarter-point interest rate hikes (or 2%) by the end of 2023. That made huge headlines, and likely they saw a large number of clients locking in. Analyst, Ben Rabidoux, says that the fear of rate hikes is overblown, and that eight hikes is a “pipe dream.” The other Canadian big banks expect only between one and three rate hikes by the end of 2023.

Take a look at the above interest rate graph. The light grey lines show the "expert" predictions and the red line shows the actual increases. Predictions were much more aggressive than what actually happened. We likely will see a very similar outcome, considering that Canadians are risk-sensitive.

Bank of Canada's interest rate increases would impact all variable mortgage rates. The result is that your variable rate mortgage monthly payment will increase. Every 0.25% increase would equal about $13 per month for every $100K owing on your mortgage. A $500K mortgage would increase by approximately $65/month. (Check your MOPOLO mobile app to get exact numbers for your mortgage).

Locking into a fixed rate is a personal decision and should based on more than predictions. Today's variable rates still offer attractive discounts. They also feature much lower prepayment penalties than fixed rates do. By choosing a mortgage based on the interest rate alone, you could end up paying far more than you bargined for. To save money over the life of your mortgage you have to look at the features and benefits.

As for a rate increases in 2022, we will have to see what actually happens. Our dynamic market changes almost daily making it more difficult to decide what to do. Yet, even if the prime rate go up another .25% or .50%, a variable term is still a great option with today's large discount.

The best advice I can give is to work with an independent mortgage expert. We can provide options you may not be aware of, so that you can make the right decision for your circumstances. Furthermore, we can help you make a plan for what you will do if rates go up quickly. Know your numbers and where your line in the sand will be to lock in a variable rate into a fixed term, if you need to. This decision should never be a knee jerk reaction, but thought out in advance so you can sleep through all the media noise.

Book a consultation here if you need help with your mortgage.

It's A Great Time To Buy Based On Bank Of Canada's Announcement!

winonareinsma@gmail.com (Winona Reinsma) — Wed, 14 Jul 2021 20:47:13 GMT

Great News for Buyers and Long Term Investing!

In a widely anticipated announcement, the Bank of Canada published its quarterly Monetary Policy Report today containing updated economic growth and inflation projections and made its fifth interest rate decision of the year.

The interest rate announcement was a non-event: The Bank of Canada left its target overnight benchmark rate unchanged at 0.25%. As a result, the Bank Rate stays at 0.5%.

But beyond these headline numbers, the Bank made several key observations and noted that it is modifying its bond buying activity. Check out the BoC's summary below.

Canadian economic conditions:

GDP growth for 2021 is now projected at 6% – a little slower than the Bank’s outlook in April – but has revised upward its 2022 forecast to 4.25% and projects 3.25% growth in 2023
Higher projected domestic demand in 2022 and 2023 is expected to reflect household spending (the Bank assumes households will spend 20% of the extra savings they have accumulated during the pandemic) as well as improved business confidence and investment.
Consumption is expected to lead the rebound with increases in spending on transportation, recreation, and food and accommodation services.
The economic recovery is expected to become more broad-based and self-sustaining over the Bank’s projection horizon
Housing market activity is projected to “ease back from historical highs”
Stronger international demand should underpin “a solid recovery in exports”
The pace of recovery will vary among industries and workers and it could take some time to hire workers with the right skills to fill jobs

Inflation:

CPI inflation was 3.6% in May reflecting “temporary factors” including the comparison to last year’s depressed economic output – referred to as “base year effects” – stronger gasoline prices and “pandemic-related bottlenecks” as economies reopen
Core measures of inflation have also risen but by less than the CPI
Inflation is likely to remain about 3% through the second half of 2021 but “ease back” toward 2% in 2022 as short-run imbalances diminish and overall slack in the economy pulls inflation lower

Global conditions:

Global GDP growth is expected to reach 7% this year and then moderate to around 4.5% in 2022 and just over 3% in 2023 – this is slightly stronger than the forecast the Bank included in its April 2021 Monetary Policy Report owing to the outlook for the US economy
The recovery from the COVID-19 pandemic reflects continued vaccination progress particularly in advanced economies – however, the Bank still notes the recovery is “highly uneven” and the recent spreads of new COVID-19 variants is “a growing concern”

Quantitative easing – bond buying begins to taper

The Bank reiterated that it would continue its Quantitative Easing program to keep interest rates low across the yield curve but that it would reduce its weekly bond buying program to $2 billion per week from the previous $3 billion, an adjustment it said “reflects continued progress towards recovery and the Bank’s increased confidence in the strength of the Canadian economic outlook.”

The Bank said that future decisions on the pace of net bond purchases will be guided by its ongoing assessment of the strength and durability of the recovery. However, it pledged to continue to provide “the appropriate degree of monetary policy stimulus” to support the recovery and achieve its inflation objective.

Looking forward:

The Bank’s Governing Council believes that the Canadian economy still has considerable excess capacity. Accordingly, it intends to hold its policy interest rate at the effective lower bound and will do so until economic slack is absorbed so that its 2% inflation target is “sustainably achieved.”

A good time to borrow!

With the benchmark rate unchanged, and the economic recovery expected to gather steam, conditions remain favourable for all types of property financings. For borrowers, a key consideration is how long these low interest rates will last. No one, not even the Governor of the Bank of Canada, knows for sure, so it pays to act with a long-term strategy in mind.

The BoC’s next scheduled policy announcement is September 8, 2021.

Get a Mortgage in YOUR best interest!

If you are looking to purchase a new property or refinance an existing one, call me today at 778.246.2547. The key is preparation, and selecting the lender that will give you the best mortgage for your situation!

How do you know if your Banker is really the best if you don't check the entire market? How do you know what you will really pay if you don't check the fine print? There are many hidden details that can save you thousands of dollars if only you know what to look for. I'm here to help you navigate the market and make the best lender decision for your family. Best of all, in 99% of cases, my services are entirely free!

Call 778.246.2547 to set up a consultation.

Stress Test Targets Conventional Mortgages

winonareinsma@gmail.com (Winona Reinsma) — Fri, 21 May 2021 22:25:09 GMT

"But I have lots of equity! Why doesn't that count?"

Canada's banking watchdog is confirming tighter rules to the mortgage stress test, effective June 01st. This proposed change will now effect all borrowers. Originally it was announced that it would target conventional mortgages, but now the rule will apply to insured and first time home buyers as well.

In a release Thursday, the Office of the Superintendent of Financial Institutions said, "the new qualifying rate for an uninsured mortgage – where borrowers have at least a 20% down payment – will rise to either the mortgage contract rate plus 200 basis points or 5.25%, whichever is higher."

Currently, the stress test sits at 4.79%.

The decision to impose the more stringent conditions is to dampen the financial risks in our housing sector. It's intended to protect against foreclosures should interest rates suddenly rise fast and far.

"In a complicated and sometimes volatile housing market, the need for sound mortgage underwriting cannot be underestimated," OSFI Assistant Superintendent of Regulation Ben Gully said.

"The rate in place as of June 01st, 2021 will help support financial resilience should economic circumstances change, while our commitment to review the qualifying rate at least annually will contribute to continued confidence in the Canadian financial system."

As part of the new framework, OSFI announced it would launch a process to review the qualifying rate at least once a year in December. OSFI said that timing would allow it to adjust regulatory conditions well ahead of the busy spring selling season.

For clients, this means that lenders will be calculating your mortgage eligibility at a monthly mortgage payment of $552.00 per $100,000.00 mortgage funds. Today's average five-year fixed-term contract rate works out to a mortgage payment of only $374.00 per $100,000.00. That's a large margin of safety and means that accessing conventional mortgage funds will be shaved by approximately 4% - 4.5% at the new stress-test rate.

For example, a client purchasing a $550,000 property with a 20% down payment will see an approximate decrease of $20,000 in their borrowing power next month. So, the bottom line is that access to cheap mortgage funds will be further restricted.

If you have a large downpayment or 35% or more equity in your home, that doesn't change this cutback. You have to have the eligible income to support your mortgage using the new 5.25% interest rate. There are other options for clients needing higher mortgage amounts, but they come with higher interest rates and additional costs.

If you need higher funding for your conventional mortgage, give me a call to explore your options. They are out there, but you won't get them from your bank.

Bank of Canada Interest Rate Outlook For April 4, 2021

winonareinsma@gmail.com (Winona Reinsma) — Wed, 21 Apr 2021 22:51:00 GMT

Important News For Variable Mortgage Holders

Variable rate mortgages are more popular today as they offer a significant discount as compared to today's fixed term rates. Tracking Bank of Canada announcements are an easy way to gauge the potential for prime rate increases. Here are the details, forecast and highlights of today's announcement.

This morning, in its third announcement of 2021, the Bank of Canada left its target overnight benchmark rate unchanged at 0.25%. As a result, the Bank Rate stays at 0.5%. It also issued its quarterly Monetary Policy Report – a must read for those who follow the Bank’s inflation and growth projections.

The biggest news coming from today’s announcement is the Bank updated its thinking on the timing of future interest rate policy movements. For much of the past year, it signaled that policy interest rates would stay at the Bank’s effective “lower bound” until its inflation targets were met – which it did not expect to happen until 2023. It now expects this to occur “sometime in the second half of 2022.” (See “Looking Forward”)

Prior to the announcement, speculation amped up that the Bank would taper asset purchases that have been the central feature of monetary policy since the pandemic began last year. This speculation was correct. The Bank announced that effective April 28, 2021 “weekly net purchases of Government of Canada bonds will be adjusted to a target of $3 billion” reflecting “the progress made in the economic recovery.” Previously, the Bank’s quantitative easing (QE) program involved the weekly purchase of “at least $4 billion” of bonds.

The Monetary Policy Report noted in particular that the overall Canadian outlook has been revised upward since January. The Bank also commented specifically on Canadian housing construction. Here is a summary:

Canadian economic conditions

The Bank now forecasts real GDP growth of 6.50% in 2021, moderating to around 3.75% in 2022 and 3.25% in 2023

Growth in the first quarter of 2021 appears to have been “considerably stronger than the Bank’s January forecast,” as households and companies adapted to the second wave and associated restrictions

Substantial job gains in February and March boosted employment, however new lockdowns will pose another setback “and the labour market remains difficult for many Canadians, especially low-wage workers, young people and women”

As vaccines roll out and the economy reopens, “consumption is expected to rebound strongly in the second half of this year and remain robust over the projection period”

Strong growth in foreign demand and higher commodity prices are expected to drive a robust recovery in exports and business investment Canadian Housing

Housing construction and resales “are at historic highs, driven by the desire for more living space, low mortgage rates, and limited supply”

The Bank will “continue to monitor the potential risks associated with the rapid rise in house prices”

Global conditions

Global economic growth is “stronger than was forecast” in the Bank’s January 2021 Monetary Policy Report “although the pace varies considerably across countries”

After a contraction of 2.5%, the Bank now projects global GDP to grow by just over 6.75% in 2021, about 4% in 2022, and almost 3.50% in 2023

The recovery in the United States “has been particularly strong, owing to fiscal stimulus and rapid vaccine rollouts”

The global recovery has lifted commodity prices, including oil, contributing to the strength of the Canadian dollar

Inflation

Over the next few months, the Bank believes inflation will rise temporarily to around the top of its 1-3% “inflation-control range.” However, it attributes this to the fact that prices of some goods and services fell sharply last year and since December, gasoline prices have risen above their pre-pandemic levels.

The Bank therefore expects CPI inflation to “ease back toward 2% over the second half of 2021” as these base-year (2020) effects diminish. Inflation is also expected to ease further because of what the Bank calls the ongoing drag of excess capacity. As slack is absorbed, inflation should return to 2% on a sustained basis “some time in the second half of 2022.”

Looking forward

Even as economic prospects improve, the Bank’s Governing Council believes there is still considerable excess capacity in Canada, and that the economic recovery “continues to require extraordinary monetary policy support.”

Accordingly, it reaffirmed its commitment to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that its 2% inflation target is sustainably achieved. Based on the Bank’s latest projection, this is now expected to happen “some time” in the second half of 2022.

In the meantime, the Bank says it will continue its QE program to keep interest rates low across the yield curve.

The bottom line

Although the Bank’s Monetary Policy Report admits that achieving full recovery will take time, and the impacts of the pandemic remain uneven, its assessment of the strength and durability of the recovery has changed for the better and will continue to evolve this spring depending on the course of COVID-19.

Are You on Track with your Financial New Year’s Resolutions

winonareinsma@gmail.com (Winona Reinsma) — Tue, 02 Mar 2021 23:00:57 GMT

Small steps lead to big results by the end of the year!

According to an Ipsos survey, 80% of Canadians give up on their new year’s resolutions before the year is over, with the majority throwing in the towel before the end of February. Therefore, now may be a good time to check in to see how you are getting on with the financial goals they set in January. If you find that you have already given up, it may be time for a new approach.

So, let’s look at some tactics to help you get back on track.

Set specific, measurable goals:

Many of us start the year with well-intentioned but vague financial goals. These could be things like “save more”, “spend less”, or “pay down debt”. These goals are more likely to fail because they don’t make clear the specific actions you need to take in order to achieve them. So, if you have given yourself vague goals for 2021, change them to something more specific like “save $50 a week” or “only spend $150 a week”.

Make them achievable:

Many of us start the year full of enthusiasm and make our financial resolutions too ambitious.

Perhaps you intended to save $200 a week but haven't managed to do so. At this point, many people get discouraged and give up entirely. If you are in this situation, figure out what you can afford. Even if this is just $25 a week, it’s a start. And more importantly, it’ll get you into the habit of saving and put yourself in a great position to increase that amount when you can afford to.

The same can be said if you have a lot of debts to pay off. To someone with multiple credit cards and loans, getting out of debt can seem unachievable. So, rather than looking at your debt as a whole, focus on paying off the highest rate loan first. The sense of achievement gained from having one less debt will give you the boost needed to start tackling the next one. These little achievements along the way will keep you motivated to carry on.

Automate as much as possible:

It’s harder for temptation to disrupt your financial goals when those goals are taken out of your hands.

So, if you aim to save or invest a certain amount each month, set up a direct debit into your investment or savings account at the beginning of each month. This way you are less likely to accidently spend it or forget to invest.

On the other hand, if your problem is overspending, open a separate spending account and set up a direct debit with a set allowance for the week. Since the rest of their money will be out of sight (and hopefully out of mind!), you will be less likely to slip up and overspend.

Don’t let a slip up become a failure:

Many of us slip up on the road to achieving our goals – perhaps you overspent one week, forgets to put money into savings, or buys something new on your credit card. The issue isn’t the slip-up itself; it’s letting this become the new habit. Remind yourself not to miss a beat, dust yourself off, and start again.

Look at new strategies:

If in spite of efforts to save more and spend less, even people 55+ are facing monthly shortfalls, it may be the right time to refinance or even look at alternatives like reverse mortgages.

This can form a sensible part of a structured financial plan and can help you stick to their 2021 financial resolutions.

Oftentimes, a lot of emphasis is placed on making big changes at the beginning of the year. However, meaningful and lasting financial change is much less glamorous. Start by implementing small, achievable habits, and you are much more likely to see that big change by the end of the year.

Market Update

winonareinsma@gmail.com (Winona Reinsma) — Wed, 14 Oct 2020 01:55:41 GMT

Caution and Patience is Needed

The number one question on most of my client's minds revolves around interest rates and real estate prices. We are certainly dealing with unusual circumstances in an unprecedented market.

For the most part, most experts agree that low-interest rates will continue for the short and medium-term. As for real estate prices, especially in the Vancouver and the Fraser Valley regions, well, that depends entirely on who you listen to. CMHC continues to prescribe to the negative mantra that there will be declines in housing prices in our future, maybe as early as next year. However, we are experiencing a surprising uptrend right now that no one foresaw, and CMHC certainly didn't predict.

The real estate market numbers in our market for August and September have been blowing all expectations. Single-family homes in the Fraser Valley are enjoying multiple bids, and even selling over asking price. Today, I received confirmation that one listing just received 17 competing offers! Think about that! This is great for the seller, but it is extremely challenging for the potential buyers and their realtors.

The following update from one of my lender partners that sums up our current market:

"The latest employment numbers, coupled with the September reports from the Toronto and Vancouver real estate boards, have triggered a lot of optimism about Canada's economic recovery and the state of the housing market.

Statistics Canada reports the economy added 378,000 jobs in September, and the unemployment rate dropped to 9%. Toronto realtors posted a record-breaking 11,083 sales last month, up 42% from a year earlier. The benchmark price rose 14%, y-o-y. Vancouver had its best September ever: 3,643 sales, up more than 56% y-o-y. The benchmark price rose by nearly 6%.

These numbers continue to defy expectations, so caution and patience need to be the guiding principles as we try to figure out what will happen next.

The employment numbers – which are a key indicator of economic health – surely were boosted with the reopening of schools. Parents who had been staying home to look after their kids became available for work again. But many are not back to full employment. The number of mothers working less than half their usual hours was 70% higher last month than before the shutdowns. For working-fathers, the number is 23% higher. Overall, employment is still 25% lower than it was before the pandemic. And many of those jobs will not be coming back.

Further job growth remains in jeopardy as the two biggest jurisdictions in the country, Ontario and Quebec, re-introduce closures and restrictions to slow the spread of COVID-19.

At the same time, signals from the housing sector are mixed. Realtors continue to forecast rising sales and prices. But the market is imbalanced. Most of the gains are coming in "ground-oriented" units – singles, semis and townhouses. Condos are seeing significantly smaller increases.

Canada Mortgage and Housing Corporation continues to forecast that price declines, in the 10% area, will start showing up sometime around the middle of next year. Moody's Analytics predicts a national "peak-to-trough" price decline of 7%. Both reports cite employment shortfalls, reduced immigration and increasing loan delinquencies."

If you need a preapproval for mortgage financing before you make an offer, or want to take advantage of these historic low-interest rates, call 778-246-2547. I'm here to help you make an informed decision that is right for you and your family. In most cases, my services are totally free, and you can rest easy that your next move is right!

Update on Mortgage Deferment and Key Points for Business Owners

winonareinsma@gmail.com (Winona Reinsma) — Tue, 07 Apr 2020 21:25:40 GMT

Support for Business Owners and Watch for Processing Errors

Update on Mortgage Payment Deferrals:

It is imperative to understand that Lender's computer systems have not been programmed to handle this unprecedented crisis, nor do they have the staff in place to handle the overwhelming volume of calls and emails they are receiving due to the Covid-19 crisis.

It shouldn't be a surprise to hear that processing errors will likely happen, as much of this time-sensitive work is being completed manually. If you discover an error, contact your Lender to have the situation corrected. Stay calm, be nice, and be patient as you are speaking to a fellow human being who is trying to cope like the rest of us.

Here are the key points of the updates I have received since the launch of the mortgage deferral option:

If you called right at the beginning and were denied: Call them back again if you have a valid situation (affected by Covid-19). Many lenders have revised or clarified their criteria since first launching the deferral process.
If you have been granted a mortgage payment deferral:

Watch your account around your mortgage payment due date.
If you see an NSF charge on your account: contact your Lender. They can and will rectify this.
If you see a mortgage payment deducted from your account after the deferment was granted: contact your Lender. They can correct this if you call right away.
Watch your credit history to ensure there are no slip-ups in reporting to credit reporting agencies: You can download my client's MOPOLO app here , to check your credit score without it impacting your credit history. Just put my name, Winona Reinsma, in the Broker section, and you can check your credit as often as you want).

Support for Business Owners: Below are some key updates from CPA Canada

Income Tax Extensions

Filing of T2s due after March 18th, 2020 has been extended to June 1st, 2020.

Filing of T1s also extended to June 1,2020

There are no extensions to self-employed individuals – due date for these T1 returns remains June 15th, 2020

Payments on T1 and T2 (Partial only) including instalments extended to September 1st, 2020

No extension on payments of source deductions, presumably as a) 10% credit has been provided b) 75% wage subsidy available to eligible companies

GST

No extension provided for filing returns although no penalties and/or interest on these until after June 30th, 2020.

Remittances on GST due after March 27th, 2020 now extended to June 30th, 2020.

Temporary Wages Subsidy (TWS)

10% reduction on source deductions for the period March 18/20 to June 19th, 2020 is available to Canadian Controlled Private Corporations (CCPC) with a taxable capital not exceeding $15M.

This reduction cannot be used to decrease the employer & employee portions of EI and CPP. This would imply that only the income tax portion can be reduced.

The max per employee is $1,375, while the employer max is $25,000.

Canada Emergency Wage Subsidy (CEWS)

This subsidy is still being worked out but this is what we know so far:

The company must show a 30% decrease or more in revenue, when compared to the same period last year for the months of March, April and May.

The monthly periods would start March 15th to April 11th, 2020. (So it would seem to be imperative at this point to capture the exact date of the transaction.)

Application is on a monthly basis thru My Business Account (CRA website) or an app which has yet to be released.

Benefit is equal to 75% of basic remuneration paid to a max per employee of $847/week and will be paid to the employer. It has been indicated that basic remuneration excludes any salary increase during this period of time.

Any claim under CEWS must be reduced by the TWS subsidy.

Please note – this may take several weeks to implement.

Canada Emergency Response Benefit (CERB)

$2,000 per month up to 4 months

Application online through My Account or using the automated phone line starting April 6th, 2020.

Check the CERB Website

It is highly recommended that you sign up for direct deposit, if you have not already done so.

You can apply for the CERB online through your My CRA account, or over the phone. Starting April 6, the government is recommending that people stagger their application by birth month in order to avoid overwhelming the system.

* January, February, March: April 6, Mondays after that

* April, May, June: April 7, Tuesdays after that

* July, August, September: April 8, Wednesdays after that

* October, November, December: April 9, Thursdays after that

* People with any birth month can apply Fridays, Saturdays and Sundays.

CERB vs CEWS:

An individual cannot be earning employment or self employment income if applying for CERB.

This would imply it may be best for an employer to have some employees working and some either on EI or on CERB.

Owner/Managers

The Finance Dept has been made aware that a number of owner/managers are remunerated via dividends.

Discussion was held on April 3rd regarding this topic.

Stay tuned for more info.

Please also remember the BC government has subsidies for individuals, i.e. namely BC Emergency Benefit which is a one time $1,000 and also rent subsidy. More information will be coming out on how these will be administered.

As policies and support guidelines are updated or expanded on a daily basis, keep checking for the latest information on government websites.

Understanding the Risks of Open Variable HELOCs and Line of Credits

Tue, 07 Apr 2020 20:30:05 GMT

Check your documentation to see what you agreed to!

Are you aware that if your line of credit or variable product is "open," that it may be subject to interest rate increases at the Lender's discretion?

For example, a secured HELOC may be registered for a ceiling rate of Prime +10% even though your set rate was lower at the time of issuance. Lenders have the right to change your discount or premium at any time simply by notifying you.

Today, I received word from one of my clients that their unsecured line of credit went from Prime +4% to Prime +9% even though they always make their payments on time. When interest rates (the Bank of Canada overnight lending rate) normalizes, it is unlikely that their Lender will reduce this premium!

Also, not everyone understands that running the outstanding balances of these type of products right up to the credit limit risks is hurting your credit beacon score and history. This further exasperates the possibility of refinancing at a preferred rate.

Now, more than ever, it is imperative to take action by:

Conducting a full review of your financial plan and budget.
Check your credit documents to see what you agreed to.
Weigh your credit options by checking with an independent mortgage broker
Restructure where necessary.

When you decide to make hard decisions to strengthen your financial situation during and after Covid-19, you need to ask yourself an important question:

"If you are saying yes to a new financial plan, what are you prepared to say no to?"

It's your mindset, your ability to face hard facts and truths, the decisions you make to formulate a new financial plan, and then your fortitude in working that plan that empowers you. Saying no and finding a better way can be your road to financial security, relieving stress, and getting through this crisis and the next.

In your best interest,

Winona

If you have questions or need help, you can book a complementary consultation here

Taking Another Look At Reverse Mortgages

Thu, 02 Apr 2020 00:09:16 GMT

Avoid the Risks of Helocs and Mortgages in Retirement

I know, you are ready to argue and tell me that your advisors, friends or Mr. Google tell you that a Reverse Mortgage is a bad deal. Even your trusty Banker will dissuade you from transferring out of their HELOC or Mortgage product, to obtain a Reverse Mortgage at another lender. (Do you expect otherwise?)

The fact is that for 20% or more of people over the age of 55, it is the best solution there is. You need facts from someone that is not biased and that has the ability to give you all your options. There are some very compelling benefits, especially today with the reality we are now dealing with.

Here are 6 great ways that a reverse mortgage could help you:

1. Purchases of principal residence – for right-sizing/relocating and requires additional funds

2. Helping family – providing funds to your family for down payments and no worries about payments

3. Purchase of 2nd property – utilizing equity from your primary residence to put towards a vacation / rental property

4. Eliminating debt – and stop stressing and struggling with cash flow that is ruining your retirement

5. Home renovations – renovating to remain in the home or simply updating it rather than selling

6. More Income – additional income (Tax Free) to cover expenses and enhance lifestyle

Many clients have reported back to say that it was the best thing they every did, despite the initial concerns they had before checking out the facts. However, we spent the time weighing all their options, had discussions with family, when applicable, and took a measured approach to ensure that it was right for them. This is key! Clients in their 50s now build this strategy into their long term plans, especially those heading into retirement with a mortgage.

Know the FAQs about Reverse Mortgages

Below is a list of the most commonly asked questions:

• Question: Will the bank own the home?

Fact: The homeowner always maintains title ownership and control of their home,

The Lender simply has a first mortgage on the title

• Question: Can the bank force the homeowner to sell or foreclose at any time?

Fact: A reverse mortgage is a lifetime product and as long as the property taxes and insurance are in good standing, the property remains in good condition, and the homeowner is living in the home, the loan won’t be called even if the house decreases in value.

• Question: With a reverse mortgage will the homeowner owe more than their house is worth?

Fact: Clients can qualify for up to 55% of their home’s appraised value and every reverse mortgage comes with a *No Negative Equity Guarantee which means that the overall debt will not exceed the cost of the loan as long as the conditions of the loan are met. In fact, 99% of clients have equity remaining in the home after the loan is repaid.

• Question: Are reverse mortgages too expensive because the rates are high?

Fact: Interest rates can be more favourable than alternative lenders' rates on second mortgages or unsecured loans. Plus, with a reverse mortgage, clients don’t have to worry about making any repayments as the debt isn’t owed until the borrower(s) pass away or no longer live in the home.

*The guarantee excludes administrative expenses and interest that has accumulated after the due date.

• Question: Isn’t a reverse mortgage a last resort solution?

Fact: A reverse mortgage frees up equity that is tied up in the value of a home and can allow the borrowers to enjoy their retirement on their terms. In fact, many financial professionals recommend a reverse mortgage as the proceeds are tax-free and after paying off debts, can be used for anything the client chooses, from purchasing a vacation home to helping grandchildren with school tuition.

• Question: Can the homeowner(s) still get a reverse mortgage if they have an existing mortgage?

Fact: A reverse mortgage can be used to consolidate existing debt, eliminate monthly debt payments and provide financial security. If a client has existing debt, these would need to be paid off first and the remainder of the funds can be used however the client chooses.

• Question: Isn’t a Home Equity Line of Credit (HELOC) a better option?

Fact: Clients should always explore all their options before making a decision. An independent Mortgage Broker is able to give you unbiased information to help you make the best decision for your personal situation. HELOCs are a good short-term borrowing option for people who can pay the interest and loan back in the near future. Whereas a reverse mortgage is a long-term financial solution that doesn’t require any monthly payments and provides the ability to prolong retirement savings.

• Question: Aren’t surviving spouses stuck with paying the loan after the homeowner passes away?

Fact: As long as the surviving spouse is on title, they can choose to remain in the home without having to make a repayment.

For more information, please contact me or book a consultation. By reviewing your current situation in-depth, weighting the pros, cons, and risks of HELOC, Mortgages and other options in retirement, you can make an informed decision.

In your best interest ,

Winona

Covid-19 Mortgage Deferment Plan

winonareinsma@gmail.com (Winona Reinsma) — Thu, 26 Mar 2020 00:52:12 GMT

Deferring To Preserve Cashflow Might Be Wise

No one should have to worry about their mortgage because of the financial impacts of COVID-19. CMHC announced that they're working with Genworth, Canada Guaranty and lenders to help by increasing their flexibilities to allow payment deferral of up to 6 months starting now.

This announcement applies to borrowers with an insured mortgage (generally those who bought with less than a 20% down payment - but not exclusively)

You can read the entire CMHC COVID-19 Announcement

Tools include:

- Deferral of payment

- Re-amortization of the mortgage

- Capitalization of outstanding interest arrears and other eligible expenses

- Special payment arrangements

If you find yourself in the position that you are about to be self-isolated, or quarantined and need help with your mortgage payments, please reach out directly to your lender.

Most lenders have options available to skip-a-payment or put a payment on hold (even before this new CMHC announcement).

It is imperative, however, that you contact your lender to request a deferment. Each lender has different options, and with how quickly COVID-19 is developing, lenders are updating their policies to help, regardless of whether you have CMHC default insurance on your mortgage, or not.

Some of our most common lenders are listed below, with their customer service phone numbers so you can discuss your skip a payment or hold payments options.

Call volumes are extremely high, so I recommend that you try very early in the morning or the evening when call volumes have decreased a little.

LIST OF LENDERS CONTACT NUMBERS

ATB 1-800-332-8383

B2B 1 800 263 8349

BMO 1-877-895-3278

Bridgewater 1-866-243-4301

CIBC 1-800-465-2422

CMLS 1-888-995-2657

Optimum 1-866-441-3775

Equitable 1-888-334-3313

Connect First 403-736-4000

Chinook Financial 403-934-3358

First Calgary Financial 403-736-4000

First National 1-888-488-0794

Haventree 1-855-272-0051

Home Trust 1-855-270-3630

HSBC 1-888-310-4722

ICICI 1-888-424-2422

Manulife 1-877-765-2265

MCAP 1-800-265-2624

Merix 1-877-637-4911

Marathon 1-855-503-6060

RBC 1-866-809-5800

RFA 1-877-416-7873

RMG 1-866-809-5800

Scotia 1-800-472-6842

Servus 1-877-378-8728

Street Capital 1-866-683-8090

TD 1-866-222-3456

ATB 1-800-332-8383

Financial Help in Extraordinary Times

Wed, 18 Mar 2020 18:22:26 GMT

As the COVID-19 threatens Canadian's financial stability, take proactive steps now to protect your family!

Canadian families are facing new financial challenges as job layoffs, school closures and uncertainty escalate. However, there are bright spots, and it's time to take a serious look at restructuring your finances. Do you need help?

It's time for action. There are several things you can do today to put your finances in order and take advantage of a rather unexpected opportunity! Amid the chaos, interest rates have dropped back down to all-time lows, but they won't stay here for long!

The Government has also pledged billions in support of Canadian workers and businesses. The Prime Minister addressed the nation for a third consecutive day. Today's comments included an announcement of a stimulus package designed to provide financial assurances to those citizens and businesses which are impacted by the covid-19 pandemic.

Here is what you should consider today:

1. Is it time to refinance your mortgage early? You may have to pay penalties to break a fixed or variable term mortgage, but you could save thousands on interest at these low rates. It's time to review your mortgage and check out the options. Be prepared for extra processing time right now, so start early.

2. Are you retired and need to improve your cash flow? Rates are low, the opportunities when you are retired are few when it comes to obtaining credit. Today is the best time to look at eliminating your mortgage payments and debt payments for a payment optional plan. Selling, moving, and downsizing is not everyone's best or only alternative.

3. Do you have a backup plan to cover expenses should your income be disrupted? A secured line of credit is the perfect option for emergencies and putting this in place today when you don't need it is the best course of action. For self-employed individuals, this is critical in today's climate.

4. Does your mortgage term mature this year, or are you planning to purchase a new home? Now is the time to arrange a mortgage review, prequalify (not preapprove which not sufficient) and secure an interest rate hold at viable lenders. You can do this with a Mortgage Broker who has multiple lender options and will provide you with customized service and advice.

5. Review the Government Financial Assistance Plan provided at the bottom with links to more details, to see what might apply to your situation.

The current crisis is extreme, but it won't last forever. The key to eliminating unnecessary financial hardship is to be proactive and put your finances in order. This period is also an opportunity to restructure, get rid of high-cost debt, put an emergency backup plan into your mortgage, prepare for a better retirement, and save money so that your family is better off in the long run. Isn't that what financial planning is all about?

Obtaining the proper advice from a Mortgage Broker who focuses strictly on mortgages and who deals with a wide variety of lenders is your best choice to navigate this complex financial crisis. A Mortgage Broker can make sure that the options you choose are right for your particular situation. Please feel free to call or email if you have any questions. If you are ready to take action, book an appointment here and let's talk: https://calendly.com/winonar/mortgage-consultation-by-telephone.

GOVERNMENT FINANCIAL STIMULUS PLAN:

Headline commitment

• Up to $27 Billion in direct support for Canadian workers and businesses.

Details here.

Employment Insurance highlights

• Emergency care benefits for those who need to stay home due to illness

Details here

• Emergency support benefits for those not regularly eligible for EI

Details here

Business support highlights

• Temporary withholding tax subsidy of 10% for small businesses employers, up to $25,000.

Details here

Tax highlights:

• Tax filing deadline for individuals extended until June 1

Details here

• New tax payments owing deferred until Aug 1

Details here.

Other initiatives

• Boosting the GST credit and Canada Child Benefit payments

Details here

• Moratorium on student loan repayments

Details here

• Boosting funding for First Nations communities, persons experiencing homelessness, and women and children fleeing violence

NOTE: Much of this plan will need to be to enacted by Parliament, with an expectation that payments could begin to arrive in early April.

ADDITIONAL UPDATES IMPACTING THE BANKING AND LENDING SECTOR

CMHC will be purchasing up to $50 Billion of insured mortgage pools. This is expected to significantly aid lender liquidity.

Details here

CMHC will also be permitting lenders to allow mortgage payment deferrals. Canada's 6 largest banks have stated that they will be working with clients on a case-by-case basis to determine deferral solutions.

Details here

Interest rates and the bond market continue to experience volatility, and despite extensive measures designed to boost liquidity, there continues to be upwards pressure on Canadian mortgage rates at this time.

Market Volatility Assists Homebuyers

winonareinsma@gmail.com (Winona Reinsma) — Thu, 05 Mar 2020 03:07:32 GMT

Qualification Changes And Lower Interest Rates

There is no doubt after this past week that 2020 is a year of changes. The impact of global markets, Covid-19, and whispers (in the shadows) of recessionary trends, we have seen significant market action that affects every Canadian (even if they do not want to deal with it!).

For the impact on the real estate market, this Spring will be one to watch. Will it go up, will it go wild, or will it be average? Opinions vary, and it depends on who you listen to, what their interest is, or if their livelihood depends on it!

However, two policy changes will make certain groups of consumers very happy if not relieved.

The first is a significant announcement about the changes to the Stress Test rules that will allow insured mortgage applicants to qualify for approximately 5% more mortgage money, starting April 6, 2020.

The second piece of good news for those looking to get into the real estate market happened this morning. The Bank of Canada announced that it was lowering the overnight lending rate to 1.25 percent from 1.75 percent. We are waiting for the lenders to digest this news and adjust their mortgage rates accordingly. This is the first change to the overnight lending rate since October 24, 2018.

What is also interesting when comparing the two most recent statements by the Bank of Canada (today and January 22, 2020), is the new comments in their message this morning:

"It is becoming clear that the first quarter of 2020 will be weaker than the Bank had expected" when CPI inflation was "stronger than expected"
While Canada's economy has been operating close to potential with inflation on target, "the COVID-19 virus is a material negative shock to the Canadian and global outlooks"
COVID-19 "represents a significant health threat to people in a growing number of countries" and in some regions, business activity has fallen sharply, supply chains have been disrupted, commodity prices have been pulled down and the Canadian dollar has depreciated
The drop in Canada's terms of trade, if sustained, will weigh on income growth
Business investment "does not appear to be recovering as was expected following positive trade policy developments"
Although markets continue to "function well," the Bank of Canada will continue to ensure that the Canadian financial system has sufficient liquidity.

As a result of its revised near-term outlook, the Bank's Governing Council noted that it "stands ready" to adjust monetary policy further if required to support economic growth and keep inflation on target.

The next policy announcement is April 15, 2020 and BofC will be coordinating with other G7 central banks and fiscal authorities as it "closely" monitors economic and financial conditions."

For Canadians, this means everyone is on alert and watching what will happen to markets, including real estate and stock markets. Our 2020 market is gearing up to be an interesting one, as buyers and sellers ponder their next move. For some, this is quite literal!

For my prequalified mortgage clients, I am watching for announcements that will benefit your applications, including the change in the stress test calculations on insured mortgages, effective April 6th. As these roll-out, you will be contacted directly with updates.

If you are looking to prepare yourself for making a move in the British Columbia, Canada real estate market, our custom service will smooth the process out for you and prepare you for whatever Mr. Market throws at us this year. This is also a perfect time for an annual review of your current mortgage to find out how these changes might alter your options.

Contact me at 778.246.2547 to book an appointment today if you are looking for professional guidance and a mortgage in your best interest!

Residential Market Commentary - week of May 8, 2017

winonareinsma@gmail.com (Winona Reinsma) — Mon, 08 May 2017 22:17:51 GMT

Benchmark price up 11.4%.

Everyday we are bombarded by real estate news and the big question, "boom or bust?" I receive a great update from one of my favorite lenders who has terrific mortgage features that favors homeowners. Since these sound bits give me the facts and heads up on what's real out there, I've decided to share these, so you too may cut through the noise and understand what is really happening in our Canadian market place.

"The April sales numbers are out and it is clear government interventions are having an effect; exactly what effect, though, is not clear.

In Vancouver the 15% foreign buyers tax appears to have hit the detached single family segment the hardest, for now. Prices are down about 4% since the tax was implemented in August. The decline is led by the luxury end of this segment which has seen prices dip almost 3% since August. Still, the benchmark price for all home types was up 11.4% compared to a year ago.

What the luxury market lost, the condo market appears to have gained. The benchmark price for a condo jumped 16.6% y/y and more than 8% in the past 3 months. The real estate board says the tight supply of entry level and “missing middle” housing means prices are likely to keep climbing even as sales volumes slide."

May 8, 2017, 11:27 AM by Joelle Park

Depending on your situation, this can be great news or not so much. If you have any questions, or want to take advantage of the current market place, I would be glad to have a conversation.

To your financial health!

Winona

Get Out of Debt with a Plan

Mon, 06 Feb 2017 23:11:10 GMT

We are reminded daily about Canadian’s rising debts, now reported to be over $1.68 for every dollar earned. Bank of Canada has been stressing their concerns about the rising debt levels at every opportunity for several years, as they warn us that interest rates will eventually rise.

Credit card debt is so common today that many of us don’t even realize when we are heading into financial danger. Everyone is doing well until something unexpected happens, and those of us that don't have a 6 to 8-month emergency fund tucked away, suddenly face the reality of our consumer debt burden.

So ask yourself, are you relying on your credit cards to get through the month? Do you worry or cringe when you are at the cashier, watching the bill add up and wonder if you are at your credit limit yet? Do you have money stress? 70% of Canadians report that they are worried about money, so remind yourself that you are not alone if answer yes to any of these questions.

For most of us, our debt issues are not much fun to think about, but the worry and strain on our lives and relationships make it a necessity. What happens when interest rates eventually go up? Oops, you never thought of that? Have you calculated what your payment would be if your interest rate goes up 1 or 2 percent at the end of your mortgage term?

Many of us have relied on a debt consolidation or equity-take-outs to set our budgeting straight when it's derailed. While most people have heard about the new mortgage rules, the realization of how this impacts you usually doesn’t happen until you apply for new financing. The new mortgage regulations, along with the uncertainty in housing prices (are they going up, are they going down?), makes mortgage financing more onerous than two to three years ago. November 30th, 2016 regulations have a very significant impact that many consumers have not realized yet.

While interest rates have not increased significantly, loan to value, debt ratios, product options, and beacon score requirements have changed a lot, and for some that change is quite dramatic. If you are counting on a mortgage refinance to get your debt under control, you might be surprised with new conditions, or when you are being advised to seek a “B” lenders assistance instead.

“B” lenders are willing to provide financing to those declined by the “A” side, but at a premium cost, charging additional fees and higher interest rates. In the current market, however, “B” lenders and private lenders, including Mortgage Investment Companies, are decidedly more cautious as well.

There are steps to set your budget and credit card spending on the right path so that you won’t face these problems. It will take time and perseverance.

The first step is to review the household budget and debt situation with everyone involved. Ask yourself honestly if your money habits are putting you further and further into debt. The cycle of increasing debt stops the minute you become conscious of your habits and then decide to change them.

Next, design a money plan, and then live your new reality one hundred percent. Getting out of debt may require short-term pain for long-term financial freedom. However, remind yourself that you are worth it because this goal is immeasurable in the peace of mind and security you will attain.

You don’t have to be one of the 96% of Canadians that pay themselves last or the 70% that have money stress. You just have to decide to take control of your money, break any bad habits, spend consciously, and start on a new path to financial health and freedom.

To book a free Credit Assessment and Mortgage Planning Consultation call me 604-882-3643 .
This complimentary service can save you thousand of dollars down the road, and provide you peace of mind.

Reverse Mortgages Are Better Than Ever!

Fri, 03 Feb 2017 00:00:00 GMT

There are a lot of myths out there about Reverse Mortgages or "CHIPS," but since obtaining the Certified Reverse Mortgage Expert designation, I've found it to be a great option for the right situations.

Their banker told a recent client, "Sorry, you will have to sell your house!" Luckily they didn't give in, but instead, they continued to look for someone to help them, which lead them to me. In their particular situation, not only could they stay living in the family home they loved, but they were also able to defer their property taxes. This option allowed them to take care of some health needs and eliminate the pressure on their monthly fixed income.

If you are approaching retirement, don't wait until you have a financial crisis to look at your options. Get educated on your options now, before retiring, so that you can plan for a happy, stress-free "retirement." Live the life you want on your terms.

The Three Myths of Mortgage Renewals

Wed, 01 Feb 2017 00:00:00 GMT

"Ah - where did the time go? My bank has mailed me an early renewal offer for my mortgage term..."

But wait! Did you know that accepting that offer without researching other market options is the biggest mistake you can make? If your mortgage is coming up for renewal in the next 12 months - read on.

1. Renewing Your Mortgage before maturity is always good thing – False!

Banks will call six months in advance to secure your business for the next five years to beat out competitors. This way you won't be tempted to change lending institutions at maturity when you find a better offer. The best strategy is to find out what the competition offers and obtain a rate hold.

Researching your options is what I specialize in as a mortgage broker, and I watch the market during the remaining last four months of your term. If you have already renewed early at your bank, then you lose out on this opportunity to obtain a mortgage that is a better deal.

2. Renewal Mail Outs are my best option – No, don't ever sign this!

Banks know that a certain percentage of people will just sign the renewal form that they receive in the mail without further research. However, even a small discount over the next term can put more money into your pocket, instead of the bank's coffers.

3. The Last Second Renewal Offer – Don't fall for the "It's too late now!"

Your bank will contact you a week or two before your renewal date. If you are unprepared, you may agree to whatever they offer you. Never agree! Find out what your best options before you sign anything because it's not too late! You might have to go into a short-term open rate mortgage for a week or two, but it can be very costly to accept this rush offer without doing some homework.

HOW TO AVOID THE ABOVE THREE SITUATIONS:

If you want to save money, you need to be pro-active. Start early, watch the market, check out and compare competitors mortgage products, looking for the difference in the features and flexibility. It’s not just the interest rate that you need to look at, but the restrictions in the contract and how they may apply to you down the road.

I can help you with this. Email me your renewal date at win@winonareinsma.com, and I will get in touch with you six months before your mortgage term renews. We will agree on a personalized strategy taking your goals and finances into consideration and then watch the competitors for the best options. Worse case scenario, if I can't find a better mortgage option, I will negotiate directly with your current bank to ensure you receive their best offer. You have nothing to lose because in most cases my services are FREE.

It's your money, so take control and find out how to keep more of it.