Understanding Your Mortgage Payments

General Angela Calla 10 Oct

Mortgage Payments:

 

📌Monthly mortgage payments are the most standard, and lenders use this common payment to calculate the amount you would pay on other schedules. But choosing another option can shave time off your mortgage and thousands from your interest costs. 💰💡

 

📌 Semi-monthly means you will divide your monthly mortgage payment in half and pay that amount twice a month. 📅✌️

 

📌 Biweekly means paying 26 payments yearly, once every 2 weeks. For 3 months each year (usually), you’ll need to make 3 payments in a month. ⏰💰

 

📌 Biweekly Accelerated means you’re paying 26 payments each year, with an extra monthly payment added into the calculation and spread out over the year’s payments. For 3 months each year (usually), you’ll need to make 3 payments in a month. On average, this payment method can take your amortization from 25 years to 22.5 years. ⚡️💸

 

📌 Weekly means you’re paying 52 payments each year, which is once a week. 🗓️📆

 

📌 Weekly Accelerated means you’re paying 52 payments each year with an extra monthly payment added into the calculation and spread out over the year’s payments. On average, this payment method can take your amortization from 25 years to 22.5 years. ⚡️📆💸

 

Have any mortgage related questions? I’m happy to help. 😀

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Navigating the Rising Mortgage Rates: Selling vs. Renting – Angela Calla On Global News

General Angela Calla 5 Oct

In today’s uncertain economy, making financial decisions can be a daunting task. Have you ever found yourself or a loved one contemplating the idea of selling your home and reverting to renting? It’s a question that’s been on many Canadians’ minds lately. In this article, we’ll explore various options and strategies to help you stay in your home despite the challenges posed by rising mortgage rates and a limited housing supply.

 

Understanding the Landscape:

The current real estate market in Canada presents some unique challenges. Mortgage delinquencies are stable, and home prices continue to soar due to an influx of newcomers and a constrained housing supply. Families, however, are facing difficulties finding rental properties, making renting not a viable option for everyone. Moreover, interest rates are expected to rise further, with at least one more hike in the near future. Additionally, 1/4 of mortgage renewals are scheduled in the next 2 years, making it a critical time for homeowners to evaluate their strategies.

 

Exploring Your Options:

Here are some strategies we can help you with to navigate these challenging times:

 

Switching to Lenders with Longer Amortizations: Consider switching to lenders offering longer amortization periods, which can help reduce your monthly mortgage payments and ease financial strain.

 

Debt Consolidation: Consolidate debts outside your mortgage to potentially save hundreds or even thousands of dollars in interest.

 

Modification of Payment Strategies: Instead of accelerated payments, opt for reduced minimum payments, instantly improving your cash flow by up to 8 percent.

 

Equity Loans: Explore the option of obtaining an equity loan to create a financial buffer for your family.

 

Reverse Mortgages for Those Over 55: If you’re 55 or older, consider a reverse mortgage as a source of income.

 

Multigenerational Family Planning: Plan for lump sum contributions from family members as early inheritances to help pay down your mortgage.

 

Relocating Within BC or to AB, Winnipeg, or Sask: If your employment allows, consider moving to areas with more affordable housing options.

 

Budget Adjustments:

Many clients are taking proactive steps to realign their finances:

 

Reducing Car Expenses: Some are downsizing to one-car households or opting for less expensive vehicles.

 

Income from Renting: Taking in students or renting out parking/storage spaces can provide extra income.

 

Turning Passion into Profit: Transforming hobbies or passion projects into income-generating activities.

 

Adjusting Spending Habits: Reviewing and cutting back on unnecessary expenses.

 

Conclusion:

Navigating the complex world of mortgages and homeownership in today’s economic climate requires careful planning and expert advice. If you’re seeking personalized mortgage advice for you and your family, don’t hesitate to reach out to us directly at 604-802-3983 or via email at angela@countoncalla.ca.

 

[Link to Video and Full Article: https://globalnews.ca/news/10000476/mortgage-rates-rising-bc-selling-versus-renting/] Navigating the Rising Mortgage Rates: Selling vs. Renting

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

2023 Homebuyer Sentiment Survey: Rising Prices, Inflation, and FOMO

General Angela Calla 27 Sep

By Alyssa Davies • September 26, 2023

Homeowners and buyers in Canada have been through a lot in the past few years. So, it’s no surprise that the homebuyer sentiment for Canadians may come with feeling anxious and pressured about homeownership.

Being a homeowner has been an adventure, whether it be a global pandemic, a shaky economy, rising interest rates or soaring inflation. With adventures like this come plenty of emotions, financial stress and unavoidable change.

To determine what homebuyers feel, we surveyed 800 respondents. We asked them to measure their home-buying experience between 2020 and 2023. Plus, we wanted to hear about their feelings on the current economy and real estate market. Here’s what we found:

Key Takeaways on Homebuyer Sentiment:

93% of people say a competitive real estate market and rising interest rates had at least some influence on their decision to buy a home
30% of Canadian homeowners feel their finances are tight
Only 3% of Canadians ‘never worry’ about being able to afford their mortgage when it comes up for renewal
45% of Canadians would still be happy in their home even if there were another interest rate increase before the end of this year

Homebuyers Rush to Secure Mortgages Before Prices Rise
Home prices have been all over the map in the past three years. Prices were at $567,332 in 2020, peaking at $703,875 in 2022 and dropping to around $662,103 in 2023. Because of this, many homebuyers were in a rush to buy a home before they could no longer afford the cost.

In fact, 93% of people say a competitive real estate market and rising interest rates had at least some influence on their decision to buy a home. And another 43% of buyers said that because home prices were rising, they wanted to break into the market before homes became even more unaffordable.

When Your Choice is Between a Competitive Rental Market and an Expensive Real Estate Market, It Isn’t Easy
For Brianne Harrison, buying felt like the only option. In 2018, she went to three different rental viewings only to be rejected because landlords chose tenants willing to pay the most monthly rent. “People were offering to pay more than what was listed out of desperation to find a place,” says Harrison, who bought a home in Kawartha Lakes, a municipality in Central Ontario.

Her experience isn’t unique. As of August 2023, a rental report from Rentals.ca and Urbanation says the average rent in Canada is $2,078 per month. Compared to July 2021, rental prices have increased by 21% — and year-over-year increases are 8.9%.

Because of this, many Canadians feel pushed into homeownership and see homes as a source of security, even when prices are high.

“Many people cannot afford today’s rental prices,” says Harrison. “Most people cannot afford to buy at today’s housing prices.” Ultimately, Harrison had to make an impossible choice. Even though she feels that renting is the more affordable option, the risk of being displaced into an unstable rental market wasn’t worth the price difference.

92% of Canadians say Inflation is At Least Somewhat Impacting Their Ability to Afford Their Home
Although home prices can dramatically impact buyers and their decision-making process, that’s not the only thing impacting homebuyer sentiment. Inflation is another challenge for homeowners.

In June 2022, inflation hit a 41-year high of 8.1%, making many of Canadians’ essentials, like gas and groceries, unaffordable. These increased costs and expensive real estate have not made affording necessities easy.

Today, 30% of Canadian homeowners feel their finances are tight. But, say they’re managing. In other words, they’re still able to meet their basic needs but with little room for extras.

Inflation has come down dramatically from the 8.1% we saw in 2022, but it did surge to 4% in August. The Bank of Canada’s target inflation rate is between 1% and 3% — meaning there is still work to be done. So, even with lower inflation, the damage has been done, and homeowners must get used to living on a tighter budget.

Strict mortgage guidelines and the mortgage stress test exist to stop Canadians from getting into more debt than they can handle. And most experts encourage homeowners to spend 30% or less on their household expenses. But, 27% of Canadians spend between 31% to 40% of their income on housing. So, many homeowners are spending more than what’s recommended on their homes.

Only 3% of Canadians ‘Never Worry’ About Being Able to Afford Their Mortgage When it Comes Up for Renewal
The Bank of Canada has raised the benchmark interest rate to 5% in the past six months, the highest since the 2000s. Some think that there is potential for another rate hike in the near future. And inevitably, these rates will affect most Canadians when their mortgage is up for renewal.

So, does this impact homebuyer sentiment? When we asked Canadian homeowners if they are worried about being able to afford their mortgage when it comes up for renewal, it wasn’t surprising to see that only 3% never worry. On the opposite end of those who never worry are those who say that thinking about mortgage renewal causes them to worry constantly.

In this regard, 20% of Canadian homeowners say this is their reality. This is a significant increase of 9% from homeowners surveyed at the same time last year.

 

Navigating Renewal Anxiety
According to the survey data, most homeowners’ mortgages are up for renewal in two to three years. And there is no saying whether interest rates will continue to rise or drop over that period.

To better understand what Canadians can do to mitigate their anxiety, we spoke to Angela Calla. Calla is a mortgage expert and author who says there are options. “For any renewals coming up in the next six months, I strongly advise being proactive.”

Calla says that most renewals will result in a significant increase in payments. But, there are likely opportunities to minimize the payment increase. “Due to the volatility of interest rates, we regularly see lenders issuing non-competitive renewal offers (often 1% above market rates),” says Calla. “This is an important time to get a second opinion on your options.”

What Should Homeowners Facing Mortgage Renewal Do?
Some other options suggested by Calla for those facing mortgage renewal include:

  1. Increasing their mortgage amortization
  2.  Switching from biweekly to monthly payments, saving around 8% annually
  3. Looking at a reverse mortgage

Unfortunately, only 37% of homebuyers use a mortgage broker. And this makes finding the best rates more difficult. Calla says that using a mortgage broker comes at no cost to the client. In addition, they get unbiased advice with the power of choice.

34% of Canadians Have Seen Their Mortgage Payments Increase Since Purchasing
The key interest rate jumping from 1.25% to 5% since the start of 2020 has been jarring for many Canadians. In particular, homeowners on a variable rate mortgage have been experiencing the most change. The rapidly rising rates have meant steadily increasing mortgage payments — and a lot of financial stress.

Sierra Keane (name changed for anonymity) was one of those homeowners. She and her partner purchased their home in Toronto in 2021. Initially, their interest rate was 1.29%. But, the current interest rate as of July 2023 is 6.04%. This increase in mortgage rate means that Keane is now paying around $2,500 more monthly on their mortgage.

“At the time we bought our home, we expected that interest rates would rise over time and factored that into our budget,” says Keane. “However, we could have never predicted that it would increase this much or this quickly.”

Markets Can Change More Rapidly Than We Realize
Similarly, Stelios Grigorakis and Alexandra Rousianos purchased their home in February 2022 in Toronto. Their mortgage rate has gone from 1.25% to 6%. The couple got advice from a mortgage professional saying that a variable rate mortgage was the best option. The broker told them it would always be lower than a fixed rate. They also said there wasn’t any way the rates would increase as quickly as they did.

“We do wonder if the mortgage broker did their due diligence as rates began to go up,” says Stelios. The couple now wishes they had locked in their rate when it hit 2%. This is because today, every mortgage payment they make is going directly toward the interest instead of the actual loan.

When determining what mortgage type (variable or fixed rate) makes the most sense, Calla says that market conditions can change rapidly, and your mortgage strategy must be one you are comfortable with and can modify. “Any decision made or advised on is at the snapshot in time with the information at hand,” says Calla.

She says most of us are listening to the Bank of Canada and trusting that they know what is happening in our economy. So, when someone like Tiff Macklem says that interest rates are very low and will be there for a long time — it can impact our decisions.

Interest Rate Jitters: Canadians Eye Bank of Canada’s Next Move
For many Canadians, the anxiety of the next Bank of Canada decision has become a normal feeling. In fact, 9% of Canadians say they would be unhappy in their home if there were another interest rate increase from the Bank of Canada before the end of the year.

Daniel Foch, a real estate expert and investor, says to remember that interest rates are transitory and are not a permanent obligation. “If you’re doing things right, you should only be paying interest on your mortgage for 25 years,” says Foch. “Whereas the interest rate on the typical mortgage only lasts five years.”

This means you get four more chances of a better rate during mortgage amortization. While the Bank of Canada is trying to slow down the economy, which can be painful for homeowners, Foch says the alternative scenario could be worse.

“Imagine the Bank of Canada didn’t start hiking interest rates, house prices continued their record growth trajectory in 2022, and inflation was still over 8%.” Foch guesses this outcome would hurt far more people than the current path.

 

Regardless of what comes next, 45% of Canadians would still be happy in their home even if there was another increase before the end of this year. So, homebuyer sentiment is mixed. This hard-pressed but happy outlook tends to be a theme when looking at the happiness of pandemic homebuyers and post-pandemic buyers.

Comparing and Contrasting Homeowners’ Happiness Levels
It doesn’t matter when they bought; homeowners are happy with their home purchase today. When we look at those who bought their home during the COVID-19 pandemic, 40% are still very happy with their home purchase today. Similarly, of those who purchased their home post-pandemic, 42% are very happy with their home purchase today.

Costs are high, and there is anxiety about the future. But, Canadian homeowners are overwhelmingly happy with their living situation and feel they paid what their home is worth.

Survey Details
The Homebuyer Sentiment Survey 2023 data was collected online between August 24, 2023, and September 1, 2023.

The online survey asked 800 respondents various opinions and self-reports to measure their home buying experience and their homebuyer sentiment between 2020 and 2023. They shared their feelings about the current economy and real estate market.

The estimated margin of error is +/- 3 percentage points.

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Angela Calla on Global News

General Angela Calla 26 Sep

With Wednesday’s relief of the Bank of Canada holding rates, here is a quick segment we did on Global News if you missed it (watch here).

Our hope is that with this pause we will also see a little bit of relief with fixed rates in upcoming weeks, before we evaluate what the Banks of Canada decided to do In October and December.

1 in 5 Canadians will have a mortgage renewal upcoming in 2024, so starting to plan now is ideal.

If you or a loved one have questions on a mortgage, please reach out to us directly by replying to this email or calling us at 604-802-3983 for personalized mortgage advise.

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

CMHC’s Eco Improvement

General Angela Calla 26 Sep

Apply for a partial premium refund of 25% if you’re CMHC insured and working on energy efficient renovations to your recently purchased home.

CMHC Eco Improvement aims to reduce the environmental impact of housing by supporting energy-efficient improvements. Apply for a 25% partial premium refund if you’re insured with CMHC and you’re spending at least $20,000 in energy efficient renovations. The program is available for both home buyers and individual condo buyers.

It aligns with CMHC’s commitment to combat climate change and the Canadian government’s goal of carbon neutrality by 2050.

Read more here: CMHC’s Eco Improvement

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Self-Employed? We have a mortgage for that!

General Angela Calla 20 Sep

Often times we get calls or emails from those who are disappointed …they spoke to the bank directly on what options are available to make a home or investment property purchase.

Let’s take a look at “why” this happens ( more of a breakdown in my book for purchase here)

Every Bank in Canada only has a few options which may, or may not include what you need as a borrower.

It’s impossible for every lender to have every product!

Simply put,  it’s most likely they just don’t have the product you require for your acquisition.

The good news is: You have options!

Canadians have access to mortgage professionals to provide you the power of choice to decide what works best for your financial plan and timelines.

Self Employed Mortgages are generally allocated by lenders in 3 ways

      1. Net Income Grossed up 15 percent

  1. Stated Income- derived in-between the gross and the net income by review of financials and add backs – there are a handful of banks ONLY accessible by mortgage brokers that specialize in this lending
  2. Private Lenders- who look more at the equity, credit and actual property for security as a whole for you to obtain your ownership goals.

Redirection can lead to to pauses where we end up finding pauses.

We have dedicated the last 20 years to educating clients directly on this, speaking for influencing partners such as accountants, book keepers, financial planners and lawyers and most recently instructing for local real estate boards in addition to the media.

If you or a loved one want personalized mortgage advise for you or a group you represent please email us directly at angela@countoncalla.ca

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.Click here to view the latest news on our blog. 

Tempting Rates

General Angela Calla 20 Sep

Beware of Tempting Rates! 🚫💰

Some rates seem too good to be true, and they often are. 😲 Lenders may offer specials, but you’ll lose important mortgage terms and conditions. The bona-fide sales clause locks you with the lender until your term ends (ex. the whole 5 years), limiting your options.

They may also restrict prepayment privileges, preventing you from saving on interest. 💰

Don’t be lured by a slightly lower rate—committing long-term to a limited deal isn’t worth it. ❌

All of this and more in my book (https://loom.ly/uDw_e-k) on Amazon or Audible

#themortgagecode #theangelacallamortgageteam #author #mortgagebroker #mortgageexpert #tricites #countoncalla

Contact us today! callateam@countoncalla.ca or 604-802-3983!

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Get your rates holds in for renewal and purchases asap!

General Angela Calla 19 Sep

 

Roughly 50% of the prices in the CPI are growing more than 5%, which is still very concerning for the Bank of Canada. Market rates moved up meaningfully on the news. With the 5-year government bond yield well above 4%, fixed mortgage rates will increase this week. The odds of another 25 bps rate hike this fall have risen, but there is still another employment report and the September CPI release before the next announcement date on October 25th.

Gasoline prices in September thus far have already risen to 10% above year-ago levels, so September inflation is likely also high. The additional problem for the Bank of Canada is that core inflation measures have also risen and will likely remain sticky on the high side. This has increased the odds of another rate hike this year.

Mitigating the Bank’s inflation concerns is the slowdown in economic activity. Employment growth has slowed as the jobless rate rose to 5.5% and job vacancies fell. Excess demand has also fallen. Financial strains in the household, financial and business sectors are emerging as delinquency rates on non-mortgage debt have soared. A pause in BoC rate hikes is warranted, but if the economy starts to pick up again or core inflation continues to hold steady or rise, additional rate hikes cannot be ruled out.

Bottom Line

If you have a renewal upcoming in the next 6 months or are considering a purchase please get your rate hold in with us today

604-802-3983

angela@countoncalla.ca

 


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Understanding Responsibilities of being a Co Signer or Guarantor on a Mortgage

General Angela Calla 18 Sep

With changes in qualifying rates, increased housing prices, changes in relationship, it’s not uncommon for a parent, or sibling, aunt or cousin or even strangers to consider working together to achieve there home ownership dreams. The ability to buy a spouse out or even obtain a better mortgage renewal to improve your finances are most Canadians desire and that brings up a very important question.

What will the lenders approve for you to do?

Will they insist that all borrowers are co signer/borrowers? Or ,will they allow a party to the mortgage to go on as a guarantor? Is either of those what the other desires for as they plan for the future?

Being a co-signer or guarantor on a mortgage in British Columbia, Canada, can have significant financial, tax and legal implications. It’s important to understand the pros and cons of each role before making a decision. Here’s an overview of the advantages and disadvantages of being a co-signer vs. a guarantor:

 

Co-Signer:

Pros:

Helps Qualify for the Mortgage: Being a co-signer can help someone who might not otherwise qualify for a mortgage due to insufficient income or credit history. Your strong financial position can strengthen their application.

Shared Responsibility: As a co-signer, you share the responsibility for the mortgage payments and any associated debt. This can provide a sense of security for the primary borrower.

Builds Credit: If the mortgage is paid on time and in full, it can positively impact your credit score, as the account is reported on your credit history.

Cons:

Financial Responsibility: Co-signing makes you equally responsible for repaying the mortgage. If the primary borrower defaults, you’re obligated to cover the payments. This can lead to financial strain or damage your credit if payments are missed.

Risk to Assets: If the primary borrower defaults and the property is foreclosed upon, your assets may be at risk if the sale proceeds don’t cover the outstanding mortgage balance.

Limited Control: You have limited control over the property. You don’t have full ownership rights, but you’re responsible for the debt. This impacts your ability to obtain credit for borrowing for yourself in future as this loas is included in your ratios. Not living in the property also will trigger property transfer tax and future capital gains taxes potentially.

 

Guarantor:

Pros:

Assists with Qualification: As a guarantor, you provide a guarantee that the primary borrower will fulfill their mortgage obligations. This can help them secure the mortgage.

Limited Liability: Your financial liability is limited to the guarantee amount specified in the contract. You’re not automatically responsible for mortgage payments.

Maintain Ownership: Unlike co-signers, guarantors typically do not have any ownership stake in the property, so your personal assets are less likely to be at risk.

Cons:

Risk of Paying: While you’re not automatically responsible for payments, if the primary borrower defaults, you may be called upon to cover the mortgage, which can affect your financial stability. This also will be calculated in your ratios limiting future borrowing power. If not living in the property, property purchase tax and capital gains may be applicable

Credit Risk: Being a guarantor can impact your credit if the primary borrower defaults and you’re called upon to cover the mortgage payments.

Limited Control: Similar to co-signers, guarantors don’t have control or ownership rights over the property.

Difficulty Removing Guarantee: It can be challenging to remove your guarantee from the mortgage, as this typically requires the primary borrower to meet certain financial criteria and refinance the loan.

Before becoming a co-signer or guarantor, it’s crucial to carefully review the mortgage agreement and consider consulting with a legal and tax advisor. Additionally, open and honest communication with the primary borrower about their financial responsibility is essential to avoid potential conflicts and financial hardships down the road. It is the borrowers responsibility to ensure they have consulted the appropriate parties prior to funding a mortgage.


Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Co-ownership on the rise: How Canadians are responding to housing affordability challenges

General Angela Calla 18 Sep

While many people decide to co-own a home for cultural reasons or to help take care of elderly parents or young children, more Canadians are now turning to co-ownership as a means to combat housing in-affordability.

In 2023, 6% of Canadians said they co-own their home with someone other than a spouse or significant other, with two thirds (76%) of those saying their decision was motivated by affordability challenges, according to a Royal LePage survey.

For those between the ages of 25 and 34, a full 83% said their decision was driven by a lack of affordability.

Of those who currently co-own, 89% are co-owning with a family member, 7% co-own with friends and 8% are co-owning with someone who isn’t a friend or family member.

Nearly half of the respondents say they and their fellow co-owners live in the home together. Another 28% don’t cohabitate while 6% say the property is not used as a primary residence.

A tale of two brothers

British-Columbia-based mortgage broker Angela Calla of the Angela Calla Mortgage Team said she recently worked on a deal involving two brothers in Surrey who decided to purchase a home together.

The brothers were both single, in their mid-twenties and living with their parents while working in the trades. They wanted to move out, but rather than renting, they decided to purchase a home together so they could start building equity, Calla says.

They were each earning about $70,000 a year and could save about $2,500 per month while living with their parents. They ended up purchasing a condo worth $600,000 and made a 10% down payment, contributing $30,000 each.

“Now they were saving money monthly and they were also building equity,” says Calla.

To arrange this, they worked with a lawyer to outline the rules of their agreement, with one important item in their contract being that they can’t have partners living at the house, which could open the door to family law. While this was a small sacrifice, Calla says it was worth it to the brothers, who view this purchase as a stepping stone to being able to purchase their own homes in the future.

“They bought for less than they could be approved for because they know that they’re young and that the next stage of their life would mean that they get in relationships,” says Calla. “You definitely need to consult a lawyer and consider that the life stage that you’re in right now is not the life stage that you’re going to be in in a few years.”

Calla emphasizes that in all cases of co-ownership, it’s essential to meet with a lawyer to discuss the terms of the agreement and how conflicts will be handled should they arise.

“Be very crystal clear about having the discussions about the hard aspects of what can happen,” says Calla. “Speaking to a lawyer who is expert in that is going to be a good guiding force for you in terms of how you’re going to handle those situations when they come together.”

Corporate co-ownership programs on the rise

There has also been a rise of companies dedicated to offering co-ownership options for those wanting to get into the housing market, but who don’t have the means to do so on their own.

One such company is Toronto-based Ourboro, which co-invests up to $250,000 towards a buyer’s down payment, which in turn earns the company a share of the future value of the home.

Lorne Andrews, principal broker at DLC Expert Financial, said he has personally referred many of his clients to Ourboro.

He said one of the advantages of this option is that the homeowners get to live in the home alone and are responsible for the mortgage payments on their own. This helps them build equity and potentially a larger down payment for a better mortgage contract in the future.

“There are many people out there who could afford to qualify for the mortgage, but they don’t have a 20% down payment,” says Andrews. “This could be a great way for people to get involved a lot sooner and not that many people know about it.”

Ourboro requires buyers to have at least a 5% down payment and then they will contribute the remaining amount to get them up to a 20% down payment. Having an uninsured or “conventional” mortgage allows the buyers to get a longer amortization period that would be possible with an insured mortgage. It also allows them to save on default-insurance fees.

“We always recommend this as a stepping stone,” says Andrews. “Get into a home today, build equity, cash out, now go buy your home with the equity that you’ve built in this home over the first four or five years.”

Co-owning is a rising trend in an unaffordable market

Whether deciding to co-own a home with another person or company, co-ownership is quickly rising as an option for many to get a foothold in a housing market that is becoming increasingly unattainable.

“Different generations of families living under one roof is not a new phenomenon, but has been growing in popularity in recent years,” said Karen Yolevski, COO at Royal LePage.

“In a market beset by reduced home supply, escalating prices, tightened mortgage qualification requirements, and the highest borrowing rates in more than two decades, many buyers are having difficulties securing the property that they want,” she added. “By dividing the cost of a home between more people, Canadians can not only get their foot on the property ladder more easily, but also expand their home search to more desirable locations or larger properties that may not have been accessible with their budget alone.”

 

(Article courtesy of Canadian Mortgage Trends featuring Angela Calla)

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog.Â