Globe and Mail – Reverse Mortgages

General Angela Calla 16 Oct

 

 

You can read the full article here.

 

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. 

October 2024 Newsletter

General Angela Calla 9 Oct

Welcome to the October issue of my monthly newsletter!
It’s spooky season, but thankfully with the latest Bank of Canada rate cuts, your mortgage doesn’t have to be! Find out what the decreased interest rates mean for you, plus check out my tips to alleviate your financial stress this Fall.

Scroll down for all the details!

What the Bank of Canada Rate Drops Mean for YOU!

With the Bank of Canada rate decreases throughout the summer and into September, I thought this would be a great opportunity to update you on what this means for your mortgage.

If you’re on an adjustable-rate mortgage, this will result in a slight decrease in your mortgage payments, giving you more cash flow each month!

For example, if your mortgage balance is $750,000 at the previous 6.20% interest rate your approx. compounded monthly payment was likely around $4,924. With the new rate of 5.95% your approx. compounded monthly payment on an adjustable-rate mortgage will be $4,809*. This is an estimated $115/m decrease ($15/m per 100k balance) on your payment. While it may not seem like much, it can certainly add up over time resulting in hundreds of dollars in savings.

*Rates based on example of Prime minus .50% (old prime 6.70 and new prime 6.45)

Borrowers with static-payment variable-rate mortgages will also benefit from Bank of Canada rate decreases. While the monthly payment stays the same on these types of mortgages, the lower interest rate means that more of your monthly payment will go towards paying down your mortgage principal, and less will go towards interest.

Fixed-rate mortgages do not change when the Bank of Canada increases or decreases rates. However, if you have a fixed-rate mortgage, this declining rate environment could make it easier when it comes time to renew or refinance your mortgage. Lower rates give you more borrowing power in the market – this means your money can go further!

Recent changes are also great news for first-time buyers! Not only does a lower interest rate allow for more qualification options and lower payments, but recent Government of Canada changes on mortgage rules have removed many barriers previously faced by first-time home buyers.

The Bank of Canada has two more decision dates this year in October and December. Experts anticipate the Bank of Canada will continue these quarter-point rate cuts, taking the overnight rate down to 4.0% at year-end and potentially down to 2.75% next year.

Whether you’re a current homeowner, looking to refinance or renew, or wanting to purchase, this is exciting news for Canadians across the country!

However, keep in mind rate is not the be-all-end-all of mortgages. Factors such as type of mortgage, down payment amount, payment schedule, amortization, prepayment penalties, and more will also affect your mortgage and affordability.

If you want more information about your specific mortgage and how this changing environment affects your situation, please don’t hesitate to reach out!

5 Tips to Manage Financial Stress

Despite the Bank of Canada taking steps to reduce interest rates, many Canadians still feel pressure due to the overall cost of living and inflation. This uncertainty can be unnerving for many individuals, but don’t fret!

I have some tips and suggestions to help you manage your financial stress and help you to power through these latest economic changes:

  1. Prioritize What You Can Control: It can be easy to feel like you have no control over your financial situation, especially with the economy in flux. However, dwelling on things you cannot fix will only cause more stress. Instead, we recommend focusing on what you CAN control within your situation. For instance, take a looking at your phone bill and services to see if you can reduce the cost (even temporarily), reviewing your grocery bill and looking for places to switch to cheaper brands or alternatives, perhaps buying in bulk. You’ll not only save money, but you will feel like you have more control and help reduce stress.
  2. Pay Essential Bills: If you are struggling to pay your monthly bills, prioritizing them can help you gain some control. Knowing which bills are most important to pay first can help reduce anxiety as you’re not scrambling to decide what to do. In some cases, prioritizing your bills can also help you uncover unnecessary spending and you may find something that can be eliminated entirely (even temporarily).
  3. Automate Payments and Savings: If you’re struggling to keep up with your bills and payments, or are finding that you keep saying you’ll save money, but aren’t, considering automation for your finances can be a step in the right direction. Ensuring that your bills are paid on time will help reduce stress and protect you from wasting money on penalties for missed payments. Alternatively, you can also set up automatic money transfers on the days you are paid to move funds into a separate, savings account before you even see it. Thereby, reducing the likelihood that you’ll skip adding to your savings that month or use that money elsewhere.
  4. Find Ways to Earn More Money: When cashflow is a problem and you are feeling the strain of trying to afford your current lifestyle, looking for ways to earn additional money can be a lifesaver! Consider part-time work for the weekends, consulting in your area of expertise or picking up extra hours at your current place of work. Now is also a great time to discuss with your manager if you are due for a raise.
  5. Talk to Your Mortgage Professional: For most people, their mortgage is their largest monthly bill. If you are feeling the financial crunch, now is a great time to talk to meabout potentially changing your payment schedule or even looking for a different mortgage product with better rates (ideally if you are at the end of your term). Do not hesitate to be honest about your situation and ask what your options are.

Regardless of where you find yourself financially, there are often many solutions to help reduce and resolve your stress and ensure that you have healthy monthly cashflow.

Economic Insights from Dr. Sherry Cooper

Two significant developments in September will have a lasting positive impact on Canadian housing activity. First were Ottawa’s measures to make housing more affordable. Second was the Fed’s 50 basis point rate cut.

Ottawa has come under increasing pressure to reduce immigration, build more housing, and help first-time homebuyers afford to buy a home. In response, the federal government increased the home price cap for insured mortgages from $1 million to $1.5 million. This is the first time the home value limit has been raised since 2012.

This will allow many more home purchasers to buy with a smaller downpayment (10% rather than 20%) and 30-year amortizations (up from 25 years for non-insured mortgages).

  • A $1.5 million home will now require a $125,000 down payment (8.33%). That’s less than half the current $300,000 required ante (assuming the feds keep the minimum down payment tiers the same)
  • The maximum insurance premium on a $1.5 million purchase with 30-year amortization will now be $57,750 (again, assuming 10% down on any purchase price portion over $500,000).

This will significantly impact high-cost real estate markets such as Vancouver and Toronto, where the selling prices average $1.1 million in Toronto and $1.2 million in Vancouver. In addition, all insured new-build buyers can get 30-year amortizations, not just first-time buyers.

With mortgage rates falling rapidly, these measures will accelerate the growth in housing demand.

Also, the good news was the Federal Reserve’s 50 basis point rate cut, the first such cut in this cycle. Fifty is double the usual policy change increment. Such moves are typically reserved for emergency Fed meetings or clear and present liquidity threats. This opens the door for the Bank of Canada to have a super-sized rate cut in October or December. This bodes well for building home sales going into the all-important spring season.

Inflation has fallen considerably, and the Canadian unemployment rate has risen sharply. While retail sales for July showed a considerable rebound, it was mainly because of a surge in car sales. Nonetheless, spending growth pales in comparison to the population surge.

 

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. 

News Release – Department of Finance Canada

General Angela Calla 8 Oct

 

 

 

Deputy Prime Minister announces new actions to build secondary suites and unlock vacant lands to build more homes

News release

October 8, 2024 – Ottawa, Ontario – Department of Finance Canada

Across Canada, too many properties are underused or vacant—from unused basements, to empty office towers, to vacant lots—and could be used to build more homes. By making it easier for homeowners to add secondary suites to their existing homes, and unlocking vacant lands and underused federal properties for housing, we can build the supply of homes Canada needs to make housing more affordable for every generation.

Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, alongside the Honourable Jean-Yves Duclos, Minister of Public Services and Procurement, and the Honourable Terry Beech, Minister of Citizens’ Services, announced significant progress in the federal government’s work to unlock more land in our communities for housing.

Read the full article HERE

 

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 Clients Through Mortgage Changes

General Angela Calla 7 Oct

Navigating your clients through change to assist with homeownership goals

Recent changes in the housing market present exciting opportunities for homebuyers. As a realtor, your role is crucial in guiding clients through these updates, helping them build effective plans to achieve their homeownership goals by having them reach out to a mortgage broker to see what they are able to afford.

Knowing these new rules and guidelines will help with strategy and future goals of climbing the “real estate ladder.”

Expanded amortizations for first-time homebuyers

Starting December 15, first-time homebuyers will have access to 30-year amortizations. This change can benefit your clients in two significant ways:

1. Lower income requirement. By extending the amortization period, the income required to qualify for a home purchase decreases. This means more clients can meet the necessary criteria.

2. Reduced monthly payments. Clients will experience a decrease in their monthly payments, making homeownership more financially manageable. For instance, on a $600,000 purchase, the monthly payment could drop by approximately $250, providing greater flexibility in budgeting.

Increased insured mortgage cap to $1.5 million

For clients with high incomes but difficulties saving for a down payment, the increase in the insured mortgage cap to $1.5 million can accelerate their path to homeownership. Previously, purchasing a $1.4 million home required a down payment of $280,000. Now, as of December, clients can potentially purchase the same property with a down payment of about $115,000 — a savings of $165,000.00 in upfront requirements.

This change is also advantageous for “right-sizers” looking to downsize. It allows them to allocate more funds from the sale of their larger home toward retirement, as they can put less down on a new, smaller property. However, clients should keep in mind that closing costs, typically around 3.0 per cent of the purchase price, need to be accounted for in each scenario.

For a $600,000 purchase price, anticipate that clients will need an annual income of approximately $150,000 to meet today’s stress-test requirements.

Switching lenders at renewal: A business opportunity

While you may not initially think about how switching lenders can benefit your business, it’s essential to understand that mortgages encompass more than just interest rates. The Canadian Mortgage Charter now allows insured mortgage holders to switch lenders at renewal without undergoing a stress test. This change opens up opportunities for borrowers to shop around for better rates and terms, potentially saving them thousands of dollars.

Encourage your clients to consider lenders that don’t adhere to posted rates. This strategy can significantly reduce Interest Rate Differential (IRD) penalties.

Case in point

For example, let’s compare a $1 million mortgage with three years left on a five-year term at a 5.0 per cent interest rate:

Big bank Monoline lender
Original rate 5% 5%
Current rate 3.5% 3.5%
IRD penalty calculation (5% – posted 2%) x 3 years (5% – 3.5%) x 3 years
Total IRD penalty $55,000 $30,000

 

By choosing a monoline lender (provided qualifications are met), your client could save $25,000 in IRD penalties, allowing them to manage financial changes better and seize new opportunities.

Tax-efficient savings strategies

As well, two important tax-efficient savings methods have emerged that can empower your clients on their journey to homeownership:

1. RRSP withdrawal limit increase. The amount that can be withdrawn from an RRSP has increased from $35,000 to $60,000 per borrower. This change provides additional funds for clients to put toward their down payments.

2. First-time home saver account. Introduced in 2023, this account allows clients to save $8,000 per year in contribution room, which reduces their taxable income. Unlike RRSP withdrawals, funds from this account do not need to be repaid and any gains earned within it are tax-free. This account, however, has a sunset clause in 2028, making it vital for clients to act quickly to maximize its benefits.

These recent changes create valuable opportunities for your clients. By understanding the implications of expanded amortizations, increased mortgage caps, flexible lender options and tax-efficient savings strategies, you can help them make informed decisions on their path to homeownership.

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. 

 

BC mortgage market: What’s in store for the rest of 2024?

General Angela Calla 27 Sep

Falling interest rates have raised hopes of a market resurgence

Affordability struggles and eyewatering house prices may have weighed down homebuying activity in British Columbia over the past two years – but falling interest rates are set to spur a busier market for the remainder of this year and into 2025, with mortgage brokers already gearing up for that trend.

Residential sales across the Multiple Listings Service (MLS) in the province should jump by 4.4% by the end of the year, according to the British Columbia Real Estate Association (BCREA), and rise by over 10,000 units throughout 2025.

While the total inventory of available homes is now at its highest level since 2019 in the province thanks to tepid market activity during the first half of 2024, two summer rate cuts by the Bank of Canada – and the near certainty of more reductions before the end of this year – suggest better times are ahead for BC’s housing and mortgage markets.

Angela Calla (pictured, top left), a broker-owner based in Port Coquitlam, told Canadian Mortgage Professional that the Bank of Canada’s rate cuts (which marked the first time it had lowered rates for over four years) had boosted buyer sentiment noticeably. “We’ve seen renewed optimism,” she said, “and desire for education on different strategies. The increased engagement has been fantastic to increase Canadians’ financial literacy.”

How will further rate cuts impact the mortgage outlook?

Further cuts are on the horizon in the months ahead, with the Bank widely expected to lower its policy rate by a further 25 basis points when it meets next week (September 4).

That would bring its trendsetting interest rate to 4.25%, down from a 23-year high of 5% at the beginning of the summer, and it likely wouldn’t be the last cut the central bank makes in 2024.

Calla said a likely resurgence in market activity as rates fall means those buyers who can afford to get into the market now shouldn’t hold off. “If you’re considering a purchase, don’t wait until the rates go down further,” she said.

“More competition is coming in the marketplace. Buy and wait – don’t wait to buy, as prices will increase with a larger pool of buyers.”

For Vancouver-based broker Kyle Green (pictured, top right), the city is unlikely to see a big upswing in housing market activity before the end of the year. Still, that’s not to say buyers won’t face a potentially more challenging landscape, one that could see momentum swing back toward sellers.

That would buck a trend that’s emerged thanks to greater buyer choice and milder competition of late. “I believe Vancouver will be a relatively flat market,” Green told CMP, “potentially [seeing] some small declines in prices as the inventory has increased substantially.

“However, dropping rates may counterbalance this switch from a seller’s market to a buyer’s market which has only really been a recent phenomenon.”

Could variable rates become more appealing for buyers and homeowners?

The central bank’s recent pivot towards rate cuts doesn’t appear to have shifted sentiment in the mortgage market away from shorter-term variable options as the most popular choice among borrowers.

While rock-bottom variable rates during the COVID-19 pandemic saw many borrowers flock to those mortgage types, the Bank’s aggressive series of rate hikes throughout 2022 and 2023 meant they increasingly opted for two-to-three-year fixed options to keep their own rates steady.

Calla said that hasn’t changed markedly – not yet, at least. “Most are still gravitating towards fixed rates for a shorter term,” she said. “Variables are most attractive for very qualified borrowers with smaller-than-average mortgage amounts or those planning to sell in the next year.”

Green said his clients are also mostly inclined to go fixed, “but the tide is starting to turn right now.” The percentage of new business coming through the door and considering variable options, he said, is inching towards 50%.

Brokers should also be attuned, he said, to refinance potential for clients in the current market. “There seems to be a potential opportunity to refinance clients who took a three-year fixed in the second half of 2023,” he highlighted.

“Running the numbers, there seem to be surplus savings right now – [so] dig into your databases, brokers.”

 

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. 

September 2024 Newsletter

General Angela Calla 27 Sep

Welcome to the September issue of my monthly newsletter!
It is already September and I am excited to share my latest newsletter with you! This month, I have some details about the upcoming Fall market, along with expert tips for staging your home! Scroll down for all the details and have a great month.

2024 Fall Market Outlook

The initial Bank of Canada rate cuts this past summer did not spur housing activity as anticipated, but potentially more on the way will continue to affect the housing market outlook. New listing levels are expected to rise as sellers who may have held back enter the market with the hope that lower mortgage rates will attract additional buyers.

While the current Bank of Canada rate of 4.5% may still not be enough to make a dent in home affordability, it does provide a glimmer of hope for potential buyers as interest rates continue to fall.
Canadians across the country are anxiously awaiting additional rate cuts, promoting future home affordability. While consumer confidence is beginning to rise, mortgage affordability will need to be balanced with rising unemployment to reduce the number of households with strained budgets.
In addition, while home prices have cooled a bit, home prices in Canada remain among the highest in the world’s most advanced economies (Japan, France, Germany, Italy, and the UK). These still -high prices have resulted in many potential first-time home buyers to withdraw for now. Higher property taxes, higher qualifying stress-test rates, and the current wave of mortgage renewals will also factor into how successful the Fall market will be.
In 2023 alone, the country saw an influx of 46% of new Canadians, which also contributes to housing demands and pricing. As rates continue to drop, the hope is that prices will stabilize owing to increased supply as demand rises.
If you are looking to get into the housing market as a buyer or seller, or simply have questions so you can best prepare yourself for a future move, don’t hesitate to reach out to me!

Expert Tips for Staging Your Home

Even in a sellers’ market, there are some ways you can improve your chances of increasing the number of offers and selling your home for the best value.

Check out these expert tips for staging your home to help make the best first impression possible:

  1. Clean and Declutter: Clean, clean, and clean some more! While you might not be able to stage each room in your home, it is vital to ensure that each space is cleaned and decluttered. Especially ensure that counters, carpets, flooring, and appliances are spotless! This not only signals pride of ownership, but it helps display the potential of the spaces to buyers.
  2. Depersonalize: While you’re working through and cleaning your spaces, make sure to depersonalize along the way. Ideally, any family photos, kids’ drawings, etc, should be removed or replaced with more general photography to better appeal to potential buyers.
  3. Focus on Key Spaces: The primary areas in your home are your living room, kitchen, dining room, and master bedroom. If you are not able to get to each room, these are the ones you should focus on to ensure your home is represented as best as possible.
  4. Consider a Fresh Coat: Did you know? According to a RE/MAX Canada Renovation Investment Report, 36% of buyers prefer a fresh coat of paint! This can go a long way to making your home look new and revitalized.
  5. Boost Curb Appeal: While you’re staging your home, don’t forget about curb appeal! The exterior of your home is just as important as the interior – if not MORE important for first impressions. A good place to start would be renting a power washer to scrub down your driveway and exterior walls.

Economic Insights from Dr. Sherry Cooper

As the Bank of Canada cuts interest rates, housing activity has remained relatively weak. Existing home sales were well below historical averages in July, while new listings edged upward. Prices have plateaued, and residential mortgage originations are tepid.

Mortgage balances grew by 3% annually in Q2, the second slowest quarterly pace since 2000.

This portends a further dip in household debt-to-income ratios—welcome news, as elevated leverage drives household financial vulnerability. The central bank is widely expected to continue to cut the overnight policy rate at the remaining meetings this year and well into 2025. Monetary policy remains highly restrictive, with the policy rate at 4.5%, well above the 2.5% inflation rate.

We believe interest rates will continue to fall as the overnight rate heads for 2.75%. By later this year, housing activity is likely to pick up gradually.

In the meantime, Canadian homebuilding remains sturdy despite softness in the resale market and ongoing capacity pressures. Housing starts surged again in July. The data series is volatile, but the trend is strong at just under its recent all-time highs posted in 2021. The strength of residential starts has been dominated by multi-unit construction, while single-family starts have historically been very weak.

The home construction sector has suffered ongoing capacity pressures, including a shortage of construction workers, zoning restrictions and supply bottlenecks. These capacity pressures have delayed housing completions, bringing the number of dwellings under construction to fresh record highs.

Homebuilding has remained remarkably resilient, albeit at a much slower pace than the torrid population growth. The government plans to cool the growth in temporary immigration, but the Bank of Canada recently suggested that the slowdown is likely to be delayed and smaller than originally projected.

Meanwhile, Canadian labour markets are easing. Job vacancy rates have plunged, and unemployment has risen, especially for young workers and new immigrants.

Economic growth has slowed to about 1% this year and will pick up only moderately next year. Inflation is falling without a recession. To be sure, some sectors have slowed meaningfully, especially manufacturing. Canadian businesses are bracing for billions of dollars in losses if the country’s two national railways shut down this week.

More than 9,000 workers at Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. could either be on strike or locked out if no labour agreement is reached by Thursday, disrupting the supply chain industries.

Housing markets will begin to recover as lower interest rates do their job this fall.

 

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. 

 

 

August 2024 Newsletter

General Angela Calla 27 Sep

Welcome to the August issue of my monthly newsletter!
I hope you’ve had a fantastic summer so far! This month, I am excited to give you some tips on paying off your mortgage faster. Plus, learn my favourite ways to cut energy costs and save. Scroll down for all the details and have a great month!

How to Pay Off Your Mortgage Faster

When it comes to homeownership, many of us dream of the day we will be mortgage-free. While most mortgages operate on a 25-year amortization schedule, there are some ways you can pay off your mortgage quicker!

Did you know? There are a few ways you can help pay off your mortgage faster

For example – switching to an accelerated bi-weekly payment schedule, increasing your monthly mortgage payments to pay more to the principal, making extra payments on your mortgage, negotiating a better rate, or refinancing to a shorter amortization period!

Let’s take a look at the options and how they work:

  1. Review Your Payment Schedule: Taking a look at your payment schedule can be an easy way to start paying down your mortgage faster, such as moving to an accelerated bi-weekly payment schedule. While this will lead to slightly higher monthly payments, the overall result is approximately one extra payment on your mortgage per calendar year. This can reduce the total amortization by multiple years, which is an effective way to whittle down your amortization faster.
  2. Increase Your Mortgage Payments*: This is another fairly simple change you can execute today to start having more of an impact on your mortgage. Most lenders offer some sort of pre-payment privilege that allows you to increase your payment amount without penalty. This payment increase allowance can range from 10% to 20% payment increase from the original payment amount. If you earned a raise at work, or have come into some money, consider putting those funds right into your mortgage to help reduce your mortgage balance without you feeling like you are having to change your spending habits.
  3. Make Extra Payments*: For those of you who have pre-payment privileges on your mortgage, this is a great option for paying it down faster. The extra payment option allows you to do an annual lump-sum payment of 15-20% of the original loan amount to help clear out some of your loans! Some mortgages will allow you to increase your payment by this pre-payment privilege percentage amount as well. This is another great way to utilize any extra money you may have earned, such as from a bonus at work or an inheritance.
  4. Negotiate a Better Rate: Depending on whether you have a variable or a fixed mortgage, you may want to consider looking into getting a better rate to reduce your overall mortgage payments and money to interest. This is ideally done when your mortgage term is up for renewal and with rates starting to come back down, it could be a great opportunity to adjust your mortgage and save! This may be done with your existing lender OR moving to a new lender who is offering a lower rate (known as a switch and transfer).
  5. Refinance to a Shorter Amortization Period: Lastly, consider the term of your mortgage. If you’re mortgage is coming up for renewal, this is a great time to look at refinancing to a shorter amortization period. While this will lead to higher monthly payments, you will be paying less interest over the life of the loan. If you’re interested in this, connect with me today so we can calculate if it is worthwhile for you to take advantage! Knowing what you can afford and how quickly you want to be mortgage-free can help you determine the best new amortization schedule.

*These options are only available for some mortgage products. Check your mortgage package or reach out to me to ensure these options are available to you and avoid any potential penalties.

If you’re looking to pay your mortgage off quicker, don’t hesitate to call me to go over your options in more detail today!

Smart Ways to Cut Your Energy Costs

In the last decade, climate change and energy efficiency have become top of mind for many Canadians. From wanting to do our part by recycling to making our home as energy efficient as possible, there are so many benefits to being environmentally and energy conscious.

If you are looking to cut costs or simply want to reduce your eco-footprint, here are some great ways to cut your energy costs:

  • Get a Smart Thermostat: A pretty easy installation, a smart thermostat can help you better manage your in-home temperature. Whether you opt to install a basic programmable thermostat or try Google’s Nest, which learns from you and works to predict which temperatures you prefer and when, getting a read on your in-home temperature can help you better manage your energy usage.
  • Look for Drafty Spots: When it comes to heating your home, it can quickly become a wasted effort and results in extra costs if you have drafts in your home. In addition to windows and doors, you should also seal any folding attic stairs, add a fireplace plug to seal the damper and install a dryer vent seal to reduce drafts in your laundry room.
  • Swap to LEDs: Most of us are already using LED bulbs throughout our home. If you aren’t yet, now is the time to make the switch! LED bulbs use 15% less energy than an equivalent incandescent, which can save you a ton of money each month especially in larger homes.
  • Turn Down Your Water Heater: While sometimes nothing beats a good scalding shower, you don’t want to be burned with a high energy bill. Did you know if you knock down that temperature gauge by just 10 degrees, you can save 3% to 5% on your bills each month!?
  • Examine Your Appliances: Since 1992, ENERGY STAR® has been backing energy efficient appliances and products, helping consumers make the right choices. Some of the least green appliances in your home are your dishwasher, washing machine, dryer and refrigerator and, if you don’t currently have Energy Star certified versions of these machines, swapping to them is a surefire way to reduce your monthly expenses.Can’t afford new appliances? Here are some other tips and tricks to help make them more efficient in the meantime:
    • Dishwasher: Use a citric acid-based cleaner in an empty cycle to rid your dishwasher of excess soap and calcium buildup that may be causing your machine to work harder.
    • Washing Machine: Maximize energy by stuffing your machine to the brim whenever possible as washing machines typically use the same amount of energy regardless of load size.
    • Dryer: For starters, ensure you are always cleaning out your lint filter to increase air circulation. In addition, keep an eye on the outside exhaust and clean when needed to reduce drying time and save energy.
    • Refrigerator: While most of us are more concerned with the food inside our fridges than the parts, it is important to check your condenser coils. Over time, dirt, food particles and dust can collect and reduce the efficiency. Another tip is to set your refrigerator to 2-3 degrees Celsius.
  • Close The Blinds: When the temperature starts heating up, it is important to close the blinds and drapes to prevent the sun from beating in and warming up your home. The excessive heat makes your air conditioner work overtime causing your energy bills to skyrocket.

In addition to the cost savings and environmental benefits of improving your energy efficiency, CMHC also has a rebate available! The CMHC Eco Plus refund can provide a 25% partial premium refund if you’re CMHC insured and buying or building an energy-efficient home! Click here for more details.

Economic Insights from Dr. Sherry Cooper

All eyes were on The Bank of Canada last month as they cut interest rates by 25 basis points again during their July 24th meeting, thereby taking the overnight policy rate down to 4.5%.

We believe that owing to a sustained deceleration in inflation, the central bank will continue its monetary easing at the September and December meetings and well into next year.

The policy rate will likely fall to 2.75% next year, reducing the burden of higher monthly mortgage rates on renewals in the next 18 months.

The influx of roughly 2 million immigrants to Canada has raised overall consumer spending, averting a recession this year, but GDP per capita continues to decline.

Labour markets continue to soften as job vacancies have fallen sharply, and the jobless rate has risen from 4.9% to 6.4%. The latest business and consumer surveys have suggested that inflation expectations have fallen and wage inflation—a lagging indicator—will soon decline. Companies expect to cut their spending on machinery and equipment, and commercial real estate valuations have fallen owing to the sharp rise in office vacancy rates.

Housing market activity has slowed with the run-up in interest rates from March 2022 until June 2024. Lower interest rates will spur transactions and increase new listings next year. Housing affordability will improve as price pressures remain muted. The housing shortage, however, will likely mitigate the improvement, particularly as the shortage of experienced construction workers impedes rapid housing supply increases.

 

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. 

 

Banking Regulator to Relax Stress-Test

General Angela Calla 25 Sep

Banking regulator to relax stress-test rules for homeowners switching lenders at mortgage renewal.

Canada’s banking regulator is set to relax mortgage rules for homeowners who switch banks when they renew their loans.

The Office of the Superintendent of Financial Institutions (OSFI) will no longer require banks to apply the mortgage stress test on borrowers who switch lenders if they are simply renewing their loan, the regulator told The Globe and Mail on Wednesday.

The change, which is due to take effect Nov. 21, will make it easier for borrowers with uninsured mortgages to move to a different bank at renewal. It is also expected to motivate banks to offer cheaper mortgage rates in order to retain their current borrowers and attract new customers.

The change marks a significant win for the mortgage industry, which had been pushing for this relief in the face of rising interest rates.

When borrowers take out their initial mortgage, they must pass the federal mortgage stress test or prove they have enough income to cover their mortgage payments at an interest rate that is two percentage points higher than their actual loan contract.

When the mortgage term ends and they have to renew their loan, borrowers must again pass the mortgage stress test if they want to switch to a different lender because the borrower is new to that lender. That rule stands even if the renewal is a “straight switch,” which means the borrower will remain on the same amortization schedule and is not lengthening the time they will take to pay off their mortgage or increasing the amount of their loan.

But because mortgage rates more than doubled over the past two years to above 6 per cent at their height, borrowers had to prove they could make their loan payments with an interest rate of at least 8 per cent. That made it much more difficult for uninsured borrowers to pass the stress test if they renewed with a different lender.

“There isn’t reckless underwriting in straight switches,” OSFI Superintendent Peter Routledge said in an interview.

Currently, homeowners with insured mortgages are exempt from the mortgage stress test on straight switches because the insurer is protecting the bank if the homeowner misses mortgage payments. (A borrower must pay for mortgage insurance if they have made a down payment that is less than 20 per cent of the property’s purchase price.) But until now, borrowers with uninsured mortgages have still had to requalify if they switched lenders.

The difference in rules between insured and uninsured borrowers is one of the reasons that OSFI decided to make the change. “If I were that Canadian walking in with an uninsured mortgage, I kind of feel like that was an imbalance that wasn’t fair,” Mr. Routledge said. “Part of our job is to enable banks and lenders to take reasonable risks. And part of that reasonable risk-taking may involve treating an uninsured mortgager at renewal for a straight switch the same as an insured,” he said.

OSFI’s decision to eliminate the stress test on straight switches is occurring as the federal government relaxes other mortgage policies. Buyers will soon be allowed to put down smaller down payments on homes worth more than $1-million and first-time homebuyers will be allowed to stretch out their mortgage payments over 30 years instead of 25 on an insured mortgage.

Mr. Routledge said he does not think OSFI’s latest change will have any effect on the mortgage market credit risk or the housing market. He said the regulator has data showing that homeowners overwhelmingly stay with their lender when they renew their mortgages, which was also the case before mortgage stress test went into effect in 2018 for uninsured mortgages.

“I don’t view this as having discernible effect one way or the other,” he said.

The stress test has two thresholds: a minimum qualifying rate, or MQR, that is set by the regulator and an interest rate that is two percentage points higher than the borrower’s mortgage contract. The lender must use the higher interest rate to stress test the borrower. Since the MQR is currently set at 5.25 per cent, it is effectively obsolete because mortgage rates are currently around that level.

(Article courtesy of Rachelle Younglai, Real Estate Reporter)

 

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. 

Attainable Housing Initiative Heather Lands

General Angela Calla 25 Sep

The Attainable Housing Initiative (AHI or Initiative) provides approximately 2,600 strata leasehold homes at an initial 40 percent below market value at the Heather Lands in Vancouver.

The Initiative is intended to provide homes that middle-income, first-time homebuyers can own themselves and live in. It is not intended as an investment vehicle, to generate homes for rent, or to benefit households living outside of B.C.

Read more HERE.

 

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. 

ENHANCE Your Expertise: IRD Penalties

General Angela Calla 25 Sep

In today’s ever-changing mortgage environment, we understand the challenges, especially when it comes to understanding as a clients the intricacies of Interest Rate Differential (IRD) penalties. We’re here to support you every step of the way. Our products that we offer you before we go to one of the big banks are designed to not only meet your immediate needs but also to protect your long-term financial interests. One way we do this look at monoline lenders with a fair IRD penalty calculation.

Take this example:  one of the big banks has offered you a rate 10 bps lower than what you have been discussing with a mortgage broker. But that lender uses discounted rates. Before you start thinking THIS IS ALL ABOUT THE RATE  learn how the math impacts your future if you are like 7/10 Canadians that will look to break there mortgage for a variety of reasons either with the market or your personal lifestyle on what that lower rate could mean later if they need to break their mortgage in two years:

Let’s compare:

 Client has a slightly lower payment with the other lender and saves about $780 in interest over the two years.
But when they need to break their mortgage, client penalty costs are $23K+ higher.
Client wanted to break the mortgage to take advantage of lower rates. However, due to the high penalty, it doesn’t make sense for the clients to break their term. They are forced to stay with the other lender.
At the end of the term with the other lender, clients will end up with higher interest costs + higher payments for the last 3 years of the term.

How can you avoid costly mistakes and gain Penalty Protection?

  • Understand The Journey – Assess both immediate needs and future financial goals, ensuring you always covered.
  • Understand with Confidence – Life is unpredictable, and most clients will need to break their mortgage. A slightly higher monthly payment can act as insurance against hefty penalties helps protect financial well-being.
  • Leverage Our Expertise – We provide you with extensive product knowledge and transparent penalty information, so you can confidently be guided through any scenario.
  • Review  a Visual – Utilize impactful tools like penalty comparisons that not only make the math clear, but helps you understand the conversation beyond just rates.
  • Keep the Conversation Going – Your Mortgage Broker is here to support you as an expert resource, empowering you with timely and accurate information, ensuring they feel secure in every decision. We advise and you the client always instructs.

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. 

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