January 2025 Newsletter

General Angela Calla 4 Feb

Welcome to the January issue of my monthly newsletter!
Happy New Year!
This month, I wanted to take a look at what is in store for us for the housing market as we head into 2025. Plus, I have some tips to help kick your financial health into gear for the next twelve months! Scroll down for all the details.

Market Outlook for 2025

It’s a new year and as we gear up for the upcoming Spring season, it is a good idea to take a look at the market outlook and what we are expecting to see around housing sales, prices, interest rates, and how these current conditions affect buyers versus sellers!

Let’s dive into the Canadian Real Estate Association Forecast and more:

National Trends

  • Housing Sales: National home sales are expected to increase by 6.6% in 2025, reaching approximately 499,800 units as interest rates continue to decline, drawing buyers back into the market. This follows a modest 5.2% increase in 2024.
  • Housing Prices:On a national level, Canada’s housing market is expected to see a 4.4% increase in home prices in 2025, reaching an average of $713,375. This follows a more modest 0.9% increase in 2024. The national growth is tempered by regional differences, with areas like Toronto and Vancouver seeing higher price levels due to ongoing demand, while more affordable regions like Quebec may see more moderate growth.
  • Rising Demand: Canada’s housing market remains competitive, with demand continuing to rise in urban centers and suburban areas due to factors like population growth, economic recovery, and strong immigration.
  • Interest Rates: The Bank of Canada’s policy on interest rates continues to play a central role in shaping the housing market. While rates were higher through 2023 and part of 2024, they are expected to continue declining in 2025, which should ease affordability constraints and encourage more buyer activity.

Regional Highlights

Greater Toronto Area (GTA)

  • Housing Prices:The average home price in the GTA reached $1,135,215 in October 2024, reflecting a 0.8% increase year-over-year and 2.5% monthly growth. The City of Toronto itself saw a 3.4% increase, signaling continued demand despite higher prices. Areas like Mississauga and Brampton show mixed price trends, with Mississauga seeing a slight decline of 2.2% year-over-year, while Brampton experienced a 2.0% increase. These fluctuations reflect demand in more affordable areas within the GTA.
  • Rising Demand: Toronto remains one of Canada’s most sought-after markets, driven by its status as a global financial hub and growing tech sector. Suburbs like Mississauga, Brampton, and York Region are seeing rising interest as buyers seek more affordable options. Ontario’s strong job market and immigration influx contribute to population growth, further boosting demand. While some cooling has been seen due to high home prices, the overall demand remains robust, especially for entry-level homes.
  • Interest Rate Impact: Rates are expected to decrease into 2025 increasing buyer demand. Despite higher rates over the last two years, Toronto remains a seller’s market in many areas, though buyers will benefit from more favorable conditions as rates decline.

Greater Vancouver

  • Housing Prices: Vancouver has experienced a slight decline in average home prices, down 0.2% year-over-year in 2024, with prices hovering around $1,250,329. However, Vancouver remains one of Canada’s priciest markets, and some recovery is expected as the market adjusts. While the downtown core sees slower price growth, suburban areas in the Lower Mainland, such as Richmond and Surrey, continue to see moderate price increases, as these areas offer better affordability and space.
  • Rising Demand: Vancouver’s appeal remains strong for both domestic buyers and international investors, particularly in tech, entertainment, and natural resources sectors. Despite price stagnation, demand continues for detached homes and more spacious properties as residents seek to balance living costs with quality of life. Vancouver also benefits from significant immigration, and the city continues to diversify economically, drawing both residents and investors who are fueling demand in the housing market.
  • Interest Rate Impact: Like Toronto, Vancouver has been affected by the Bank of Canada’s interest rate hikes, which have increased borrowing costs and cooled market activity. The rate hikes have caused some slowdown, but the region is expected to see a modest recovery in 2025 with interest rate cuts. As rates decline, Vancouver may experience more balanced market conditions, with higher demand for detached homes in suburban areas and some recovery in the more expensive core areas.

Quebec:

  • Housing Prices:The province has seen steady growth in home prices, with Montreal, in particular, experiencing an 8.9% year-over-year price increase as of October 2024, reaching an average home price of $630,063. While Quebec’s growth is generally more moderate compared to Ontario and British Columbia, the relative affordability of homes in many areas still offers opportunities for buyers compared to more expensive regions like Toronto or Vancouver.
  • Rising Demand: Montreal’s job market, particularly in technology and aerospace, continues to attract young professionals, which fuels housing demand. The province also benefits from ongoing immigration, contributing to population growth, which supports housing demand.
  • Interest Rate Impact: Like the rest of Canada, Quebec will see easing interest rates in 2025, which should help to bolster market activity. However, since prices have risen significantly over the past decade, some buyers in Quebec, particularly first-time buyers, may still face affordability challenges, albeit less severe than in major cities like Toronto.

Expectations for Buyers

  1. Affordability Challenges: While interest rates are expected to decline gradually, the impact of high housing prices in major cities like Toronto and Vancouver will still be a challenge for many buyers. However, some relief is anticipated as lower rates could ease monthly mortgage payments.
  2. Opportunity in the Suburbs: Suburban areas are projected to see more price stability and may be more attractive to first-time buyers and those looking for better value for money. Areas like Mississauga, Brampton, and Ottawa are seeing mixed price changes, making them viable alternatives to the high-cost core regions.
  3. More Inventory: A growing number of homes available for sale could give buyers more choice, but competition may still exist in certain markets due to demand returning as rates ease.

Expectations for Sellers

  1. Tight Timing: Sellers in 2025 will likely benefit from a surge in demand in the spring and summer, driven by the stabilization or decline of interest rates. However, selling in a market with increased inventory may require competitive pricing.
  2. Realistic Pricing: With the market expected to shift towards more buyer-friendly conditions, sellers will need to adjust expectations and price their homes carefully. Those listing too high might face longer waiting periods.
  3. Stronger Negotiation Power in Suburbs: Sellers in high-demand, low-inventory areas (especially in suburban regions) may still enjoy more favorable conditions and could see prices rise or remain stable.

Key Takeaways for 2025

  1. Recovery Driven by Rate Cuts: Declining interest rates are anticipated to accelerate both sales activity and price growth in the latter half of 2025.
  2. Regional Disparities: While Vancouver and Toronto remain expensive, other regions like Montreal and Ottawa offer growth potential due to relative affordability and robust economic conditions.
  3. Inventory and New Construction: Higher inventory levels may moderate price increases in some areas, but affordability concerns and economic factors will shape regional market dynamics.

Overall, 2025 will likely be a year of transition with benefits to both buyers and sellers as the market continues to stabilize.

Looking to purchase or renew your mortgage this year? Don’t hesitate to reach out to me

Kickstart Your Year:
5 Steps to Improve Your Financial Health

Improving your financial health is essential for long-term stability and peace of mind.

STEP 1: This starts with creating a budget and sticking to it. Begin by tracking your income and all expenses for at least a month to understand where your money is going.

  • Categorize your spending into essentials (housing, utilities, groceries) and non-essentials (entertainment, subscriptions). Use this information to set realistic spending limits and prioritize needs over wants.
  • Apps and tools can also make budgeting easier and more effective.

STEP 2: Next is to build an emergency fund. Life is unpredictable, and having a financial cushion can prevent setbacks from turning into crises.

  • Aim to save 3–6 months’ worth of living expenses, but don’t be discouraged if that feels daunting.
  • Start small, even $10–$20 from each paycheck, and automate your savings to ensure consistency. Over time, these small contributions will grow into a safety net.

STEP 3: Debt can be a significant barrier to financial health, so it’s crucial to pay down debt strategically. High-interest debt, like credit cards and payday loans, should be your top priority, as it compounds quickly and can drain your resources.

  • Use strategies such as the snowball method (paying off the smallest debts first for psychological wins) or the avalanche method (focusing on the highest-interest debts to save money overall). Whichever method you choose, ensure you make at least the minimum payments on all debts to avoid penalties.

STEP 4: Another vital component of financial health is to invest in your future.

  • Begin contributing to retirement accounts, such as an RRSP if your employer offers one, especially if there’s a company match—it’s essentially free money.
  • If an RRSP is not an option, consider a high-interest savings account.
  • Beyond retirement, explore low-risk investments, which can grow your wealth steadily over time. Even small, consistent contributions can lead to significant returns thanks to compound interest.

STEP 5: It’s essential to regularly review and adjust your financial plan. Financial needs and goals evolve, so take time annually—or after major life events like a new job, marriage, or a baby—to reassess.

  • Review your budget, savings, investments, and debt repayment progress. Adjust your plan as needed to stay on track and adapt to changes.
  • Regular check-ins help you stay proactive and maintain momentum toward your goals.

Financial health is a journey, not a destination. Consistency, patience, and smart planning will lead you to long-term stability and financial freedom. Remember, even small steps make a big difference over time!

Economic Insights from Dr. Sherry Cooper

There is an unprecedented disparity between the economic and financial situation in the US and Canada. The Canadian economy is far more interest-sensitive than the US and, therefore, slowed more dramatically in response to the Bank of Canada’s restrictive policy to bring inflation back to its 2% target level.

The jobless rate in Canada has reached 6.5%, well above the level in the US, and job vacancy rates have plummeted. Wage inflation has been sticky at 4.9% but will likely edge downward in response to excess supply in the labour market.

Inflation accelerated to 2% y/y in October, compared to the cycle-low 1.6% in September, mainly because gasoline price deflation slowed. The odds of another 50 bps rate cut by the central bank—on the heels of a jumbo cut in October—have diminished, but a 25 bps cut is in the bag.

Market-driven interest rates in Canada are well below those in the US, owing to weaker economic activity and lower inflation. US interest rates surged on the news of the Trump election victory. Ten-year US Treasury yields rose sharply to a post-election high of nearly 4.5% on the presumption that with a Republican majority in the House and the Senate, Trump will move ahead with tax cuts, tariffs and deregulation. Trump has also threatened to limit the independence of the Federal Reserve.

Canadian long-term yields have risen far less since the election. Short-term interest rates are also lower in Canada than in the US. The Bank of Canada has eased monetary policy four times for a total decline in the overnight policy rate of 175 bps, compared to only one rate cut of 50 bps by the Fed. This unprecedented divergence bodes well for a rebounding housing market in Canada.

Housing activity picked up in October and early November in response to the surge in new listings, giving potential buyers a broader range of choices and lower interest rates. The steepening yield curve portends more significant declines in variable mortgage rates—tied to the prime rate, which declines with every cut in the overnight rate, than fixed rates, which move with longer-term bond yields.

The Bank of Canada, concerned about a weakening Canadian economy, will continue to cut the overnight rate at every meeting between now and mid-2025. By then, the policy rate will be roughly 2.5%, half the level at the peak in BoC tightening. This will likely trigger a robust spring housing season.

There is plenty of pent-up activity in the Canadian housing market as buyers have waited for lower interest rates and home prices, and sellers have been reticent to list their properties, hoping for a housing recovery. This is beginning to turn around as every easing move by the Bank of Canada boosts economic activity, particularly in the interest-sensitive housing sector.

 

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. 

The Bank of Canada Cuts The Overnight Rate By 25 Bps

General Angela Calla 29 Jan

Bank of Canada Cuts Policy Rate By 25 BPs

The Bank of Canada (BoC) reduced the overnight rate by 25 basis points this morning, bringing the policy rate down to 3.0%. The market had anticipated a nearly 98% chance of this 25 basis point reduction, and consensus aligned with this expectation. The Federal Reserve is also set to announce its rate decision this afternoon, where it is widely expected to maintain the current policy rate. As a result, the gap between the US Federal Funds rate and the BoC’s overnight rate has widened to 150 basis points. This discrepancy is largely attributed to stronger growth and inflation in the US compared to Canada. Consequently, Canada’s relatively low interest rates have negatively impacted the Canadian dollar, which has fallen to 69.2 cents against the US dollar. Additionally, oil prices have dropped by five dollars, now at US$73.61.

The Bank also announced its plan to conclude the normalization of its balance sheet by ending quantitative tightening. It will restart asset purchases in early March, beginning gradually to stabilize and modestly grow its balance sheet in alignment with economic growth.

The projections in the January Monetary Policy Report (MPR) released today are marked by more-than-usual uncertainty due to the rapidly evolving policy landscape, particularly the potential threat of trade tariffs from the new administration in the United States. Given the unpredictable scope and duration of a possible trade conflict, this MPR provides a baseline forecast without accounting for new tariffs.

According to the MPR projections, the global economy is expected to grow by about 3% over the next two years. Growth in the United States has been revised upward, mainly due to stronger consumption. However, growth in the euro area is likely to remain subdued as the region faces competitiveness challenges. In China, recent policy actions are expected to boost demand and support near-term growth, although structural challenges persist. Since October, financial conditions have diverged across countries, with US bond yields rising due to strong growth and persistent inflation, while yields in Canada have decreased slightly.

The BoC press release states, “In Canada, past cuts to interest rates have begun to stimulate the economy. The recent increase in both consumption and housing activity is expected to continue. However, business investment remains lackluster. The outlook for exports is improving, supported by new export capacity for oil and gas.

Canada’s labor market remains soft, with the unemployment rate at 6.7% in December. Job growth has strengthened in recent months after a prolonged period of stagnation in the labor force. Wage pressures, previously sticky, are showing some signs of easing.

The Bank forecasts GDP growth to strengthen in 2025. However, with slower population growth due to reduced immigration targets, both GDP and potential growth will be more moderate than previously anticipated in October. Following a growth rate of 1.3% in 2024, the Bank now projects GDP to grow by 1.8% in both 2025 and 2026, slightly exceeding potential growth. As a result, excess supply in the economy is expected to be gradually absorbed over the projection horizon.

CPI inflation remains close to the 2% target, though with some volatility stemming from the temporary suspension of the GST/HST on select consumer products. Shelter price inflation remains elevated but is gradually easing, as anticipated. A broad range of indicators, including surveys on inflation expectations and the distribution of price changes among CPI components, suggests that underlying inflation is near the 2% target. The Bank forecasts that CPI inflation will remain around this target over the next two years.

Aside from the potential US tariffs, the risks surrounding the outlook appear reasonably balanced. However, as noted in the MPR, a prolonged trade conflict would most likely result in weaker GDP growth and increased prices in Canada.

With inflation around 2% and the economy in a state of excess supply, the Governing Council has decided to further reduce the policy rate by 25 basis points to 3%. This marks a substantial (200 bps) cumulative reduction in the policy rate since last June. Lower interest rates are expected to boost household spending, and the outlook published today suggests that the economy will gradually strengthen while inflation remains close to the target. Nevertheless, significant and widespread tariffs could challenge the resilience of Canada’s economy. The Bank will closely monitor developments and assess their implications for economic activity, inflation, and monetary policy in Canada. The Bank is committed to maintaining price stability for Canadians. Nevertheless, significant and widespread tariffs could challenge the resilience of Canada’s economy. The Bank will closely monitor developments and assess their implications for economic activity, inflation, and monetary policy in Canada. The Bank is committed to maintaining price stability for Canadians.

 

 

 

 

Bottom Line

The central bank dropped its guidance on further adjustments to borrowing costs as US President Donald Trump’s tariff threat clouded the outlook.

Bonds surged as the market absorbed the central bank’s decision not to guide future rate moves. The yield on Canada’s two-year notes slid some four basis points to 2.79%, the lowest since 2022. The loonie maintained the day’s losses against the US dollar.

In prepared remarks, Macklem said while “monetary policy has worked to restore price stability,” a broad-based trade conflict would “badly hurt” economic activity but that the higher cost of goods “will put direct upward pressure on inflation.”

“With a single instrument — our policy rate — we can’t lean against weaker output and higher inflation at the same time,” Macklem said, adding the central bank would need to “carefully assess” the downward pressure on inflation and weigh that against the upward pressure on inflation from “higher input prices and supply chain disruptions.”

In the accompanying monetary policy report, the central bank lowered its forecast for economic growth in 2025 due to the federal government’s lower immigration targets. The bank expects the economy to expand by 1.8% in 2025 and 2026, down from 2.1 and 2.3% in previous projections. The central bank trimmed business investment and exports estimates but boosted its consumption forecast.

The bank estimated that interest rate divergence with the Federal Reserve was responsible for about 1% of the depreciation in the Canadian dollar since October.

We expect the BoC to continue cutting the policy rate in 25-bps increments until it reaches 2.5% this Spring, triggering continued strengthening in the Canadian housing market.

Article courtesy of Dr. Sherry Cooper, Chief Economist, DLC

 

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 What you NEED to know Variable & Adjustable Rate Mortgages

General Angela Calla 27 Jan

In case you missed our Global News Morning segment we discussed a topic that is top of mind for many: variable and adjustable rate mortgages.

In this approx. 6 minute interview we covered…

-What exactly are variable and adjustable rate mortgages?

-The key differences between the two.

-Critical terms and factors to consider when choosing the best option for you.

If you ever wondered how these mortgage options work or how to make the most informed decision, this segment is a must-watch!

We are here to or provide a personalized review of a mortgage for you or a loved one to ensure it works for you in today’s market to build and protect your wealth please email us at callateam@countoncalla.ca or call 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. 

Fall Economic Statement Delivered Despite Chrystia Freeland’s Resignation

General Angela Calla 18 Dec

 
Chrystia Freeland Resigns On The Day of The Fall Economic Statement
Finance Minister Freeland rocked markets today by submitting her resignation from Cabinet. Trudeau had asked her to take another Cabinet post, but she declined in a scathing letter accusing Trudeau of “costly political gimmicks” like “bribe-us-with-our-own-money cheques for $250 and a two-month GST holiday.

“Inevitably, our time in government will come to an end,” Ms. Freeland said, openly acknowledging what polls have been saying for over a year. “But how we deal with the threat our country currently faces will define us for a generation, and perhaps longer.”

The Federal deficit for 2023-2024 grows from $40 billion to $61.9 billion, partly boosted by a court settlement to pay funds to Indigenous children. The deficit far surpasses Freeland’s guardrail of $40.1 billion for last year’s budget deficit. New spending initiatives were announced amounting to $24 billion over the next six years. The most significant component is accelerated incentives to encourage business investment to improve productivity. This is very similar to a program issued by Finance Minister Frank Morneau years ago.

Dominic LeBlanc has been sworn in as the new Finance Minister.
Bottom Line

Today’s Fall Economic Statement took a backseat to the news that Chrytia Freeland resigned. There is more talk of a Trudeau resignation and an early election. Liberals are suggesting that Trudeau has stayed on too long, likening him to Biden. The caucus is meeting at 5 PM today.
Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres
drsherrycooper@dominionlending.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. 

 

Canadian home sales rose again in November as new listings declined and prices rose

General Angela Calla 18 Dec

The Canadian Housing Market Strengthens Further

Home sales activity recorded over Canadian MLS® Systems rose again in November, building on October’s surprise jump.

Sales were up 2.8% m/m in November compared to October and now stand a cumulative 18.4% above where they were in May, just before the first interest rate cut in early June. Actual (not seasonally adjusted) monthly activity was 26% above November 2023.

The November increase was driven by gains in Greater Vancouver, Calgary, Greater Toronto, and Montreal and double-digit sales increases in smaller cities in Alberta and Ontario.

According to Shaun Cathcart, CREA’s Senior Economist, “Not only were sales up again but with market conditions now starting to tighten up, November also saw prices move materially higher at the national level for the first time in almost a year and a half. Normally, we might expect this market rebound to take a pause before resuming in the spring; however, the Bank of Canada’s latest 50-basis point cut together with a loosening of mortgage rules could mean a more active winter market than normal.”

New Listings

New listings edged down 0.5% month-over-month in November, building on a larger 3% decline in October. With sales also rising in November, the national sales-to-new listings ratio tightened to 59.2%, up from 57.3% in October. Between April and September this year, the measure had been in the 52% to 53% range. The long-term average for the national sales-to-new listings ratio is 55%, with a sales-to-new listings ratio between 45% and 65%, generally consistent with balanced housing market conditions.

“October and November marked the start of the long-awaited rebound in resale housing activity, with the combination of lower borrowing costs and more properties to choose from coaxing buyers off the sidelines,” said James Mabey, CREA Chair.

A little more than 160,000 properties were listed for sale on all Canadian MLS® Systems at the end of November 2024, up 8.9% from a year earlier but still below the long-term average for that time of the year of around 178,000 listings.

There were 3.7 months of inventory nationally at the end of November 2024, down from 3.8 months at the end of October and the lowest level in 14 months. The long-term average is 5.1 months of inventory, with a seller’s market below about 3.6 months and a buyer’s market above 6.5 months.

 

 

 

 

Home Prices

The non-seasonally adjusted National Composite MLS® HPI stood 1.2% below November 2023, the smallest decline since last April. The non-seasonally adjusted national average home price was $694,411 in November 2024, up 7.4% from November 2023.

 

Bottom Line

The Bank of Canada’s aggressive rate-cutting and regulatory changes that make housing somewhat more affordable have provided kindling for the Canadian housing market. While the conflagration isn’t likely to peak until spring, a seasonally strong period for housing, activity has already started to pick up. The November uptick in home prices could provide more impetus for potential buyers to move off the sidelines. The new housing initiatives go into effect today and tomorrow.

Debt-to-income ratios for Canadian households have improved as growth in disposable incomes continues to outpace borrowing. This bodes well for more robust residential real estate activity as the Bank of Canada continues to cut rates, albeit at a slower pace. We expect quarter-point rate cuts until the overnight rate, now at 3.25%, falls to 2.5% or even lower if US tariffs are introduced.

Article Courtesy of Dr. Sherry Cooper, Chief Economist, DLC

 

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. 

With rates going down, should I take an adjustable rate Mortgage?

General Angela Calla 16 Dec

Navigating the mortgage market requires more than choosing between a fixed or adjustable rate. Over my 20 years in this industry, I’ve seen how markets and lenders adapt in ways consumers might not expect. Adjustable rates can be a VERY powerful tool, but they come with complexities that borrowers must fully understand before committing.

Our approach at the Angela Calla Mortgage Team is not to say adjustable rates are bad or banks are at fault. Instead, we work to empower borrowers by presenting all qualified options and using our experience to help them make confident, informed decisions they’re comfortable with. For instance, adjustable and variable-rate mortgages often come with significant advantages such as large discounts, low compounding frequencies, and only three months of interest for penalties, as well as the flexibility to easily lock into fixed rates when needed.

Here are some important lessons from recent history that highlight the factors borrowers need to consider:

2015: BoC Rate Cuts That Didn’t Fully Benefit Borrowers

In January and July 2015, the Bank of Canada (BoC) reduced its overnight rate twice, by 0.25% each time (a total of 50 basis points). Despite this, Canadian banks only passed along 0.45% (45 basis points) of the cuts, keeping 0.30% for themselves.

This situation highlighted that central bank decisions don’t always translate directly into borrower savings. That missing 0.30% never made its way back to consumers.

2016: Independent Prime Rate Adjustment by a Major Bank

In 2016, one of Canada’s major banks introduced its own proprietary prime rate, setting it slightly higher than the industry-standard prime rate. While most adjustable-rate borrowers didn’t notice because their payments stayed the same, more of their payments were applied to interest instead of principal.

This independent adjustment demonstrated how lenders can make changes that impact borrowers in ways they may not immediately notice. Adjustable-rate mortgages, where payments change with Prime, and variable-rate mortgages, where the interest rate changes but payments may remain constant, further illustrate how adjustable rates are not all the same in mechanics or benefits.

2021-2022: Tiff Macklem’s Reassurance and the Rate Surge

In 2021, Bank of Canada Governor Tiff Macklem assured Canadians that rates would remain low for a prolonged period. This led many borrowers to choose variable-rate mortgages, believing they’d benefit from sustained savings.

However, by 2022, the BoC raised rates rapidly to combat inflation, pushing them to the highest levels in over a decade. Borrowers with adjustable-rate mortgages (ARMs) faced significant payment increases, while variable-rate mortgages hit trigger rates, leading to grossly extended amortization periods in some cases.

Rapid Rate Movements and Market Surcharges

When rates move quickly, lenders may also surcharge adjustable-rate offerings. For example, instead of offering Prime – 0.50%, lenders might adjust to Prime – 0.10% or even Prime + 0. This means the actual discount off prime becomes less favourable, directly impacting borrowers’ costs.

Evaluating the actual discount from prime, rather than focusing solely on the rate, is critical when considering adjustable-rate mortgages.

Financial Empathy During Uncertain Times

In industries prone to strikes or sudden income changes, lenders vary widely in their approach to financial empathy. Some lenders are quick to damage a borrower’s credit score or refuse to renew existing mortgages during difficult times. Others show understanding by offering deferred payment options to help borrowers weather financial challenges.

With our ever-changing market, assessing a lender’s flexibility and empathy is a vital part of the evaluation process. These factors, along with rate comparisons, go into the discussions we have with clients to ensure they’re set up for success in any scenario.

What You’ll Learn in The Mortgage Code

I explore these topics and more in my book, The Mortgage Code. This guide gives borrowers the tools they need to navigate the mortgage market with confidence, helping them understand how factors like market shifts, lender policies, and economic uncertainty can affect their financial future.

Order The Mortgage Code on Amazon. https://www.amazon.ca/Mortgage-Code-Helping-Property-Mistakes-ebook/dp/B07HFHR8TV

Key Takeaways for Borrowers

Understand the risks and rewards: Adjustable rates can offer flexibility and savings, but they come with unpredictability.

Evaluate lender policies: Consider how your lender handles deferred payments, renewals, and financial hardships.

Stay informed about rate discounts: The actual discount off prime, lock-in policies, and penalties matter in addition to just the rate itself.

Work with a trusted advisor: Our experience ensures every aspect of your financial situation is considered, not just the numbers.

 

Mortgage decisions are more than just choosing between fixed and adjustable rates—they’re about finding the right fit for your life and goals. Let’s work together to ensure you have clarity and confidence in every decision.

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. 

Bank of Canada and More Important Updates

General Angela Calla 12 Dec

I wanted to share some key updates that could impact your mortgage and financial planning as we approach the end of the year.

1. Bank of Canada Rate Decrease

The Bank of Canada has announced a 50-basis-point rate decrease, bringing the prime rate down from 5.95% to 5.45% with most lenders.  For adjustable or variable rate mortgages, this means approximately $30 savings per month per $100,000 owing on your mortgage.

· This change directly affects Adjustable-Rate and Variable-Rate Mortgages, potentially lowering your payments.

· If you’re considering a renewal or refinance, now is a great time to explore how you can benefit.

· For clients with mortgages currently in progress with us, our team automatically reviews your file to ensure you secure the lowest rate available.

The next Bank of Canada rate announcement will be in January 2025. Here’s the official press release for more details.

Click on the image below to watch Angela on Global News Morning.

 

2. Increased Insured Mortgage Cap (Effective December 15th)

As of December 15th, the insured mortgage cap will increase, offering greater flexibility for borrowers.

This change could open new opportunities for home purchases, renewals, and home renovation financing. Feel free to reach out to discuss how this update might work in your favor. You can also check out our previous post on this here and if you’re needing help with additional ways to help save for a down payment, you can find 3 helps tools here.

3. End-of-Year Document Organization

As we approach year-end, it’s the perfect time to get organized for tax filing and financial planning.

Start gathering key documents like:

· Pay stubs, T4s, and annual mortgage statements

· Any other financial records relevant to your taxes or mortgage

I recommend creating a dedicated folder for these items to streamline:

· Tax filing – Ensuring accurate and stress-free returns

· Mortgage renewals or reviews – Making future adjustments smooth and hassle-free

By being proactive now, you’ll save time and avoid stress later.

If you have any questions about these updates or need help with year-end preparations, please reply to this email with your questions or introductions to loved ones. We are here 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. 

The Bank of Canada Cuts Its Policy Rate By Another 50 Basis Points

General Angela Calla 12 Dec

The Surge In Canadian Unemployment Keeps Another Jumbo Rate Cut In Play In December

The BoC slashed the overnight rate by 50 bps this morning, bringing the policy rate down to 3.25%. The market had priced in nearly 90% odds of a 50 bp move, where consensus coalesced. The combined slower-than-expected GDP growth and a sharp rise in the Canadian unemployment rate to 6.8% triggered the Bank’s second consecutive jumbo rate cut. Today’s move will take the prime rate down 50 bps to 5.45% effective tomorrow, reducing floating rate mortgage loan rates by a half point, easing the cost of borrowing and reducing the monthly payment increase for renewals. This should spark housing activity, which accelerated in October and November.

The policy rate is now at the top of the estimated neutral rate range, 2.25% to 3.25%, with more moderate rate cuts continuing into next year. However, monetary policy remains restrictive, as the 3.25% policy rate is still 125 basis points above inflation, which has declined to roughly 2%, the Bank’s inflation target.

Economists have suggested that the tone of the central bank’s press release is more hawkish than before, unsurprising following two consecutive jumbo rate cuts. The Bank continues to say that its future decisions are data-dependent and will be impacted by policy measures taken by the government. In particular, the Bank highlighted the coming GST cuts, dispersal of bonus checks and the significant reduction in immigration. These developments have offsetting implications for inflation.

Governor Macklem signalled that he anticipated “a more gradual approach to monetary policy” in his press conference. We are forecasting 25 bp rate cuts through at least the first half of next year. That would take the overnight rate down to 2.5% by early June, a huge boost to housing that will likely enjoy a strong spring season.

 

 

 

 

 

Monetary policy remains overly restrictive as the 3.75% overnight policy rate remains well above the inflation rate. We expect the overnight rate to fall to 2.5% by April or June of next year. This should continue boosting housing activity, which increased significantly in October and November.

Last week’s GDP data release showed that Canada’s third-quarter GDP grew a mere 1.0%, well below the Bank’s downwardly revised forecast of 1.5%. This, in combination with today’s employment report, bodes well for the Bank of Canada to consider cutting rates by another 50 bps seriously. However, given how aggressive they have been compared to the Federal Reserve, which will undoubtedly cut rates by only 25 bps in late December, they could be satisfied with a 25 bp cut for now.

 

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

drsherrycooper@dominionlending.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. 

Three Overlooked Tools to Save Thousands on Your Home Purchase

General Angela Calla 10 Dec

Three Overlooked Tools to Save Thousands on Your Home Purchase

Buying a home is one of the biggest financial decisions you’ll ever make, but many buyers miss out on valuable tools that can significantly reduce costs. Whether you’re a first-time buyer or looking to upgrade, these three programs can help you save thousands of dollars and make your dream home more affordable.

1. No Property Transfer Tax on New Construction Up to $1.1 Million

•What it Means: Buyers of newly built homes priced up to $1.1 million in British Columbia can avoid paying the property transfer tax (PTT).

•Why It Matters: The property transfer tax is a significant expense, often overlooked during home purchase planning. Avoiding it can save buyers thousands upfront.

Example:

On a $1 million home, the PTT would normally be $18,000. With this exemption, buyers can redirect those funds toward furnishing their new home, reducing other debts, or boosting their savings.

2. CMHC Eco Plus Program – A 25% Insurance Premium Rebate

•What it Means: Buyers of energy-efficient homes may qualify for a rebate of up to 25% on their CMHC insurance premium which is applied for directly through the insurer.

•Why It Matters: Energy-efficient homes not only lower your insurance premium but also reduce long-term utility costs, making homeownership more affordable in the long run.

Example:

•Purchase Price: $700,000

•Down Payment: $70,000 (10%)

•Mortgage Amount: $630,000

•Insurance Premium (4%): $25,200

•Rebate (25%): $6,300

•Final Insurance Premium Cost: $18,900

This program puts thousands of dollars back into your pocket while promoting sustainability.

3. First Home Savings Account (FHSA)

•What it Means: The FHSA is a powerful savings tool designed for first-time homebuyers. Contributions are tax-deductible, and withdrawals used for purchasing a home are tax-free.

•Why It Matters: It combines the best features of an RRSP and a TFSA, allowing for tax-free growth while helping buyers save for a down payment faster.

Example (Opened in 2025):

•Maximum Contribution: $8,000/year, but if the account is opened in 2025, only three years of contributions can be made, totaling $24,000.

•Potential Growth: Assuming a 5% annual return, the account could grow to approximately $25,300, providing a larger down payment without any tax implications.

•For couples, combining FHSA accounts could allow for up to $50,600 in tax-free savings.

Maximizing Your Home Purchase Plan

These programs—when used strategically—can make a significant difference in your overall affordability.

1.Use the FHSA to grow your down payment.

2.Avoid the property transfer tax by choosing new construction.

3.Save on insurance premiums with the CMHC Eco Plus Program.

Take Advantage of Every Opportunity

Navigating the homebuying process can be overwhelming, but with the right guidance, you can maximize your savings and make more informed decisions. As a mortgage expert, I’m here to help you understand these tools and how to integrate them into your home purchase strategy.

Don’t leave money on the table—let’s build your plan together!

 

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. 

Top 5 Mortgage Rule Changes in British Columbia

General Angela Calla 10 Dec

Top 5 Mortgage Rule Changes in British Columbia

1. Increase in Insured Mortgage Cap: Effective December 15, 2024, the federal government is raising the insured mortgage price cap from $1 million to $1.5 million. This change allows buyers in high-cost markets like Vancouver to purchase homes up to $1.5 million with a down payment as low as 5% of the first $500,000 and 10% of the balance.

2.Expansion of 30-Year Amortizations: Starting December 15, 2024, all first-time homebuyers and buyers of new builds can access 30-year amortization periods for insured mortgages. This extension aims to lower monthly payments, making homeownership more accessible.

3.Removal of Stress Test for Uninsured Renewal Switches: As of November 21, 2024, the Office of the Superintendent of Financial Institutions (OSFI) has removed the federally required mortgage stress test for straight, stand-alone uninsured mortgage switches at renewal. This change allows homeowners to switch lenders without undergoing a new stress test, potentially securing better rates.

4.Introduction of Insured Refinances for Secondary Suites: Beginning January 15, 2025, eligible homeowners can access insured refinances for up to 90% of their property’s improved value (capped at a $2 million home value) for construction funds. This initiative encourages on-property density and aims to alleviate housing and rental supply issues.

Here’s an example of how the reduced down payment works under the new insured mortgage cap for a $1 million purchase:

Before the Change (Cap: $1 Million)

If the purchase price is $1 million or higher, a 20% down payment is required because homes over $1 million do not qualify for mortgage insurance.

•Purchase Price: $1,000,000

•Down Payment (20%): $200,000

•Mortgage Amount: $800,000

After the Change (Cap: $1.5 Million)

Now that the insured mortgage cap is raised to $1.5 million, buyers can qualify for insured mortgages with a lower down payment.

•First $500,000: Requires a 5% down payment = $25,000

•Next $500,000: Requires a 10% down payment = $50,000

•Total Down Payment: $25,000 + $50,000 = $75,000

•Mortgage Amount: $925,000

 

Savings: This reduces the down payment from $200,000 to $75,000, making homeownership more accessible for buyers in high-cost markets.

 

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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