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April 2025 Newsletter

General Angela Calla 1 Apr

Welcome to the April issue of my monthly newsletter!

Spring has sprung for most Canadians (sorry about your luck Alberta) and along with the ever-present trusted mortgage content, this month I have some gardening inspo for anyone that wants to flex their green thumb this year. Enjoy!

Variable-Rate Mortgages: What You Should Know

Shakespeare might have thought ‘to be or not to be’ was the ultimate question, but he wasn’t living in 2025 trying to minimize bank fees and interest charges while maximizing financial returns—and having to pay $9 for a clamshell of raspberries. This month, we’re tackling a modern dilemma: ‘Should I get a variable or fixed rate on my mortgage?’ Not as poetic, but way more practical. Let’s dive in.

Understanding the Basics: Every mortgage payment has two components: principal and interest. Your choice between a fixed or variable mortgage impacts how these are structured over time.

Variable Rate Mortgages: Variable rate mortgages come in two main forms:

  • Fixed Payment Variable Mortgage – You have a set monthly payment, but the portion that goes toward principal vs. interest fluctuates. When rates go up, more of your payment goes toward interest, slowing down how quickly you pay off your mortgage. When rates go down, more goes toward the principal, helping you pay off your loan faster.
  • Adjustable Payment Variable Mortgage – The total mortgage payment fluctuates based on interest rate changes, ensuring the mortgage is paid off within the original amortization schedule. The portion of your payment allocated to interest and principal will shift as rates change.

Variable mortgages introduce an element of unpredictability, which some borrowers are comfortable with, while others prefer the security of knowing exactly what their payments will be.

Fixed Rate Mortgages: A fixed-rate mortgage means your interest rate and monthly payments remain the same throughout your term. This stability can be crucial for those who prioritize predictability in budgeting, mental well-being, or long-term financial planning. If the idea of fluctuating payments makes you uneasy, or if you want to avoid worrying about interest rate changes, a fixed-rate mortgage could be the right choice.

The Interest Rate Factor: The Bank of Canada (BoC) sets the overnight lending rate, which influences the Prime rate set by banks. Variable mortgage rates are typically based on Prime ± a lender-specific adjustment. There are eight key BoC announcements each year that can result in rate changes (or no changes at all). You’ve probably seen me cover these on social media (if not, I’d love for you to follow along!).

During the pandemic, the BoC lowered rates to 0.25% to stimulate borrowing. Rates began increasing in 2022 due to inflation, reaching 5% by mid-2023 before the BoC started cutting them in 2024. As of March 12, 2025, we’re at 2.75%, with six more rate decisions coming this year.

Risks: There are risks with both variable and fixed rates for your mortgage. With a fixed rate, the risk is that if rates drop, you will have a higher payment than what is available on the market. You’d also likely incur a penalty to break the fixed rate term to capitalize on any decreases. With a variable rate, the risk is that changing rates could increase the amortization of your mortgage. We also discussed the risk of Bank of Canada announcements indirectly changing your rate and therefore payment, impacting your budget and cash flow. And one final potential risk is if rates go up enough, it may trigger the need for a lump sum payment to your lender.

2025: What’s Next? The current rate is still above the target 2%, meaning there is room for potential decreases. However, nothing is guaranteed. Rates could hold steady or, in rare cases, even increase due to external factors like inflation spikes or international economic shifts.

Impact on Your Mortgage: If you have a variable mortgage, your rate is based on your lender’s Prime rate, which is influenced by the BoC policy rate. Your mortgage rate is typically Prime ± a lender adjustment. If the Prime rate is 6% and your lender offers Prime – 0.50%, your mortgage rate would be 5.50%.

  • With a fixed payment variable mortgage, more of your payment goes toward principal.
  • With an adjustable payment variable mortgage, your monthly payment decreases.

If you have a fixed-rate mortgage, your rate and payments remain unchanged during your term. This stability is why many borrowers prefer fixed rates, even if they sometimes come with slightly higher initial rates. Fixed rates are influenced by bond market trends rather than the Bank of Canada’s policy rate directly.

Which One is Right for You? There is no universal right answer—only the best choice for your financial situation, risk tolerance, and future plans. As your mortgage professional, I’d love to walk through your mortgage with you and discuss:

  • The pros and cons of fixed vs. variable for your specific needs.
  • How to budget for worst-case scenarios.
  • Whether breaking your current mortgage to switch makes sense.
  • Economic implications of switching between a variable and fixed rate.
  • If adjustments at renewal would benefit you?

Send me an email, text, or call anytime! I’m here to provide guidance, not pressure. Let’s find the best mortgage strategy for you!

Gardening 101: Your Spring Gardening Checklist

If you want to maximize returns on your gardening efforts, we’ve got 3 strategies to take you from garden simp to master plant manipulator.

Strategy 1: Better late than early

Seeds do best when they have an uninterrupted growth phase.

So rather than having your plants stall out in a frost, wait 2 weeks (you can do it!) after your initial instinct to plant. It may seem like it’s too late, but the plants will put it into overdrive and make it work. If you’re in doubt and want to test this theory out, plant half the seeds early, and half the seeds 2 weeks later, and see which does better by the end of the growing season. If you’re new to gardening, you might not have a clue if your tomatoes should go in March 1 or July 1, and that’s totally okay too. The Farmer’s Almanac comes to your rescue with their 2025 updated guideline of when to plant based on your postal code. Click here for details.

Strategy 2: Layout matters

Think measure once, cut twice – but for your garden. First up, arrange the tallest plants on the north side of your garden, and the shortest plants on the south side. This will make sure both your little gem lettuces and the jolly green giant snap peas both get enough sunlight. Second, do your research on how much space each plant needs to thrive so you can plan enough real estate for everyone. This website will help you with both these action items for 71 different vegetables. And don’t be afraid to actually measure out your garden. Putting string dividers in there will help you achieve the perfect layout.

Strategy 3: Weed prevention

Prevention is the best way to avoid destroying your back weeding all spring and summer. This is a bit boujee, but if you don’t have raised garden beds it might just be for you. Putting down a layer of cardboard, then adding a 5-10cms of mulch on top, makes sure the weeds stay underneath while the worms and other goodies stay on top, working hard for your soil and plants. If cardboarding your garden isn’t in the cards, just make sure that there is no open soil. If you can see it, so can a weed! Covering the dirt with a layer of mulch (doesn’t have to be fancy mulch, it can just be lawn clippings, sawdust, and the fall leaves you never bothered to rake up and put out on the curb) will prevent most weeds from having the opportunity to grow in the first place.

Hopefully these tips make you the CEO of your own garden in 2025. If you try something new based on what you read here, send me a pic or a note. I’d love to know what’s working for you and share your advice on my socials!

Economic Insights from Dr. Sherry Cooper

Since Donald Trump took office, all bets are off on the Canadian economic outlook. Most people expected more substantial growth and lower inflation as we moved into 2025. Trump’s tariffs, deregulation, attempts at massive reductions in the federal government bureaucracy and geopolitical machinations have changed everything.

VUCA is the name of the game. An acronym used initially by the US Armed Forces, VUCA stands for volatility, uncertainty, complexity, and ambiguity, and it describes the current situation to a tee. Canadian consumer confidence has fallen to its lowest level in decades. Stock markets have plummeted, the currencies are volatile, interest rates have fallen, and no one knows precisely how this will unfold.

On April 2, the US said it would impose reciprocal tariffs on countries with levies on US goods or that favour domestic producers in some way. Moreover, the president has chosen to go after Canada particularly damagingly. We are the number one supplier of steel and aluminum to the US and are now confronted with 25% tariffs. Inevitably, the economy will slow, layoffs will rise, and tariffs will be passed on to the consumer. Whether this will be a one-shot price hike or spillover into second-order effects is uncertain.

Fed Chairman Powell suggested today that inflation from tariffs will likely be transitory—suggesting that price hikes will trigger higher wage demands. Stagflation is an undesirable possibility.

Central banks do not have the tools to deal with tariff-induced stagflation. Higher interest rates might reduce inflation, but slow economic activity, and lower rates might increase price pressures. China is expected to impose retaliatory tariffs on Canadian canola oil, pork and seafood. The tariffs are push-back against Canada for imposing a 100% levy on electric cars from China and 25% on steel and aluminum.

The US is inserting disruption and disorder into a thriving trading partnership between Canada, Mexico and the US. As Jay Powell says, “It’s hard to say how this is going to work out.”

We are expecting slower growth to be dominant, brought on by VUCA. Shorter-term interest rates will fall. That, combined with more housing supply and lower home prices, should spur housing activity and bring buyers off the sidelines as we move into the Spring selling season.

 


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.

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