8 Ways Canadians Benefit from Early Mortgage Redo: A Nurse and Engineer’s Success Story

General Angela Calla 24 Jul

In the ever-changing Canadian market, financial decisions can be both daunting and exhilarating. Every day, The Angela Calla Mortgage Team have the privilege of helping Canadians navigate these waters. Recently, a nurse and an engineer from Port Coquitlam experienced firsthand the benefits of taking control of their financial future by redoing their mortgage early. Through this decision, they managed to save a significant amount of money, and their experience highlights the eight things they love about it.

1. Save Money Monthly: One of the most immediate and rewarding benefits of refinancing their mortgage early was the opportunity to save money on a monthly basis. By securing a lower interest rate and potentially extending the mortgage term, they reduced their monthly mortgage payments significantly, freeing up funds for other important financial goals.

2. No Outside Debts: With the newfound savings from their lower mortgage payments, the nurse and engineer were able to eliminate outside debts. Paying off high-interest debts, such as credit cards or lines of credit, provides them with financial freedom and the ability to focus on their long-term financial well-being.

3. Building an Emergency Fund: Having an emergency fund is essential for handling unexpected financial challenges without resorting to high-interest loans. By restructuring their mortgage, the couple now has an opportunity to build a robust emergency fund, giving them peace of mind and added financial security.

4. Accelerating Property Ladder Progress: A key advantage of refinancing early is the ability to move up the property ladder sooner. With reduced monthly payments and better financial planning, the nurse and engineer are now on track to achieve their dream of upgrading to a larger, more suitable home in the future.

5. Investing in Their Children’s Future: With their finances in better shape, the couple has decided to start contributing to their children’s Registered Education Savings Plan (RESP). By prioritizing their children’s education, they are building a solid foundation for their youngsters’ futures.

6. Contributing to Their RRSPs and Tax Refunds: Through mortgage refinancing, the couple was able to free up more funds to contribute to their own Registered Retirement Savings Plans (RRSPs). This not only helps secure their retirement but also leads to additional benefits, such as a tax refund, which they plan to use for a bit of well-deserved fun.

7. Avoiding Unnecessary Interest Payments: By taking control of their mortgage and refinancing early, the nurse and engineer were able to avoid paying unnecessary interest for no apparent benefit. Reducing the overall interest paid over the life of the mortgage allows them to retain more of their hard-earned money.

8. Securing a Lower Rate for the Long Term: One of the most significant advantages of refinancing early is the ability to secure a lower interest rate for a more extended period. This locks in their mortgage at a favorable rate, shielding them from potential future interest rate fluctuations.

The success story of the Port Coquitlam nurse and engineer demonstrates the power of making informed financial decisions. By taking control of their mortgage and refinancing early, they unlocked a wealth of benefits, including reduced monthly payments, elimination of outside debts, and increased contributions to their RRSPs and their children’s RESP. Moreover, their decision to build an emergency fund and secure a lower interest rate provides them with financial security and a stronger foundation for their future. If their experience teaches us anything, it’s that by carefully navigating the changing market and seeking expert advice, Canadians can achieve financial success and enjoy a brighter financial future.

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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CPI Inflation Falls To 2.8%–Inside the BoC’s Target Range

General Angela Calla 19 Jul

Canadian Inflation Falls Within Bank of Canada’s Target Range; Food and Shelter Costs Remain High

June inflation data released today by Statistics Canada showed that the Consumer Price Index (CPI) rose 2.8% year-over-year (y/y), slightly below expectations. This was the lowest CPI reading since February 2022.

The decline in inflation was mainly due to lower energy prices, which fell by 21.6% y/y. Without this decline, headline CPI inflation would have been 4.0%. The year-over-year decrease resulted from elevated prices in June 2022 amid higher global demand for crude oil as China, the largest importer of crude oil, eased some COVID-19 public health restrictions. In June 2023, consumers paid 1.9% more at the pump compared with May.

Food and shelter costs remained the two most significant contributors to inflation, rising by 9.1% y/y and 4.8% y/y, respectively. Food prices at stores have risen nearly 20% in the past two years, the most significant rise in over 40 years. Shelter inflation rose slightly from 4.7% y/y in May.

The largest contributors within the food component were meat (+6.9%), bakery products (+12.9%), dairy products (+7.4%) and other food preparations (+10.2%). Fresh fruit prices grew at a faster pace year over year in June (+10.4%) than in May (+5.7%), driven, in part, by a 30.0% month-over-month increase in the price of grapes.

Food purchased from restaurants continued to contribute to the headline CPI increase, albeit at a slower year-over-year pace in June (+6.6%) than in May (+6.8%).

Services inflation cooled to 4.2% y/y from 4.8% y/y in May. This was due to smaller increases in travel tours and cellular services.

The Bank of Canada’s target range for inflation is 1% to 3%. While June’s inflation reading was within the target range, it is still higher than the Bank would like. The Bank raised the overnight policy rate twice in the past two months to reduce the stickier elements of inflation.

There were signs of easing price pressures for consumer goods also. Durable goods inflation continued to cool to 0.8% y/y in June. Passenger vehicle prices rose slower in June (+2.4%) than in May (+3.2%). The year-over-year slowdown resulted from a base-year effect, with a 1.5% month-over-month increase in June 2022 replaced with a more minor 0.6% month-over-month increase in June 2023. This coincided with improved supply chains and inventories compared with a year ago. Household furniture and equipment was up only 0.1% y/y in June, down from a peak of 10.5% last June.

The June inflation data provides some relief to consumers, but it is clear that food and shelter costs remain a major concern. The Bank of Canada will closely monitor inflation in the coming months to see if it is on track to return to its 2% target. There is another CPI report before the Bank meets again on September 6th.

The Bank of Canada’s underlying inflation measures cooled further in May. CPI-trim eased to 3.7%y/y in June from 3.8% y/y in May, and CPI-median registered 3.9% versus 4.0% y/y in May. The chart below shows the closely watched measure of underlying price pressures, the three-month moving average annualized of the core measures of CPI. They continue to be just under 4%.

Canadian inflation continued to make encouraging progress in June. However, the cooling in headline inflation benefits from sizeable base effects due to the favourable comparison to high energy prices last June. The Bank of Canada (BoC) is watching its preferred core measures, which continue to show glacial progress.

Bottom Line

It takes time for the full effect of interest rate hikes to feed into the CPI. Mortgage interest costs will continue to rise as higher interest rates flow gradually through to household mortgage payments with a lag as contracts are renewed.

BoC Governor Macklem emphasized last week that the Bank has become worried about the persistence of underlying inflation pressures in the economy. The June inflation data likely provides some reassurance that things are moving in the right direction, but not fast enough for the Bank of Canada to let its guard down.

The BoC is facing a difficult balancing act. It needs to raise interest rates enough to bring inflation under control, but it also needs to be careful not to raise rates so high that it causes a recession. The next few months will be critical for the BoC as it assesses the risks of inflation and recession.

(Courtesy of Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres)

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Angela Calla on CBC National News Discussing Mortgage Strategies

General Angela Calla 13 Jul

Its been a stressful week for many with the increase in interest rates. Here is a segment we did with the CBC National that discusses some the strategies that can help you navigate these current times.

If you are up for mortgage renewal, or trying to plan for your future in these times. Click here for the segment ( approx. 5 minute)

Please reach out to us to review your mortgage or if you would like an introduction to our financial planning partners

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‘Devastating news’: B.C. premier worries about rising interest rates for residents

General Angela Calla 13 Jul

B.C. Premier David Eby said the Bank of Canada interest rate rise Wednesday is “devastating news” for families that have debt.

“They borrowed money for various reasons to get through,” he said at the annual premier’s meeting in Winnipeg. “A lot of businesses in British Columbia borrowed money to get through the pandemic. They’re struggling under the weight of that debt.”

The Bank of Canada has raised its benchmark interest rate by another 25 basis points, bringing it to levels not seen since 2001 amid fears the decline in inflation “could stall.”

Economists say the latest move is a warning to Canadians not to expect rate cuts anytime soon, and that future rate hikes are not off the table. The central bank’s key interest rate now stands at 5.0 per cent following back-to-back increases.

Eby said he worries about the full impact of the high key interest rate.

“You really do have to wonder when the Bank of Canada is going to take a pause and see what the impact of this is going to be,” he added. “We haven’t seen the full impact yet. People have not renewed their mortgages yet. And the businesses that are struggling under debt have not started going under yet. But they will those jobs will be lost. And it won’t just be in British Columbia. It’ll be across the country.”

Angela Calla, author of The Mortgage Code, told Global News that this interest rate means Canadians who do have a mortgage coming up for renewal in the next year should not wait to get their rate hold.

“Rate holds can be held for 120 days,” she said. “There is no cost to get a rate hold and then allow the timing of the market to determine what the best option is for you. We certainly don’t expect decreases in the next year, so having that in mind can give you the power to shop early with any mortgage renewal or purchase.”

Calla added that more increases are expected until the Bank of Canada gets inflation in line.

View the videos here: Global News

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MFCBC First-Time Home Buyers Program

General Angela Calla 27 Jun

The MNBC Funded Program Supports New Home Down Payment and Closing Costs

BRITISH COLUMBIA – Métis Financial Corporation of British Columbia (MFCBC) in partnership with Métis Nation British Columbia (MNBC) has launched a First-Time Home Buyers Program (FTHBP) to support Citizens of the Métis Nation of BC who are ready to purchase their first home.

FTHBP is a one-time grant that provides Métis people with financial assistance to invest in their first property in BC, whether a condo, townhouse, duplex, detached house, or family home. The grant was introduced to increase opportunities for home ownership among Métis citizens who have the resources to obtain a mortgage, but are challenged in saving enough money for a down payment and closing costs.

“We are thrilled to be able to expand opportunities for homeownership within the Métis community, particularly in such a challenging economic climate,” said Evan Salter, CEO of MFCBC. “With soaring interest rates, inflation and the cost of living continuing to rise, it’s become extremely difficult for most people to afford a house in BC. We introduced the First-time Home Buyers Program to help Métis families secure homes they might not otherwise have been able to afford, with no requirement for repayment.”

FTHBP is a forgivable loan that provides a maximum of $20,000 towards a down payment or purchase price, and up to $3,000 toward closing costs. The loan is interest-free and does not need to be repaid, provided the terms and conditions of the program are respected for a period of five years from the date of purchase.

“This first-time home buyers program will help alleviate the financial burden of inflation and the rising cost of living for Métis people across British Columbia,” says Walter Mineault, Vice-President and Minister of Housing and Homelessness for Métis Nation British Columbia. “I took on the portfolio of housing and homelessness with the goal to help our citizens achieve the dream of home ownership which is all too often unattainable, and today we have taken a big step in achieving that goal.”

For more information about the FTHBP, including eligibility requirements, visit YourMetisHomeBC.ca.

(This article is courtesy of BusinessExaminer.ca)

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Canada’s Economy Unexpectedly Contracted in Q2

Housing Dampened Economy in Q2

This morning’s Stats Canada release showed that the economy unexpectedly contracted in the second quarter by 1.1%, down from the revised 5.5% gain in the first three months of the year. The Canadian dollar dipped on the news to $.7921 as questions of resiliency in the face of the delta variant mount. Economists in a Bloomberg survey were anticipating a 2.5% expansion. Adding to the disappointment, economic growth fell a further 0.4% in July, according to a preliminary estimate.

The weak GDP data reduces the odds of the Bank of Canada tapering their bond purchases at their policy meeting on September 8th. It also highlights the output gap–the degree to which the economy remains below full economic capacity–remains a big issue. The Bank has forecast the gap to close by the middle of 2022. While that remains uncertain, we continue to expect growth to rebound in the third quarter.

Increases in investment in business inventories, government final consumption expenditures, business investment in machinery and equipment, and investment in new home construction and renovation were not sufficient to offset the declines in exports (-4.0%) and homeownership transfer costs (-17.7%), which include all costs associated with the transfer of a residential asset from one owner to another.

Housing investment reshapes the economy

Since the third quarter of 2020, housing investment has emerged as the predominant contributor to economic activities and capital stock—with residential capital stock surpassing non-residential capital stock. Moreover, the average housing investment for the previous four quarters was 17% higher than the average over the last five years.

Housing investment

Both new construction and renovations—the components of residential capital stock—have shown sustained growth since the third quarter of 2020. Because of the ability to work from home, savings from less travel and reduced participation in other activities, low mortgage rates and increases in home equity lines of credit, spending has continued to increase on new houses (+3.2%) and home renovations (+2.4%).

After taking on $62.3 billion of residential mortgage debt in the last half of 2020, households added $84.2 billion more residential housing debt in the first half of 2021.

Supply chain disruptions continue to impact motor vehicles

Shortages of microchips and other inputs curtailed trade in motor vehicles and domestic consumption. Household purchases of new passenger cars (-7.2%) and trucks, vans and sport utility vehicles (-1.6%) decreased, while business investment in medium and heavy trucks, buses and other motor vehicles fell 34.2%. Longer plant shutdowns because of international supply chain disruptions have constrained imports of parts and led to significant decreases in exports. Low production of motor vehicles and parts resulted in an 18.9% drop in exports of passenger cars and light trucks and an 8.7% decline in tires, motor vehicle engines and parts exports. Inventories had another quarter of significant drawdowns in response to supply needs.

Double-digit household savings rate continues

The modest rise in household spending (+0.7%, in nominal terms) was outpaced by growth in disposable income (+2.2%), leaving households with more net savings than in the previous quarter. Household incomes were primarily bolstered by employees’ rising compensation and increasing transfers received from the government, which were partially offset by a 2.8% rise in personal income taxes.

Consequently, the savings rate reached 14.2%—the fifth consecutive quarter with a double-digit savings rate—as various pandemic-related restrictions and uncertainty continued to limit the scope of household consumption. The household savings rate is aggregated across all income brackets; in general, savings rates are greater in higher income brackets.

Bottom Line

Today’s release is, in some respects, ‘ancient history.’ It is still widely expected that the economy will rebound in the third quarter. With the surge in household savings and continued growth in personal disposable income, pent-up demand is likely to boost consumption for the remainder of this year. All eyes will be on the August employment report released Friday, September 10th. The Bank of Canada will likely continue to proceed cautiously. Another tapering of the bond-buying program will come under scrutiny, and forward guidance will continue to suggest no rate hikes until the second half of next year.

The source of this article is from SherryCooper.com/category/articles/

Angela Calla is a 17-year award-winning woman of influence which sets her apart from the rest. She is without a doubt, a true expert in her field. 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 August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Click here to view the latest news on our blog.

Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved, continues quantitative easing

Information note

The next scheduled date for announcing the overnight rate target is July 14, 2021. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR at the same time.

Content Type(s): Press, Press releases

To view the article on the Bank of Canada website click here.

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Economy

8 Ways Canadians Benefit from Early Mortgage Redo: A Nurse and Engineer’s Success Story

Click here to view the latest news on our blog.

CPI Inflation Falls To 2.8%–Inside the BoC’s Target Range

Click here to view the latest news on our blog.

Angela Calla on CBC National News Discussing Mortgage Strategies

Click here to view the latest news on our blog.

‘Devastating news’: B.C. premier worries about rising interest rates for residents

Click here to view the latest news on our blog.

MFCBC First-Time Home Buyers Program

Click here to view the latest news on our blog.

Canada’s Economy Unexpectedly Contracted in Q2

Housing Dampened Economy in Q2

Housing investment

Click here to view the latest news on our blog.

Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved, continues quantitative easing

Information note

Click here to view the latest news on our blog.

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