blog, Home Ownership, Mortgage Education, Uncategorized

5 Easy Steps to Pay Off Your Mortgage Quickly


Paying off your mortgage is a major financial goal for many homeowners. However, the thought of paying off your mortgage early can seem daunting. After all, mortgages are typically structured to be paid off over a period of 25-30 years. But did you know that there are ways to pay off your mortgage quicker than the original amortization schedule? In this blog post, we will explore some strategies that can help you pay off your mortgage faster and save money in the long run.


1  Increase your mortgage payments One of the simplest ways to pay off your mortgage quicker than the original amortization schedule is to increase your mortgage payments. By paying more each month, you can reduce the amount of interest you pay over the life of your mortgage. Even a small increase in your monthly payments can make a significant impact over time. For example, increasing your monthly payments by just $100 could save you thousands of dollars in interest and take years off the life of your mortgage.


2  Make bi-weekly payments Another strategy to pay off your mortgage quicker is to switch from monthly to bi-weekly payments. By doing so, you will make 26 half-payments per year, which is equivalent to 13 full payments. This will help you pay off your mortgage faster and reduce the total amount of interest you pay over the life of the loan. Bi-weekly payments can also help you budget your finances more effectively since you will be making smaller payments more frequently.


3  Make lump-sum payments If you come into extra money, such as a bonus or tax refund, consider using it to make a lump-sum payment towards your mortgage. By making a lump-sum payment, you can reduce the principal amount of your mortgage, which will help you pay off your mortgage quicker and reduce the amount of interest you pay over the life of the loan. Even a small lump-sum payment can make a significant impact on your mortgage balance.


4  Refinance your mortgage Refinancing your mortgage can also help you pay off your mortgage quicker than the original amortization schedule. If you are able to secure a lower interest rate, you can reduce the amount of interest you pay over the life of the loan. You can also choose to refinance to a shorter loan term, which will help you pay off your mortgage faster. However, be sure to weigh the costs associated with refinancing against the potential savings to determine if refinancing is the right option for you.


5  Avoid prepayment penalties Before making any extra payments towards your mortgage, make sure that your mortgage contract does not include any prepayment penalties. Prepayment penalties are fees charged by lenders if you pay off your mortgage early. If your mortgage contract includes prepayment penalties, it may not be worth it to make extra payments towards your mortgage.


In conclusion, paying off your mortgage quicker than the original amortization schedule is achievable. By increasing your mortgage payments, making bi-weekly payments, making lump-sum payments, refinancing your mortgage, and avoiding prepayment penalties, you can reduce the amount of interest you pay over the life of your loan and save money in the long run. While it may require some discipline and sacrifice in the short term, paying off your mortgage early can provide financial freedom and peace of mind in the long term.


blog, Home Ownership, Mortgage Education, Mortgage News, Uncategorized

Why You Shouldn’t Worry about Rising Interest Rates


Consumer consternation has abounded amid the Bank of Canada’s most recent interest rate hike, which brought its overnight lending rate to 4.5%, forcing many to tighten their belts, but the fallout doesn’t have to be so dramatic.


The central bank indicated that we’re entering a period of relative calm. For starters, most observers agree that if there’s any movement this year, it could be a quarter-point decrease to the overnight lending rate, although we’re not so convinced.


StatCan’s most recent job report revealed a 5% unemployment rate, negligibly higher than its record-low figure of 4.9% this past summer, however, in our opinion, such a historically low number may impel the Bank of Canada to increase its overnight lending rate by 25 basis points this month. 


It sounds worse than it is, and here’s why you shouldn’t panic.


As painful as payments have become for variable-rate mortgage holders of late, switching to a fixed-rate pact wouldn’t be as beneficial as most might think. Fixed-rate mortgages are determined by the bond yield, and while it decreased over the last few months, it more recently surged by 40 basis points. 


Additionally, penalties for breaking such terms are exorbitant, further elucidating the importance of riding out Bank of Canada Governor Tiff Macklem’s aggressive rate hiking regime. To boot, Canada’s Schedule I financial institutions are also dissuading borrowers from switching into fixed-rate mortgages by deploying a host of disincentives.

The interest rate differential (IRD) penalty will skyrocket once interest rates begin falling. So, let’s say you switch to a 4.99% fixed rate mortgage even though there’s a strong chance the variable will drop to around 3.5% in 18-24 months, it’s bad enough that you will probably be kicking yourself. More importantly, however, the penalty for breaking that fixed term to return to a variable-rate mortgage pact would become at least 5% of the outstanding balance, which, using a $700,000 mortgage balance, would be $35,000.


That isn’t exactly easy to absorb in the current inflationary environment, either. Speaking of which…


Inflation continues proving a spanner in works for Canadian households, and because it is not falling as quickly as policymakers had hoped, and also because consumer spending has already curbed considerably, it stands to reason that if the Bank of Canada raises its overnight lending rate again, it would most likely be the final hike this year.


Higher interest rate payments have put the squeeze on borrowers, but despite the rising tide of headwinds, they still have ample strategies at their disposal to ensure their mortgages pay-downs include principal payments that protect will equity in their homes.


This is why securing the services of a veteran mortgage broker is crucial: a broker worth their weight in gold doubles as their clients’ lifelong financial planners—and at a fraction of the cost of hiring a financial planner. And no, going into your bank to meet a representative—who may mean well—isn’t the same thing, especially because you will be at their and the bank’s mercy.


At, depending on where our clients are in the life cycle of their mortgage, as well as the type of pact and terms of the deals, we generally recommend tightening spending so that the frequency with which they make payments increases, thus ensuring both principal and interest are paid down.


Although it might seem like a tall order amid consumer price index (CPI) volatility, it isn’t as complicated as it sounds. For example, if you’re in the habit of eating out on a weekly basis, the savings of eating out once a month instead would be immense. The same rule applies to other non-essential outlays, like going on vacation or enjoying entertainment.


It is also during times like these that debt consolidation makes the most sense because it can save up to $2,000—and, in some cases, more—in monthly cash flow.


Finally, another way variable-rate mortgage holders can weather the storm and make the most of their elevated payments until interest rates fall again is to extend their amortization periods. Doing so substantially reduces monthly mortgage fees—and if they curb spending elsewhere and maintain current payment amounts, they will be paying down principal and growing their equity. brokers have a big bag of tricks to help their clients, and these are just some of the strategies we’ve been using during this most recent economic turbulence. 


Stay tuned for plenty more.


blog, Home Ownership, Mortgage Education, Mortgage News, Uncategorized

Mortgage Market Update




Fixed rates continue to go up and the banks continue to take away the discount on variable rate mortgages. 




Well, this can be good news in a way, although very suspicious.

The reason banks are taking away the discount on the variable and increasing the rates on short term rates is simple. They do not want clients taking a variable or a short term fixed. Why? Because it’s more profitable for you to take a 5 year fixed, and especially now with some of the biggest spreads between the 5 year bond yields and the 5 year fixed given in history. This means that they are making a lot of money right now on the spread.


These are some dirty tricks, but common ones. We have seen this from the banks a few times in history, including the recession in 2009/2010.


The banks basically believe rates will go down in the short term (short term meaning in the next 12-24 months), so if you can get clients to lock into a 5 year fixed, that’s a win-win. And let’s be honest – the banks are very good at making money.


Therefore, myself and any good, experienced broker will still recommend a variable or a short term fixed rate.


The 5 year fixed is now at a 14 year high, and what goes up must come down. Unfortunately, we cannot say for sure when.


Stay the course and never panic. Panicking or making rash decisions almost always leads to a regrettable decision. We will all be fine. 


This is a very good video on all of this from the President of Mortgage Architects.

Watch and share: Bank of Canada


As always, if you or your customers have any questions or concerns, call or email us any time. We are always happy to help and put all of this into perspective.


Stay strong – and good luck out there this fall!




blog, Home Ownership, Mortgage Education, Uncategorized

A Great Alternative to “Locking In”


The Bank of Canada recently raised the prime rate again by 0.50%, setting a new record for rate increases in such a short period of time. 


What does this mean for your payments if you have a variable rate mortgage?


A 0.50% increase to the prime rate = approximately $25 per $100,000 mortgage.


So, the average $500,000 mortgage payment will go up $125 a month.


Could there be more rate increases? 


Yes, it is possible. However, if there are, there is just as much of a chance the prime rate drops as well, and those in a variable benefit from any future drops when the Bank of Canada triggers a recession.


Are you nervous about your payments? 


The best solution for those who want to add more certainty to their payments for cash flow management reasons, is to switch or refinance to a fixed payment variable, currently around 3.2 to 3.3% (on average) – instead of 4.5- 5% for a fixed rate mortgage with a massive penalty to break. (900% greater than a variable rate penalty) 


We continue to recommend variable rate today for anyone starting a new mortgage, as we have the biggest spreads in fixed vs variable in over 40 years (at anywhere from 1.50 to 2.00% spread on average, variable to fixed).


When you lock into a fixed, you will be self-imposing 6+ rate hikes TODAY, so even if it did go up 6+ times over the next 2 years or more, it is much more beneficial to stagger the increase over time than feel the effects immediately.


Additionally, when you lock in you will be increasing your potential prepayment penalty by 900% in the event that you break the new fixed rate mortgage for any reason. Keep in mind that 70% of Canadians break their mortgage for one reason or another. Let’s face it – life happens!


We can refinance to switch you to a fixed payment variable and even add a home line of credit assuming you have built up equity. A home line of credit can be a great tool to have instant access to.


Don’t forget – taking a variable mortgage is a strategy to pay the least amount of interest over the life of your mortgage, while maximizing your flexibility and control.  Statistically speaking those who go variable and stay variable will save more money over the life of their mortgage. 


If you have a fixed rate product or a fixed payment variable already – the prime rate “noise” does not affect you…so no reason to make any changes;) 


Check out a new video from the President of Mortgage Architects that you may enjoy:



Below, you can check out the historical prime rates from the last 15 years. The prime rate goes up and down.


Those in a variable save more money over the term, plus they benefit from far superior terms and conditions, the biggest of these being the penalty (and if you have experienced a fixed rate penalty you will understand this –  life happens!)


MCAP Prime Rate History



Remember, we are here for you! Call us at (647) 795-8700 or email us at, anytime. We’ve got your back for life 🙂


blog, Home Ownership, Mortgage Education, Uncategorized

How to Navigate a Variable Mortgage Amid Rising Interest Rates



Recent interest rate hikes by the Bank of Canada may have some homeowners wanting to pull the ‘chute on their variable mortgages and lock into a fixed rate. 


It’s understandable these changes, bracketed by high inflation and the economic uncertainty brought on by the war in Ukraine, would cause some to rethink how they’re financing their home. But is it necessary? 


“Rates are cyclical,” says Scott Nazareth, a mortgage professional with “They don’t always go up and they don’t always go down, so it’s important you don’t make rash decisions out of fear.”


Here are some actions variable mortgage holders can take to help navigate what’s ahead.

But first, a history lesson

Unprecedented has been the word of the pandemic, especially when referring to the economic impact of COVID-19. 


When the world was forced to shelter in place and economies slowed to a trickle, governments responded with historic social and economic programs to provide stability. 


By May 2020, the Bank of Canada dropped its already-low key policy interest rate to 0.25 per cent to encourage borrowing and stimulate the economy. Banks capitulated by setting their mortgage rates at historic lows.*


At the time there wasn’t a significant difference between fixed-rate and variable mortgages. But that spread grew over the past two years, inching closer to 1.5 per cent today. Even though variable rates can and do change, depending on the Bank of Canada, they continue to stay lower than fixed rates at this time. 


Granted, variable rates can only go up after being set to record lows in 2020. Meanwhile, those with a fixed rate mortgage are guaranteed the same rate for their borrowing term regardless of what the Bank of Canada does.


Still, it’s worth noting that variable mortgages have historically won the race. Even through fluctuating rates, variable mortgage holders have typically paid off their principal faster. This was true even before the pandemic.


Keep Calm

Last month, however, we saw the Bank of Canada raise the overnight rate to one percent. It’s the second consecutive rate hike and the biggest in 20 years. That resulted in the highest borrowing rates since the pandemic began. 


Interest rates are expected to go up even more thanks to inflation soaring above targets and the war in Ukraine.


Variable mortgage holders might be asking if they can afford a change in their rates, which currently hover around 2.7 per cent, depending on the lender. 


Nazareth says they can.


“Every mortgage since 2017 has been stress tested,” he says. “That made people qualify at a rate of 4.65 per cent and more recently at 5.25 per cent. It’s not that you were qualifying at the edge of affordability to begin with.”**


Pay the Spread

To be sure, however, Nazareth recommends variable mortgage holders “pay the spread” between current variable and fixed mortgage rates.


In other words, don’t just pay the minimum required on your variable mortgage. Throw in the extra 1.5 per cent that you would pay on a fixed rate. Not only will you budget for interest rate hikes before they happen, you’ll hammer down your principal in the process.


Still fixated on switching to a fixed rate? 

If you’re still leaning toward a fixed rate, Nazareth recommends looking elsewhere than Canada’s Big 5 banks. 


Those mortgages come with huge penalties if you break the term to sell your home, renegotiate your mortgage or refinance for equity. That could be as much as $40,000 on a $700,000 mortgage, Nazareth warns. 


Variable rate penalties are only three months interest, in comparison.


There is a workaround for those who still want a fixed rate mortgage, however. Nazareth suggests working with a mortgage broker to secure funding through a monoline lender. 


Just like banks, monoline lenders are strictly regulated. However, they’re “not as aggressive on their penalty calculation so you can expect to pay less with a fixed rate from monoline lenders” should you need to break the term.


Nazareth also suggests choosing a shorter fixed-rate mortgage term, just in case interest rates go down again – which, as history has taught us, is bound to happen. 


“No one can tell the future,” he says. “However, remembering what goes up must come down and vice versa should give you limited scope in the eye of the storm.”


* Bank of Canada lowers overnight rate target to ¼ percent.


** OSFI unveils new stress test rules.