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 News, Mortgage Refinance, Uncategorized

Urgent Message on Mortgage Rates

As many of you may have seen in the media recently:


“Rates are going up,” and “Mortgage rates have to go up.”


We all know the media tends to focus on the negative – but rest assured, rate changes are nothing new for us as Mortgage Brokers, and this news does not change our client recommendations.


Is inflation high right now? Yes. But for the Bank of Canada to even consider raising the prime rate, we’d need to see sustained inflation for 6+ months to move the needle in any meaningful way.


For reference: a 0.25% increase in the prime rate = $12 increase per month per $100,000 mortgage borrowed.


Below just a few of the many reasons to maintain your variable rate mortgage – or refinance and get a new variable.



1) The primary reason: Once you lock into a fixed rate, your future potential prepayment penalty goes up 900% on average.


No client plans on breaking their mortgage, but over 70% of Canadians do for one reason or another, and over 85% of Canadians will either move or refinance every 3.5 yrs. In other words, the probability is high. Simply put, life happens.


2) If you lock in, you are self-imposing a rate increase that is 4 times greater than any Bank of Canada rate increase, as the average fixed rate is 1.00% higher than variable on average.


3) The prime rate would have to go up 9 times in the next 5 years for you to lose money comparatively (when comparing fixed to variable today).


4) If you are concerned about your payments going up, give me a call. We can lock into a variable rate around product 1.20 to 1.45% with a fixed payment 🙂 Win-win. We are happy to help with that at


5) If you think that the prime rate will go up, simply increase your payments now (maybe $200-300 a month). This way, you are paying off principal instead of interest while you wait, and you maintain the FAR superior terms and conditions of the variable product!


Pay off your mortgage (ie: put it in your pocket – not the bank’s profit margin).


6) The Banks/lender will call you to fear monger you into locking in your variable rate to a fixed within weeks of any prime rate increase:


Why? Because it is what is best for them, not you. The fixed rate is more profitable for the banks, especially the 5-year fixed.


Don’t get mad. They are a business, and a very successful one at that. Just buy more of their stock and enjoy the dividends.


The prime rate goes up and down – not that often, but it happens. The bottom line is that those who take a variable rate mortgage, pay less total interest than those who go fixed (every time for the last 50 years). PLUS they benefit from far superior terms and conditions – if life happens.


Life is Variable – Your mortgage should be too!


Stay strong – and stay the course 🙂


blog, Home Ownership, Mortgage News, Uncategorized

The ABC’s of Private and B-lending

The ABC’s of Private and B-lending


When it comes to securing a mortgage, most of us might think big banks are the only option. But what happens if those household-name financial institutions turn down your mortgage application?


The good news is dreams of home ownership, refinancing and/or debt consolidation don’t have to be put on hold. B-lending and private lending may be options when prime lending isn’t.


What is B-lending and Private Lending?


B-lending and private lending are alternative sources of mortgage financing for people who have bruised credit, or are purchasing or renewing a mortgage on a property that’s not in a prime location or may be designated mixed-use. B-lenders are major institutional players in the mortgage industry. They’re generally more forgiving of poor credit, approving mortgages for one- to three-year terms.


“If you don’t fit into A- or prime lending, we look to B-lending,” says Vern Bovell, mortgage agent with “It takes a short time for your credit score to take a hit but it takes a long time to bring it back up. If you have bruised credit, it takes one to two years to rebuild, and hopefully by then, we can put the client back into prime lending.”


Private lenders are individuals or mortgage investment companies who lend money based on the property, not the client. So if a person’s job status is in flux, it’s not a consideration for approval. “They want to know the condition of the property, the location of the property and equity on the property,” Bovell explains. “The more equity you have, the more likely you have a deal.”


Like B-lending, private lending is only temporary. Terms are typically one year. Conditions of a private mortgage include a fee for the loan, payments each month, plus interest at rates that are slightly higher than prime rates. That one-year private mortgage ultimately buys a client time to either improve their income status or sell the property, Bovell notes. After that, the loan is paid back and the homeowner ideally moves back to the prime lending space.


Who can apply for B-lending and Private Lending?


Candidates for these mortgages include borrowers whose credit rating has been affected by a previous bankruptcy or consumer proposal, or missed or late credit card and loan payments. Those with “unprovable income” would also be eligible for mortgages from alternative lenders. That includes people who are self-employed with a lot of write-offs, in the early years of their startup and lack a long enough income history for approval, and those earning lower incomes or who are often paid in cash.


The best way to determine which lender is best for you, however, is to connect with a qualified mortgage agent. “When certain criteria aren’t met, a client won’t qualify for prime lending,” Bovell says. “But I can have a conversation with alternative lenders who may provide a mortgage and that’s a definite benefit for borrowers.”


blog, Home Ownership, Mortgage News, Uncategorized

Get to Know Our West Coast Team

Matt Imhoff Has Always Liked Numbers and Math


The mortgage broker at our Vancouver office is also a big fan of planning and helping people with the big decisions in life. Take purchasing a home, for example.


It all makes Imhoff the ideal person to lead the team, now three strong and growing, on the West Coast.


“I’ve always been a planner and when you have a finger on the pulse of when decisions need to be made, I can help my clients with the bigger things,” Imhoff says. “It’s really about quarterbacking the whole purchase process and feeling more confident in what you’re doing by being aware of everything.”


Canadian Industry Leaders in Your Backyard


Imhoff, who’s licensed in British Columbia, Manitoba and Ontario, thrives on knowing what’s going on in the industry. When he’s not helping clients find the right financing for their home, he’s sharing his knowledge with other mortgage brokers in an effort to better them and the industry as a whole.

Imhoff’s knowledge is often tapped into by Mortgages Professionals Canada, which has hosted him as both a guest speaker and panelist in their continuing education courses.


He also has a knack for finding and developing talent. In the short time our Vancouver office has been operating, Imhoff has added two additional brokers, Eddie Han and Adam O’Neil, to the team. Both bring with them the extensive and diverse customer service experience that clients have come to expect from the team.


The team will expand again soon with another new broker who is in the final stages of the licensing process. Imhoff is currently scouting and coaching others to join our B.C. office. Together, they’ll help residents achieve their dreams of home ownership and support our Ontario office when people living there are looking to move or expand their real estate portfolio out West.


“We’re putting together a strong team with people who always put the client No. 1,” Imhoff says. “They focus on breaking things down in a way that’s easy for our clients to understand. This is about expanding and having brokers licensed in the province you’re living and working in.”


The Benefits of Working With a Local Broker


It’s advantageous to work with someone who, quite literally, knows the lay of the land, he added. That could be knowing Vancouver’s neighbourhoods or, on a larger scale, the geography of B.C. right down to when and where potential threats to deals, including this summer’s devastating forest fires, are happening.


“It’s being aware of these things and doing extra due diligence versus a broker who doesn’t know the area and can put the client at risk,” Imhoff says.


What it comes down to is taking care. And that’s what Imhoff and his team do best.


“It’s not about me and what I’m making in commission,” he says. “It’s about (clients) and are they being taken care of? I want any interaction, big or small, to be positive. I’m on their team regardless of which direction they go.


“This isn’t about a transaction,” he adds. “This is a lifelong relationship in which they know they can trust me to help them.”


Upcoming Mortgage Professionals Canada continuing education course featuring Matt Imhoff of


Mortgage Professionals Canada 2021 Fall Virtual Mortgage Symposium, Oct. 13 and 14, 2021


Everything you should know about Prepayment Penalties Pt. 2


blog, Home Ownership, Mortgage Education, Mortgage News

Cameron Miller Q&A

There’s no question the pandemic has changed the real estate market in the Greater Toronto Area.


We’ve asked some of our real estate partners how the market has adapted in the past 15 months, and what advice they might have for homebuyers and sellers in this new normal.


Who: Cameron Miller


Title: Sales Representative, Realty Inc.;


Area: Downtown Toronto


Specialty: Condos, pre-construction and re-sale


What are some of the changes or precautions we’re seeing taken in the home-buying and selling process right now at this point in the pandemic?


Something that has changed is virtual showings. So when sellers are showcasing their property online, they need to have those virtual tours with their listing. A lot of my clients have bought apartments off of a 3-D tour. It’s nothing that’s going to disappear anytime soon. Buyers need to get comfortable with buying virtually because that’s just the world we live in with COVID.


What do you need to keep in mind when doing these virtual tours? For sellers, how do you have a really great virtual tour?


We need to make the space look as optimal as possible. How do the buyers envision their living room? They want to know where their TV is; they want to know where their couch is. They want those ideas. So a property that’s a one-bedroom condo that’s catered to a guy that’s going to live downtown, you want to stage the property to attract that type of buyer. And in the virtual tour, it’ll show.


So on the flip side, when you’re a buyer, any tips or things to pay attention to, especially if a property doesn’t translate well to a virtual tour?


Virtual tours don’t usually tour the building. So I think if you’re speaking about a condo, doing research on the building is very important. What amenities do they have? How many people are in the building? Who is the property manager? What’s the track record of the property manager? Things like that. It’s important.


In the news, we often hear the terms seller’s market or a buyer’s market. Can you tell us what those mean?


A seller’s market is when there’s more demand than listings, so there are fewer sellers than buyers. That means buyers are competing. A buyer’s market is the complete opposite. It’s when there are more sellers than buyers. We saw that in the rental market last year. The rental market was not plummeting, but doing sort of a nosedive. And it was very much a buyer’s market, or a tenant’s market.


Has there been one type of market in particular that’s dominated during the pandemic?

The cottage market has dominated during the pandemic. It seems like people want more space and appreciate sanctuary living rather than high-density living in the city. Areas like Muskoka, Collingwood, Blue mountain, etc., have experienced tremendous growth in the past year.


Is that still the case or has it switched at all?

I’m noticing in the rental market, it’s definitely stabilized. Buying and selling, there was a time where it was more of a buyer’s market than a seller’s market. It was a very brief time last year that that happened but it went back to a seller’s market very fast. Listings started disappearing very quickly, especially January to March of this year.


The cottage market continues to boom as people’s needs for a home away from the city continues to grow.


Where are things at right now?

Right now it’s an interesting time. Things have cooled down since the first quarter of the year. But maybe buyer fatigue has set in, where buyers are tired of going over asking (price). In the condo market, Listings have increased, demand has slightly dropped but prices have stayed, so we’ll see what happens.


What are some words of wisdom or advice you have for a first time home buyer?

Understand the process because the market — and I’m specifically speaking about the downtown condo market — it’s competitive. That means they would need their ducks in a row beforehand. They need to get pre-approved (for a mortgage). They need to understand the process, and they need to have a deposit check in hand. They need to review the status certificate beforehand, know who their real estate agent is, and know who their lawyer is.


What are your thoughts on the post pandemic real estate market? We often hear about pent-up demand. Is there going to be a correction or will it be full steam ahead?

Nobody has a crystal ball with these things but Toronto Real Estate Board Chief Market Analyst Jason Mercer said prices will probably continue to trend upwards as the city starts to grow and things start to open up. We didn’t really have a big population growth last year. But the population continues to grow and the supply continues to shrink when the people who come here absorb it, so prices are probably going to grow.