12 May

Ontario’s Housing Legislation: Faster Builds, Fewer Delays

Posted by: Michael Greene

Big changes are coming to the housing market by way of the Ontario’s Housing Legislation. On Monday, the province is introducing sweeping new legislation aimed at fast-tracking construction and tackling the housing crisis head-on. Whether you’re a buyer, builder, or investor, this move is worth watching.

The headline? Ontario’s Housing Legislation—officially called the Protect Ontario by Building Faster and Smarter Act—is giving the province more control over how, where, and how fast housing gets built.

What’s Changing Under Ontario’s Housing Legislation?

Expanded Minister’s Zoning Orders (MZOs): The province is doubling down on its use of MZOs, which allow them to override municipal planning processes and fast-track developments. That means less waiting, more building.
Standardized Development Charges: Development fees (used by cities to fund sewers, roads, and other services) will be standardized and paid at the end of construction, not upfront. This move aims to ease cash flow for builders—but could strain municipal budgets in the short term.
No Extra Studies or Local Rules: Municipalities will no longer be able to require additional studies or construction requirements that go beyond Ontario’s provincial building code. It’s one set of rules across the board.
School Boards Get More Power: School boards can now bypass some municipal approvals to add portables or new school buildings more quickly—great news for growing communities.
“Buy Canadian” Focus: The bill encourages the use of Canadian-made building materials to support local industry and stabilize supply chains.

Why Ontario’s Housing Legislation Matters

For homebuyer, this legislation could accelerate the pace of new housing, especially in high-demand areas. More housing options usually help cool prices and increase inventory—though there are still a lot of moving parts.

For builder or investor, these changes reduce financial pressure up front and potentially make projects more feasible. Less red tape means faster timelines—but you’ll need to keep up with new provincial regulations.

For municipal leader, this is where it gets tricky. Cities rely heavily on development fees to fund local infrastructure. Delaying that revenue could impact roads, water systems, and other vital services unless the province steps in to help.

What the Province Is Saying

Rob Flack, Ontario’s Minister of Municipal Affairs and Housing, called it a bold step to tackle economic uncertainty and accelerate home construction. “We are pulling out all the stops,” he said, noting that the plan responds to feedback from municipal leaders who are also looking for faster housing solutions.

Vaughan’s mayor called the legislation “bold and creative,” while Mississauga’s mayor welcomed it as “much needed support” to cut red tape.

My Take as a Mortgage Agent:

Ontario’s Housing Legislation sends a clear message: the province is willing to take the wheel to hit its housing targets. For buyers, it may mean more supply and slightly more breathing room in the long term. For developers, it’s a boost in momentum. For cities—well, the transition could be rocky, but the goal is clear: build more, faster.

It’s too early to say how everything will unfold, but one thing’s certain—if you’re thinking about buying, building, or investing in Ontario real estate, staying informed will be your biggest asset.

Have questions about how this might impact your mortgage strategy, construction financing, or investment property planning? Reach out—let’s talk about how to stay ahead in a fast-changing market.

30 Jan

Variable Rate Mortgage Holders Celebrate With Rate Announcement

Prime Rate Drop: What Homeowners and Buyers Need to Know

On Wednesday, Canada’s six major banks announced a quarter-percentage-point reduction in their prime rates, dropping from 5.45% to 5.2%. This follows the Bank of Canada’s decision to lower its key interest rate for the sixth time since June, bringing it down to 3%. The central bank stated that inflation is hovering near its 2% target as the economy gains momentum.

This change will likely result in lower variable mortgage rates across Canadian lenders. My calculations show that for a homebuyer who made a 10% down payment on an average Canadian home, priced at $700,0000 as of December 2024, the reduction would translate to roughly $83 less in monthly payments on a five-year variable mortgage.

While fixed mortgage rates are expected to decrease slightly, driven by bond yields dropping to around 2.8% following the central bank’s announcement, investors are concerned that inflation may limit any significant drops in fixed rates.

Homeowners with variable-rate mortgages are likely to feel the impact immediately. Those with adjustable-rate mortgages will see their monthly payments decrease, while those with a fixed payment schedule will have more of their payment applied to the principal rather than interest.

For example, I estimate that a homeowner with a variable mortgage rate of 4.45% over 25 years, currently paying $3,458 per month, would see their rate drop to 4.2%, lowering their payments to $3,371—a savings of $1,044 per year.

Homeowners with a variable-rate mortgage can expect to save around $16 per month for every $100,000 of mortgage debt with each quarter-percentage-point decrease. He also noted that this rate cut arrives at a time of economic uncertainty, though there’s potential for growth in home sales.

“These successive rate cuts are good news for homeowners and those renewing their mortgages,” Tran said. “While the housing market is showing signs of life, it’s not the frenzy some anticipated. Buyers are in a strong position to take their time finding the right property and making conditional offers on financing and inspections.”

Since the peak of borrowing costs in August 2023, homeowners who put a 10% down payment on an average-priced home with a five-year variable mortgage have seen their payments drop by $680, according to research. At the height of rates, a 5.95% variable mortgage on a $660,000 home would have resulted in monthly payments of $3,850. With current rates at 3.95%, that figure has dropped to $3,155.

Phil Soper, president and CEO of Royal LePage, said the Bank of Canada’s latest rate cut could boost borrowing power for homebuyers. “This decrease comes right before the spring housing market, a time when demand typically increases. We should expect an uptick in buying and selling activity in the coming weeks,” Soper noted.

However, be cautioned by the potential U.S. tariffs expected to transpire on February 1st, 2025. A remain concern for both the central bank and consumers, adding an element of uncertainty to the housing market.

In conclusion:

With the latest rate cuts from the Bank of Canada and the major banks following suit, homeowners and buyers are seeing tangible relief in their mortgage payments. While variable-rate mortgage holders stand to benefit the most, even fixed-rate borrowers could see slight reductions. As the spring housing market approaches, this rate drop may help boost real estate activity, giving buyers more flexibility and negotiating power. However, lingering economic uncertainties, such as potential U.S. tariffs, remain in the background, reminding consumers to stay cautious as they navigate the evolving market.

Whether you’re considering refinancing, renewing, or entering the housing market, connect with a Mortgage With Mike today to explore how these changes can benefit you.

26 Jan

Considering a Private Mortgage?

General

Posted by: Michael Greene

What you need to know about an alternative or private mortgage?

Borrowers who are unable to qualify for a traditional bank mortgage may need to consider an alternative or private mortgage for their financing. If this is your case, remember that these mortgages are supposed to be a short-term financing solution. These loans are often easier to qualify for and can be completed in a short period of time, keep in mind though, they do come with higher interest rates and fees. It’s always suggested that you work with an experienced mortgage professional and a knowledgeable lawyer as alternative/private loans come with additional conditions and restrictions.

Be informed about a private mortgage

Before getting an alternative or private mortgage, be aware of the following:

An alternative or private mortgage is a temporary option and should only be kept for one or two years until you fix your finances or credit in order to refinance at the bank.
Private mortgage is often based on the accumulated equity in your home, and not your credit or income.
Most mortgages are interest only, so you are paying to borrow the money and not paying down on the amount you borrowed.
Fees are usually higher than with a traditional mortgage. Additional fees include late payments, laps in insurance or property tax.
Consider a realistic “Exit Strategy” to get out of the alternative or private mortgage. This way you can create a plan you should be working towards and get a lower rate option.
Always work with a Level 2 mortgage agent when considering an alternative/private mortgage.

What could happen if you are unable to “exit” a private mortgage?

What to watch out for with a private mortgage?

Pay attention to the details of your mortgage contract: it could save you money or costs you money. Always ask yourself the following:

What are all the fees associated with getting and closing on your mortgage?
What happens if I miss a payment?
Is my approval based on my equity or my ability to make the interest payment?
What is the costs for being late or missing a payment?
How long after I default on the mortgage does the power-of-sale process start?
Is my exit plan achievable? For example, do you have a plan to increase you income by maturity? Do you have the income to reduce your debts and fix your credit during the loan term? Is you goal realistic and can be achieved before the end of the term? The plan you create is vital to getting out of a private mortgage, it give you the qualifications you need to refinance with a bank.

The mortgage agent you decide to work with should give you a clear explanation of the terms, conditions, and fees associated with your contract. They should also be able to point out all of the risks, why they place you in a particular mortgage, and work with you beyond your mortgage closing to guide your to refinance.

Ask questions when getting a private mortgage?

Here are some key questions you should ask your mortgage agent/broker when getting an alternative or private mortgage

Why are you considering a private mortgage and not a traditional mortgage?
What are the terms? Length of time, interest rate, repayment schedule, direct deposit, collateral, guarantors, etc.
What are the fees associated? Lender, broker, etc.
Am I able to renew for another term at maturity?
What are the renewal fees?
Do I have an experienced layer to close on my mortgage transaction?
What happens if I’m late and/or default on my mortgage payment? Could I loose my home?
How long do I have to consider the mortgage contract and run it by my lawyer?
What if I an unable to exit at the end of the term?
What If I complete renovations on my home? How does this impact my mortgage?
Am I able to get a traditional mortgage at maturity?
Will I need a co-signer in order to refinance?

Getting an alternative/private mortgage should not be taken lightly. Often getting back to a traditional lender involves effort and dedication on your part.

Conclusion

In conclusion, securing an alternative or private mortgage can be a viable solution for borrowers who may not qualify for traditional financing. However, it’s important to understand that these loans come with higher costs, additional fees, and potential risks. They are designed as short-term solutions, and the key to success is having a clear exit strategy and a plan to improve your financial situation so you can refinance with a traditional lender.

Working with a knowledgeable mortgage agent and legal professional can help you navigate this complex process, ensure you’re well-informed, and avoid costly mistakes. Don’t hesitate to ask the necessary questions to fully understand your obligations and options.

If you’re considering an alternative or private mortgage, reach out today for a free consultation. Let’s discuss your options and help you develop a clear plan to secure the best possible outcome for your financial future.

Don’t wait—take the first step toward refinancing success!

4 Nov

Condo in Crisis: What to Do if Your New Purchase Faces Receivership

Pre-Construction

Posted by: Michael Greene

Is Your Condo Project Facing Receivership?

Picture this: You’ve been excitedly waiting for your new condominium to be completed in just a few months. All day, you’ve been imagining how you’ll decorate it, learning about local shops, and planning your housewarming party. Then, suddenly, the builder stops sending updates. You turn on the news and discover that your condo project has gone into receivership.

This exact situation happened to one of my clients, someone I had been working with on other pre-construction purchases. Unfortunately, it’s becoming an all-too-common story as real estate receiverships increase across Canada.

But before you panic, let’s break down what this means for you.

Understanding Receivership: What It Means for Your New Condo

Receivership occurs when a secured creditor appoints a receiver to take control of a property, typically to sell it and recover the funds owed by the developer. A receiver is usually a property expert who steps in to manage the project’s finances and steer it back on track.

Think of receivership as a financial lifeline for a troubled project. If a developer can’t meet its debt obligations, a court appoints a receiver to take control of the situation. Receivership is serious and not every developer qualifies for it, but when granted, the receiver analyzes the project’s finances to determine whether it’s feasible to complete it. If the costs are too high, drastic measures may follow.

Types of Receivership

There are two types of receivers:

Court-appointed receiver: A court officer who must report to the court throughout the process. The receiver’s fees usually take 25% of the collected funds, plus expenses, paid by the judgment debtor.
Privately-appointed receiver: Appointed by a secured creditor, this type focuses on recovering debts.

One Example:

Last year, the Iconic “The One” skyscraper project at Yonge and Bloor in Toronto entered receivership due to $1.6 billion in unpaid debt. A court-appointed receiver took control after the developers defaulted. Today, construction continues, with an expected completion date in March 2025.

What Happens When Your Condo Goes Into Receivership?

When a condo project enters receivership, the future of pre-sale contracts depends on the receiver’s decision. They can either continue or cancel the project:

Continue: If the receiver chooses to proceed, existing agreements remain in effect.
Cancel: If the project isn’t financially viable, the agreements may be terminated. In this case, buyers might claim their deposits and potentially take legal action, but recovering funds can be difficult given the developer’s insolvency.

A receiver, not the developer, has the authority to sell the project to another builder or take control of the assets. They may also seek Debtor-in-Possession (DIP) financing, allowing the developer to remain in control while restructuring to complete the project.

DIP loans, though regulated and costly, give developers the funds and time to finish a project in receivership. These loans are more likely to be approved for developments in high-demand areas, as stopping construction in such locations reflects poorly on local governments.

Protecting Your Financial Interests

When you enter a new construction property agreement and provide a deposit, programs like Tarion in Ontario offer protection. According to Tarion’s website, protection applies if:

The builder goes bankrupt.
The builder fundamentally breaches the purchase agreement.
You have a statutory right to treat the agreement as terminated.

For freehold homes purchased after January 1, 2018, Tarion covers deposits up to $50,000 or 10% of the purchase price (to a maximum of $100,000 for homes over $600,000). Condo buyers enjoy extra protection under the Condominium Act, which mandates that developers hold deposits in trust.

Developers must also provide a Delayed Occupancy Warranty, ensuring your condo is ready for occupancy by a specified date. If the developer misses this deadline due to construction delays or receivership, they must compensate you. A PDF copy of the warranty can be downloaded here for your reference.

Steps to Take When Your Condominium Goes Into Receivership

If your condo goes into receivership, here are steps to safeguard your investment:

Contact the Receiver
Reach out to the court-appointed receiver to get updates on the project. They can inform you about the next steps.
Review Your Purchase Agreement
Carefully examine your contract for any clauses about delays, receivership, or deposit protection. This helps clarify your rights.
Check for Deposit Protection
Verify whether your deposit is covered by programs like Tarion, and file a claim if necessary.
Consult Your Real Estate Lawyer
A lawyer specializing in real estate or condominium law can guide you through your legal options, including deposit recovery or claims against the developer.
Stay Informed
Keep up with updates from the receiver. They may attempt to sell the project to another builder or secure additional financing to complete it.
Prepare for Delays
Be ready for significant delays or, in the worst case, the cancellation of the project.
Understand the Possible Outcomes
If the project continues, expect delays. If it is canceled, you may be eligible for a refund, though recovery amounts will vary based on the developer’s financial state.
Consider Legal Action for Damages
In rare cases, buyers may pursue additional damages beyond their deposits. However, this depends on the developer’s solvency and the available assets.

To Sum It All Up

Receivership is often a temporary measure, aimed at getting the project back on track. While dealing with a property receivership can be overwhelming, staying informed, seeking legal advice, and understanding your rights can help protect your investment. Whether the project moves forward or gets canceled, having a clear plan will ensure you’re ready for whatever comes next.

If your condo project is in receivership or you have questions about real estate investments, reach out to Mortgage With Mike today. Our team is here to help you through every step of the process, protecting your financial interests. Schedule your free, no-obligation 15-minute consultation now!

18 Oct

Federal Housing Measures Support Secondary Suites, Vacant Land Taxes, and More Homes on Public Lands

Easier Refinancing for Secondary Suites

If you’ve ever thought about turning that empty basement or unused garage into a rental suite, this one’s for you. One of the most exciting changes is the recent municipal zoning reform that makes it easier to refinance your mortgage to fund these kinds of projects. This is made possible through Housing Accelerator Fund agreements.

Here’s the deal: you can now access up to 90% of your home’s value, including the value of that future rental suite, through refinancing. This means more cash in hand to get your renovations going!

On top of that, you can now stretch the loan out over 30 years. Longer amortization = lower monthly payments, which is always a win. Oh, and if you’re worried about mortgage insurance limits holding you back, don’t be. The government has bumped the mortgage insurance limit up to $2 million, so homeowners in pricier markets won’t get left behind.

As Deputy Prime Minister Chrystia Freeland said, “We’ve got to use every tool in the box to make housing more affordable for Canadians.” And this is definitely one of those tools!

Tax on Vacant Land to Spur Development

Now, onto the vacant land tax. If you’re sitting on some unused land, the government is about to give you a nudge to do something with it. The idea here is simple: introduce a tax on vacant land to push landowners into developing residential properties, instead of just letting the land sit there.

The feds are working with local governments to figure out how this could work in different areas. So, don’t be surprised if you start hearing more about it from your local city hall.

To take advantage, Canadians can participate in consultations with municipalities and the federal government to help shape the implementation of vacant land taxes, ensuring fair regulations while incentivizing new development in local communities.

Repurposing Federal Properties for Housing

Last but not least, the government is making more federal properties available for housing development. We’re talking about 14 new properties, from places like Ottawa to Cape Breton. These properties will join the Canada Public Land Bank, which already has 70 spots ready to be turned into homes.

Public Services and Procurement Minister Jean-Yves Duclos summed it up nicely: “We’re unlocking public lands for housing at a pace we haven’t seen in generations.” Translation: they’re serious about tackling the housing crisis and creating more affordable housing options across the country.

In conclusion, the federal government’s new housing measures represent a significant step towards addressing Canada’s housing challenges. By making it easier for homeowners to build secondary suites, taxing vacant land to encourage development, and unlocking federal properties for housing, these initiatives aim to increase housing supply, improve affordability, and create stronger communities. For homeowners, these changes provide new opportunities to maximize their property’s potential, generate additional income, and contribute to the solution for Canada’s housing crisis. Together, these measures reflect a proactive approach to making housing more accessible and affordable for Canadians, now and in the future.

As we continue to navigate this unpredictable journey of interest rates, our commitment to your financial success remains steadfast. Whether rates rise or fall, the Bank of Canada rate cut impact on mortgages will influence your decisions. Partnering with a knowledgeable mortgage broker like Mortgage With Mike will empower you to make informed decisions in this evolving landscape. Your mortgage is a fundamental aspect of your financial future, and it’s essential to ensure it’s built on solid ground.

Get in touch with us today to discover how we can assist you on your journey to homeownership.

1 Oct

Boldest Mortgage Reforms in Decades Set to Unlock Homeownership for All Canadian First-Time Homebuyers and Buyers of New Builds

First-Time Homebuyers

Posted by: Michael Greene

These mortgage reforms, touted as the boldest in decades, aim to unlock homeownership for all Canadian first-time homebuyers and buyers of new builds by address housing affordability and ease the path to securing to homeownership. In an effort to making it easier to qualify for a mortgage, significant reforms are being introduced across Canada, specifically targeting first-time homebuyers and buyers of newly constructed properties. These mortgage reforms represent a transformative shift and aim to expand access to mortgage options, increase affordability, and stimulate the housing market.

New Mortgage Reforms is Expanding Eligibility from 25- Year to 30-Year Mortgage Amortization

A major highlight of these mortgage reforms is the expansion of 30-year mortgage amortizations for all first-time homebuyers and those purchasing newly built homes. This measure will provide more flexibility for borrowers who need high loan-to-value mortgage insurance. Under the current rules the first-time buyers and buyers of new builds applying for an insured mortgage have to qualify using 25-year amortization.

To qualify under the new reform, borrowers must meet the following criteria:

The total loan-to-value ratio must be 80% or more.
The borrower must either be:
1. A first-time homebuyer, or
2. Purchasing a newly constructed home.

Definition of a First-Time Homebuyer

Under this reform, a first-time homebuyer is defined as someone who meets at least one of these conditions:

The borrower has never purchased a home before.
In the last four years, the borrower has not lived in a home that they or their spouse/common-law partner owned.
The borrower has recently experienced a breakdown in a marriage or common-law partnership, similar to the rules used in the Canada Revenue Agency’s Home Buyers’ Plan.

Definition of a Newly Constructed Home

A property will be classified as a newly constructed home if it has not been previously occupied for residential purposes. Importantly, newly constructed condominiums with an interim occupancy period will still qualify.

The New Mortgage Reforms will Raise the Insured Mortgage Price Cap From $1 Million to $1.5 Million

In response to the rising cost of homes in Canada, the price cap for insured mortgages will increase from $1 million to $1.5 million. This change applies to borrowers requiring high loan-to-value mortgage insurance and is expected to benefit buyers in competitive housing markets.

To qualify for this new price cap, borrowers must adhere to these conditions:

The loan-to-value ratio must be 80% or higher.
The residential property’s value must be less than $1.5 million.
Down payment requirements are structured as follows:
- 5% on the portion of the purchase price up to $500,000.
- 10% on the portion between $500,000 and $1.5 million.

When Will the Mortgage Reform Measures Take Effect?

These groundbreaking reforms will take effect for mortgage insurance applications submitted to mortgage insurers like CMHC on or after December 15, 2024. Importantly, these measures will only apply to high loan-to-value mortgages on homes occupied by the borrower or a close family member. All other existing eligibility criteria for government-backed mortgage insurance will remain unchanged.

Advocacy for Housing Affordability

As these new measures roll out, organizations such as Mortgage Professionals Canada (MPC) will continue advocating for policies that make homeownership more attainable. By supporting reforms like these, MPC aims to put more money back into Canadians’ pockets, improve housing affordability and accessibility, and maintain high standards within the mortgage industry.

This reform package marks the boldest effort in decades to unlock homeownership for all Canadian first-time homebuyers and buyers of new builds, and is expected to have a lasting impact on Canada’s housing market.

Easing Mortgage Accessibility for Canadian First-Time Homebuyers

With skyrocketing home prices and stringent lending rules, many first-time buyers have been left on the sidelines. However, the latest reforms bring a fresh perspective, designed specifically to unlock opportunities for this demographic. By expanding qualification criteria and reducing the stress test burden, these changes aim to boost accessibility to mortgage financing, especially for those entering the housing market for the first time.

Unlocking Homeownership for Buyers of New Builds

One of the standout features of the recent reforms is the attention given to buyers of new construction homes. Previously, buyers of new builds faced unique challenges in financing, often tied to the unpredictability of construction timelines. Under the new regulations, buyers of new homes will have greater flexibility in mortgage terms and pre-approvals, making it easier to secure financing without the fear of delays or unexpected costs.

Long-Term Impacts of the Bold Mortgage Reforms

These reforms are poised to have long-lasting effects on the Canadian housing market, particularly in urban areas where demand for affordable housing is high. Check out Wowa for in-dept stats. By simplifying mortgage qualification and offering more flexible financing options, the government hopes to stimulate both supply and demand, leading to increased construction of new homes while helping first-time homebuyers overcome financial barriers.

A Path Forward for All Canadian Buyers

Whether you are a first-time homebuyer or looking to purchase a newly built home, these bold mortgage reforms promise to unlock new possibilities. With more accessible mortgage options and a clear focus on affordability, Canada’s housing market is on the verge of becoming more inclusive for all buyers.

Final Thoughts: Seizing the Opportunity for Homeownership

The boldest mortgage reforms in decades have created a golden opportunity for Canadian first-time homebuyers and buyers of new builds to finally achieve their homeownership dreams. These changes not only make mortgages more accessible but also pave the way for more affordable housing options across the country.

If you’ve been waiting for the right moment to buy your first home or secure financing for a new build, now is the time to act. Don’t let this opportunity pass you by!

Ready to Unlock Your Dream Home?

Contact us today to learn how these bold new mortgage reforms can help you take the next step toward homeownership. Whether you’re a first-time buyer or interested in a new build, Mortgage with Mike is here to guide you through the process.

Get in touch with us today and unlock your path to homeownership!

1 Aug

New 30-Year Amortization Incentive for First-Time Home Buyers in Canada

General

Posted by: Michael Greene

Advocates are commending Ottawa’s Department of Finance decision to extend the amortization period on insured mortgages for some homebuyers, while suggesting that expanding this policy to all Canadians would enhance home ownership affordability.

During a speech in Toronto on Thursday, Finance Minister Chrystia Freeland revealed that the federal government will now permit a new 30-year amortization incentive for first-time home buyers of newly built homes. This policy will be effective from August 1.

Presently, if a down payment is less than 20% of the home’s price, the maximum amortization period allowed is 25 years.

Freeland acknowledged the housing challenges faced by young Canadians, stating, “With a lack of housing options and soaring rent and home prices, younger Canadians feel disadvantaged. Extending amortization will make monthly mortgage payments more manageable for those aspiring to own their first home.”

Lauren van den Berg, CEO of Mortgage Professionals Canada, praised the initiative as a positive development and emphasized that extending the amortization period will create more opportunities for first-time homebuyers and stimulate economic recovery. However, she argued for a broader application of the policy to include all homebuyers, not just those purchasing new builds.

Van den Berg pointed out that in regions like Greater Vancouver and Greater Toronto, where vertical construction is more common, new builds are less prevalent, thus necessitating a broader policy application.

Victor Tran, a mortgage and real estate specialist at Ratesdotca, expressed concerns about the limited impact of the policy due to its specific eligibility criteria, noting that insured mortgages for new builds are uncommon. Tran also highlighted that many properties in high-cost areas such as Vancouver and Toronto exceed $1 million, leading buyers to opt for uninsured mortgages.

Conversely, Kevin Lee, CEO of the Canadian Home Builders’ Association, deemed the announcement transformative, arguing that longer amortization periods would aid affordability and encourage more construction. Lee noted this policy could also assist in meeting the government’s objective of building 5.8 million new homes in the next decade and alleviate the rental market by transitioning renters into homeowners.

In addition to the amortization changes, Freeland announced an increase in the amount first-time homebuyers can withdraw from their RRSPs, raising it from $35,000 to $60,000, effective April 16, coinciding with the federal budget release. This change reflects the growing size of down payments and the longer time required to save for them. Individuals who have made or will make withdrawals between January 1, 2022, and December 31, 2025, will now have up to five years to begin repayment, instead of two.

These amendments are designed to complement the First Home Savings Account, introduced last year, which allows prospective homebuyers to save up to $8,000 annually with a lifetime limit of $40,000. To date, over 750,000 Canadians have opened an FHSA since it became available last year.

Ottawa also announced modifications to the Canadian Mortgage Charter, including provisions for permanent amortization relief for eligible homeowners, allowing them to reduce their monthly mortgage payments to a more affordable level indefinitely.

Get in touch with us today to discover how we can assist you on your journey to homeownership.

24 Jul

How the Bank of Canada Rate Cut Will Impact Your Mortgage?

General

Posted by: Michael Greene

Understanding the impact of the Bank of Canada rate cut on your mortgage is important. In an increasingly complex mortgage market, one major factor influences many Canadians’ ability to own their homes: interest rates. The recent drop in the Bank of Canada’s (BoC) prime rate by 25 basis points to 4.5% has a significant ripple effect on mortgage costs, impacting both current homeowners and prospective buyers. In this blog, we’ll explore the intricate relationship between interest rates and mortgages, providing you with the insights you need to navigate this evolving landscape.

The Prime Rate and Its Wider Implications

Many Canadians believe that the Bank of Canada prime rate is the primary driver of mortgage interest rates across the country. However, mortgage interest rates—especially fixed rates—are influenced by a myriad of broader economic factors and trends. Notably, changes in the Band of Canada prime rate also affect the interest rates that banks and credit unions offer on savings accounts and other loans, including credit cards. When the prime rate shifts, mortgage lenders typically adjust their rates accordingly.

For instance, most lenders will raise their standard variable or decrease rates in line with any changes in the prime rate. Conversely, variable rate mortgages will adjust based on the prime rate. However, the most noteworthy recent change has been in the 5 year fixed-rate products, which have shown a notable decline after the BoC interest rate increases.

Bank of Canada Rate Cut Impact on Existing Mortgages

For current homeowners, a drop in the prime rate can directly impact monthly mortgage payments, particularly for those with variable or tracker-rate mortgages. The Bank of Canada rate cut impact on mortgages means that if your mortgage is linked to the prime rate, you might see a reduction in your payments, which can free up some financial space in your budget.

On the other hand, if you have a fixed-rate mortgage, your payments remain unchanged, providing stability in this fluctuating market. Fixed-rate mortgages allow homeowners to know exactly what their monthly payments will be for the agreed-upon term, protecting them from unexpected increases.

Interestingly, the recent drop in the prime rate has influenced fixed rates positively, with some lenders lowering their fixed-rate offerings, even though they remain higher than they were just a year or so ago. If your fixed mortgage is set to expire soon, it’s wise to explore your options for refinancing, as current rates might still offer a more favourable deal.

Taking Control of Your Mortgage Strategy

With the BoC’s prime rate now at a lower point, homeowners should take the opportunity to reassess their mortgage and overall financial strategy. Here are a few steps you can take:

Explore Fixed Rate Stability: If you’re currently on a standard variable rate or an adjustable rate mortgage, now might be an ideal time to consider switching to a fixed-rate mortgage. This could provide the stability and predictability you need in today’s market.
Balance Stability and Security: If you’re already in a fixed-rate mortgage, think carefully before making any changes. While these products offer security against rising rates, they can come with penalties for early repayment, which may limit your ability to take advantage of falling rates.
Forecast Your Financial Future: Consider your long-term financial goals and any potential changes in your life circumstances, such as career shifts, family growth, or home renovations. Aligning your mortgage strategy with your broader financial vision is crucial.
Unveil Alternative Options: Look into alternative mortgage products, such as reverse mortgages, which use your age and equity to give you a no payment option, or hybrid options that combine stability with flexibility.
Seek Expert Guidance: Navigating the mortgage landscape can be daunting, especially with recent changes. Our experienced team at Mortgage With Mike is here to help you understand the diverse range of mortgage options available to you.

Guiding Aspiring Homebuyers Through Bank Of Canada Rate Cut

For many Canadians, the most significant hurdle in becoming homeowners is saving for a down payment. However, fluctuating interest rates, particularly with the recent BoC adjustments, can also present new challenges. As lenders adjust their affordability criteria in response to rising living costs, it’s essential to understand how the Bank of Canada rate cut impact on mortgages might affect your borrowing capabilities. The most important factor to consider of qualifying is the stress test, which is measured by the mortgage debt ratios.

This is where expert advice becomes invaluable. A knowledgeable mortgage broker can help you assess your risk tolerance regarding interest rate changes and tailor a mortgage plan that aligns with your financial aspirations.

Navigating the Market: Practical Steps

As you navigate the dynamic mortgage landscape, here are some practical steps to consider:

Stay Informed: Keep an eye on announcements regarding the prime rate. Our experts can help you interpret how these changes impact your mortgage.
Review Your Mortgage Regularly: Conducting regular reviews of your mortgage can help identify opportunities to adjust your financial strategy. Sometimes, it may be worthwhile to pay a fee to exit an existing mortgage if you can secure a better rate.
Consult Experts: For potential homeowners, seeking expert advice is crucial. Our website offers tools like a mortgage calculator to help you understand how rate changes will impact your monthly payments. Our team can guide you on how these shifts influence your borrowing capacity.
Consider Your Future: Major life events can significantly affect your mortgage strategy. Always consider these factors in your decision-making process.
Explore Mortgage Options: Don’t settle for the first mortgage option you encounter, especially when it’s time to remortgage. Explore various products to find the one that suits your needs best.

Get in touch with us today to discover how we can assist you on your journey to homeownership.

20 Jun

Unlock Savings: Top Refinance Options for Homeowners in 2024

Refinancing

Posted by: Michael Greene

Unlock Savings: Top refinance options for homeowners to consider in 2024. Hey there, fellow homeowners! If you’re reading this, you’re probably wondering if refinancing your mortgage is the way to go. Spoiler alert: it just might be! As a friendly mortgage broker who’s seen it all, I’m here to guide you through the maze of refinancing options. According to reports Mortgage delinquency rates in Ontario exceed $1B. Should we be concerned? This is a sign the more Canadian households than ever before, need help to navigate this interest rate environment and making an informed decisions that will save them money. Believe me, you don’t want to be one of those Canadians leaving money on the table by not negotiating their mortgage renewal rates

So, let’s dive in and find the perfect solution for you. And don’t worry, I promise not to bore you with too much mortgage jargon—unless you’re into that sort of thing!

1. Rate-and-Term Refinance

Think of this as the “classic combo” of refinancing. You’re simply swapping out your current mortgage for a new one with a different interest rate or term. It’s like upgrading your old phone without changing your number—same house, just better payments.

Why You’ll Love It:

Potentially lower monthly payments (more money for that Tim Hortons run!).
Or, you could speed up your loan payoff—because who wants a mortgage forever?

Why You Might Not:

There are some closing costs, kind of like paying for a nice meal out. However, some banks do give you a credit of up to $3,000 to go towards your total costs.
You’ll need a decent credit score—time to pay those credit card bills!

Perfect For: Homeowners looking to save on interest or those eager to get rid of their current bank mortgage faster because of a not so favourable renewal rate coming up. Who doesn’t like the sound of that?

2. Equity Refinance Option

Need to consolidate your high interest credit cards or some extra cash for that kitchen reno or maybe a dream vacation? With an equity refi, you borrow more than you owe and pocket the difference. Think of it as turning your house into an ATM—but one that actually improves your financial picture (unlike the usual ATMs that just eat your card).

Why You’ll Love It:

You get a chunk of cash for whatever you need—renovations, debt consolidation, tuition, or maybe that classic car you’ve been eyeing.
It’s often at a lower interest rate than your average credit card or personal loan. Who needs high-interest debt, anyway?

Why You Might Not:

It increases your mortgage balance and monthly payments. Remember, you’ll have to pay it back!
It taps into your home’s equity. So if the housing market takes a dip, you might owe more than your home’s worth. Yikes!

Perfect For: Homeowners with significant equity who need a hefty amount of cash for big expenses. Just remember, this isn’t Monopoly money—spend wisely!

3. Home Equity Line of Credit (HELOC)

Imagine having a financial safety net that you can dip into whenever you need. A HELOC lets you borrow against your home’s equity up to a certain limit, much like a credit card. The best part? You only pay interest on what you borrow, not the whole shebang.

Why You’ll Love It:

Flexibility to borrow only what you need, when you need it. It’s like having a secret stash of cash for emergencies or spur-of-the-moment splurges.
Lower interest rates compared to personal loans or credit cards. Those home projects just got a little cheaper!

Why You Might Not:

Variable interest rates mean your payments can go up and down like a roller coaster. Hold on tight!
Your home is on the line. If you can’t repay, you risk foreclosure. Not exactly a pleasant thought.

Perfect For: Homeowners who want access to funds for ongoing expenses like home improvements or unexpected life events. It’s like having a rainy-day fund, but better.

4. Interest-Only Refinance

Looking for a way to lower your monthly payments temporarily? An interest-only refinance lets you pay just the interest on your mortgage for a set period. It’s a bit like taking a financial breather—giving you some extra cash flow when you need it most.

Why You’ll Love It:

Lower monthly payments during the interest-only period mean more money in your pocket for the fun stuff.
Great for managing finances during tough times or if your income is temporarily lower.

Why You Might Not:

You’re not reducing your loan’s principal, so you’re not making a dent in the overall balance.
Payments will jump once the interest-only period ends. Be prepared for that!

Perfect For: Homeowners who need temporary payment relief and expect their financial situation to improve in the future. Just don’t forget that the mortgage principal isn’t going anywhere!

5. Reverse Mortgage Refinance

For my seasoned homeowners aged 55 and up, this one’s for you. A reverse mortgage lets you convert your home’s equity into tax-free cash without selling or moving. It’s like turning your home into a pension plan!

Why You’ll Love It:

No monthly mortgage payments. You heard that right—you stay in your home and get paid.
Provides a steady income stream during retirement, making those golden years a little shinier.

Why You Might Not:

It reduces the equity in your home, which might affect how much you leave to your heirs. Sorry, kids!
Fees and interest can pile up over time, which can shrink your nest egg.

Perfect For: Senior homeowners looking to supplement their retirement income while staying put. It’s a great way to enjoy the fruits of your lifelong investment—your home.

6. Mortgage Switch Refinance

Feel like your current mortgage is more of a bad romance than a perfect match? Maybe it’s time for a mortgage switch. This option lets you switch to a new lender with better terms or lower interest rates. It’s like breaking up with your old mortgage for a better one. No hard feelings!

Why You’ll Love It:

You might snag a lower interest rate, reducing those monthly payments. More savings, less stress!
Some lenders offer cash incentives or cover the switching costs. Free money? Yes, please!

Why You Might Not:

There could be prepayment penalties for ditching your current lender. Always read the fine print.
You’ll need to qualify for the new mortgage, so make sure your credit and finances are in good shape.

Perfect For: Homeowners who aren’t happy with their current mortgage terms and want to shop around for a better deal. Think of it as trading up to a better mortgage relationship.

Things to Consider Before Refinancing

Before jumping into any refinancing options, homeowners keep these in mind:

Closing Costs: Just like moving, refinancing can come with costs—appraisals, legal fees, and sometimes penalties for breaking your current mortgage. Make sure the benefits outweigh these expenses.
Credit Score: A good credit score is your ticket to better rates. Check your score and clean up any issues before applying. Pay those bills on time, folks!
Financial Goals: Your refinancing choice should align with your long-term goals. Want lower payments now or to pay off your mortgage sooner? Choose wisely based on your life plans.

Conclusion on Refinance Options

With income challenges and home values being the leading factors to getting approved, any good news are welcomed. Especially if values are starting to stack up in your home Bank of Canada officials worry that rate cuts may overheat the housing market this means more equity for you to work with. Also, keep in mind that your income will affect your qualifications, in a previous post in break all that down. Check it out here Mortgage Debt Ratios: Basics of GDS & TDS

Refinancing your mortgage in 2024 can be a game-changer for your finances, and by utilizing some of these refinance options homeowners can get ahead. Whether you’re looking to lower your interest rate, access your home’s equity, or adjust your payment structure, there’s an option that’s right for you. Take the time to explore these refinance options and choose the one that best fits your needs and future goals.

Need help figuring out which refinance options suits you best? Reach out to me today, and we’ll find the perfect refinance solution for your situation. Let’s make 2024 the year of smart financial moves and a mortgage that works for you!

Get in touch with us today to get started.

7 Dec

Top 5 Most Affordable Housing Market in Ontario

First-Time Homebuyers

Posted by: Michael Greene

When it comes to affordable housing there is only one questin that comes to mind. Where in Ontario can you currently get the most bang for your buck?

As the Ontario real estate market bounces back from the coronavirus pandemic, many homebuyers may think they may have missed out on the brief opportunity at the height of the public health crisis. In March and April, many of the province’s housing markets experienced modest price declines, offering discounts on detached, semi-detached, townhomes and condominiums.

Prices and sales quickly increased again through the summer in what proved to be a delayed spring market. However, that does not mean all of Ontario’s housing markets are out of range for first-time buyers, families, and newcomers when immigration to Canada eventually resumes its typical pace. With a little bit of due diligence, you can find a region or a city in the province that can present you with the property of your dreams.

DETERMINING AN AFFORDABLE HOUSING MARKET

First, it is important to understand what determines an affordable market. Contrary to popular belief, it goes beyond the average home price. An affordable market takes into account the level of income necessary to afford the purchase of a house, as well as the current home price. For example, the median income in London,ON is approximately $54,000 and the average home price is a little more than $440,000. This makes London an affordable market.

Here are the top five most affordable Ontario real estate markets to consider in 2021.

North Bay, ON

Home Price: $286,114 (CREA NOBA July 2020, year-to-date average price)

Income Required: $39,893

For a long time, homebuyers have overlooked northern Ontario in favour of its southern urban counterparts. Unlike other rural areas, access to typical amenities is not as easy and development is more limited compared to the rest of the province. That said, real estate sales have been climbing in cities like North Bay, possibly because of greater infrastructure investment, improved land development, and lower taxation. With the combination of incredibly affordable homes and the increased flexibility of telecommuting employees, this trend is likely to continue through the rest of 2020.

Sudbury, ON

Home Price: $297,938 (CREA SUD June 2020, year-to-date average price)

Income Required: $33,749

When Sudbury witnessed an uptick in confirmed COVID-19 cases, officials were forced to implement strict safety measures for people buying and selling their homes. That did not stop real estate activity in the area as home sales have been on the rise – and for good reason. Sudbury is one of the province’s most affordable cities to live in in Ontario. As more people exit the big cities amid the work-from-home trend, cities such as Sudbury have a become a prime location for families looking to move, offering more space and an affordable cost of living.

Windsor, ON

Home Price: $383,521 (CREA WIND July 2020, year-to-date average price)

Income Required: $52,192

Windsor is one of Ontario’s best-kept secrets. You can purchase a large property for the average price of a one-bedroom apartment in Toronto, and many young couples are following the smell of savings! The Windsor housing market continued to sizzle even during the coronavirus pandemic, and now that the city has joined the rest of the province by officially moving into stage three or reopening, this boom is expected to intensify. CBC News writes:

“In addition to the lower housing prices… Windsor makes it an attractive city to buyers and investors because of its close proximity to Detroit, low traffic, relatively warm weather and views, the casino, and the imminent construction of the Windsor-mega-hospital.”

Niagara, ON

Home Price: $493,007 (CREA STCA June 2020, year-to-date average price)

The Niagara Home Builders’ Association (NHBA) said in Statistics Canada’s monthly survey of home builders that retirees and remote workers have amplified demand for new housing in the Niagara region, which elevated prices by one percent last month.

“As working from home becomes more prevalent, we may see an increase in the demand for larger living spaces that single-family homes can offer, causing a shift in demand from condominium apartments towards single houses,” the NHBA noted in the monthly survey.

Peterborough, ON

Home Price: $505,998 (CREA PETE July 2020, year-to-date average price)

Income Required: $69,072

Sales activity has been strong in Peterborough and the Kawartha Lakes in the aftermath of the peak COVID-19 period. In April, residential home sales plummeted 58.1 per cent, but they have rebounded as much as 34.5 per cent since. The contributing factor has been GTA buyers fleeing the region and seeking homes in smaller, quieter cities like Peterborough. The problem? Not enough supply, says Chiarina Payne, president of Peterborough and the Kawarthas Association of Realtors, in an interview with MyKawartha.com.

With interest rates at historic lows and demand expected to remain healthy, residential prices in the region are expected to rise by three per cent by the end of 2020.

CONCLUSION

Ontario’s slogan is “Yours to discover,” but the concept is more than just a garnish on our license plates. There is a lot of the province that most people have yet to see, and this is important if you are searching for a property to purchase. For Ontario real estate hunters, Toronto is an ideal location but the cost of a Toronto home is unaffordable for many. Exploring or expanding your home search to other parts of the province is more doable than ever before: public transit routes are expansive, remote work is more common, and a lot of cities in Ontario offer comparable amenities to what you would find in Toronto or Hamilton. Ready to make the great escape from big city life? Time to start discovering Ontario real estate!