christine-macpherson

How Global Conflict Could Push Canadian Mortgage Rates Higher in Alberta

Mon, 06 Apr 2026 19:24:20 GMT

When most people think about mortgage rates in Canada, they think about inflation here at home, jobs here at home, and Bank of Canada announcements. Those things absolutely matter. But global events matter too, and right now they matter a lot. On March 18, 2026, the Bank of Canada held its policy rate at 2.25 percent and made it clear that the war in the Middle East has increased volatility in energy prices and financial markets, while raising risks for the global economy. Global News also reported that policymakers are watching the conflict closely because higher oil, transportation and fertilizer costs could spill into inflation and affordability pressures for Canadians.

This matters if you are buying, refinancing, renewing, or simply trying to decide whether to lock in a rate. In my view, the real story is not just that Canada held rates steady. The bigger story is that global pressure can quickly change where mortgage rates go next, even when nothing dramatic has changed in your own neighbourhood.

Why a war far from Canada can affect your mortgage

Canada does not set mortgage rates in a bubble. The Bank of Canada said the conflict has driven sharp increases in global oil and natural gas prices, and that it could also disrupt the movement of other commodities, including fertilizer, through transportation bottlenecks linked to the Strait of Hormuz. Governor Tiff Macklem added that while Canada is not hit directly in the same way as some regions, reduced global supply still means higher global prices. That is the kind of pressure that can make inflation harder to control.

When inflation risks rise, central banks get cautious. That does not always mean an immediate rate hike, but it can mean fewer cuts, longer holds, or tougher language. That is exactly why this latest Bank of Canada announcement matters. The Bank held, but it also signaled that the outlook is more uncertain and that it is prepared to respond as conditions evolve.

What this means for variable mortgage rates

If you have a variable rate mortgage, the Bank of Canada is still the main thing to watch. Variable rates in Canada are closely tied to lender prime rates, and prime typically moves when the Bank changes its overnight rate. As of March 27, 2026, Canada’s prime rate is 4.45 percent, and Ratehub notes that variable mortgage rates have remained stable following last week’s rate hold.

So, for now, borrowers with variable rates have not seen a fresh jump just because of the war. But the risk has changed. If global conflict keeps energy prices elevated and inflation proves harder to cool, future cuts may be delayed. In plain English, this means some borrowers who were hoping for lower payments later this year may need to prepare for a longer period of higher borrowing costs than expected. That is not a certainty, but it is a reasonable takeaway from the Bank’s current tone.

Variable rate borrowers should focus on payment room

If you are in a variable rate mortgage right now, this is a good time to review your budget honestly. Ask yourself whether your payment still feels comfortable if rates stay where they are for longer. A lot of borrowers were planning around future relief. The new global backdrop is a reminder that relief can get delayed very quickly.

What this means for fixed mortgage rates

Fixed rates are a little different. They are not priced directly off the Bank of Canada’s overnight rate. TD explains that fixed mortgage rates are based on the bond market, with Government of Canada bond yields used as a benchmark. Ratehub now says the ongoing conflict in the Middle East and the shrinking likelihood of central bank cuts are pushing bond yields higher, and that fixed mortgage rates increased significantly this week.

That distinction is important. Even if the Bank of Canada does nothing at its next meeting, fixed rates can still move. If investors keep pricing in higher inflation risk, lenders can raise fixed mortgage pricing before the Bank ever changes its policy rate. For buyers and renewing homeowners in Edmonton, that means waiting can carry a real cost.

What buyers and homeowners in Edmonton should do now

I think this is a planning market, not a panic market. The latest data does not say every borrower should rush into the same product. It does say that global events are now part of the mortgage conversation again, and ignoring them is a mistake.

If you are buying, get pre approved and secure a rate hold while you shop. Ratehub notes that current pricing can often be held for up to 120 days, which can be valuable in a market where fixed rates are moving. If you are renewing, compare your options early instead of waiting for the lender’s first offer. If you are refinancing, think beyond rate alone and look at cash flow, penalty costs, and how much payment certainty matters to you right now.

The bottom line

The Bank of Canada did not raise rates in March. But the global pressure behind mortgage rates is clearly building. War driven energy shocks can feed inflation. Inflation pressure can keep central banks cautious. Cautious central banks and rising bond yields can keep mortgage costs higher for longer. That is the chain Canadians need to understand right now.

If you want to talk through your options in Edmonton, I am happy to help you compare fixed and variable strategies based on your timeline, budget, and risk comfort.

Call 403-968-2784 or email christine@flaremortgagegroup.com to start the conversation.

Best Mortgage Strategies for 2026 in Edmonton and area.

Mon, 23 Feb 2026 19:12:44 GMT

The biggest question I am getting right now from buyers in Edmonton and area is simple. Should I lock in my rate or go variable in 2026?

With rate changes over the past two years and renewed speculation about what the Bank of Canada will do next, choosing between fixed and variable is no longer a simple decision. The right strategy depends on your goals, risk tolerance, and timeline.

Let me break it down clearly so you can decide what makes sense for you.

Where Mortgage Rates Stand in 2026

After a volatile cycle of increases followed by gradual easing, 2026 has introduced more stability into the mortgage market. Fixed rates have adjusted downward from peak levels, while variable rates have started to look competitive again as expectations grow around future Bank of Canada rate cuts.

Here is the key difference:

Fixed rate mortgage: Your interest rate stays the same for your full term. Your payments stay predictable.
Variable rate mortgage: Your rate moves with the prime rate. Payments or interest portion may change depending on your lender structure.

Buyers in Edmonton are asking whether stability is worth paying slightly more today, or if flexibility and potential savings are worth some short term uncertainty.

When Locking In Makes Sense in 2026

There are situations where a fixed rate mortgage is the smarter move.

You Want Payment Stability

If you are buying your first home or stretching your budget, stability matters. A fixed rate protects you from surprises and allows you to plan with confidence.

You Believe Rates Could Rise Again

While forecasts suggest moderate easing, inflation and global economic uncertainty still exist. If rates rise unexpectedly, fixed rate borrowers are protected.

You Prefer Peace of Mind

Some buyers simply sleep better knowing their payment will not change. There is real value in that.

For families purchasing in Edmonton, especially those managing childcare costs or other major expenses, predictability often outweighs potential savings.

When Variable Could Be the Better Strategy

Variable rates are making a comeback in 2026. Here is why they are worth considering.

You Expect Further Rate Cuts

If the Bank of Canada continues to reduce rates later this year, variable mortgage holders benefit immediately.

You Plan to Sell or Refinance

Variable mortgages often have lower penalties if you break your term early. If you plan to move, refinance, or restructure in a few years, this flexibility can save thousands.

You Have Financial Cushion

If your budget allows room for payment fluctuations, variable can be a strategic way to reduce long term interest costs.

Historically, variable rates have often outperformed fixed over the full term. The key is whether you are comfortable riding out short term volatility.

Comparing Fixed and Variable in 2026

Here is a simplified comparison to help buyers in Edmonton understand the trade offs.

Fixed Rate

Payment Stability: High
Rate Movement: None during term
Penalty to Break: Higher
Best For: Risk averse buyers
Potential Savings: Stable but limited

Variable Rate

Payment Stability: Moderate
Rate Movement: Moves with prime
Penalty to Break: Often lower
Best For: Flexible buyers
Potential Savings: Greater if rates fall

A Smart Strategy for Today's Buyers

There is no universal answer. The best mortgage strategy in 2026 depends on three things.

Your financial comfort level
Your timeline in the property
Your long term plans

Some buyers are even choosing shorter fixed terms, such as three years, to balance stability and flexibility. Others are exploring adjustable variable options with capped payments.

As your mortgage professional in Edmonton, my role is to walk you through real numbers, not headlines. We run payment scenarios under different rate environments so you can see exactly what risk and reward look like.

What First Time Buyers Should Consider

If you are entering the market for the first time, qualifying is already stressful. In many cases, locking in can simplify your transition into homeownership.

If you are upgrading and have equity, you may have more room to take a calculated risk with variable.

Every Buyer's Situation is Unique

Rates are no longer at emergency lows, but they are also not at peak highs. That creates opportunity.

The question is not whether fixed or variable is better in general. The question is which one fits your life right now.

If you are buying in Alberta, let's build a strategy that protects your budget and positions you for long term success.

Call 403-968-2784 or email christine@flaremortgagegroup.com to review your options.

I would be happy to walk you through the numbers and help you make a confident decision.

How Global Politics and Tariffs Are Quietly Shaping Canadian Real Estate

Mon, 15 Dec 2025 17:22:11 GMT

Why International Tensions Could Shift Real Estate Opportunities at Home

What U.S. Tariffs and Global Trade Policies Have to Do with Your Mortgage

Canada’s housing market is no stranger to global influence. But 2025 has introduced a new layer of complexity: rising trade tensions between the U.S. and several countries, including Canada, paired with shifting policies around international real estate investment.

Earlier this fall, the U.S. reintroduced tariffs on select Canadian goods, prompting immediate reactions from Canadian trade officials. But the bigger story? Canadian investors are retreating from U.S. real estate, and international buyers are beginning to eye Canadian properties again.

This shift has ripple effects—from home prices to mortgage opportunities—especially in larger cities like Toronto and Vancouver, and increasingly in second-tier markets across the country.

What This Means for Buyers and Sellers in Canada

Real estate doesn’t operate in a bubble. When Canadian investors sell off U.S. property, they often reallocate funds into local markets—sometimes to buy primary homes, other times for rentals. At the same time, with the U.S. market becoming more volatile, international buyers are looking north for stability.

This adds upward pressure in certain Canadian markets, which might otherwise be softening due to higher mortgage rates.

Here’s what that could mean for you:

If you’re buying: Act sooner than later. Some markets may see renewed competition from foreign investors.
If you’re selling: Expect an increase in qualified, cash-ready buyers—both local and international.
If you’re investing: It may be a good time to explore underpriced markets poised for growth (smaller cities or university towns).

Is Canada a Safe Haven for Property Investment?

In many ways, yes. Despite affordability issues, Canada remains politically stable, has strong banking regulations, and offers a secure environment for capital.

According to recent reports, investors from Asia, Europe, and even the U.S. are revisiting Canadian property as a hedge against uncertainty in their own countries. And with the potential for rate cuts in the next 6–12 months, their buying power may only increase.

How Mortgage Brokers Can Help You Navigate This Trend

This is where having a broker becomes essential. A mortgage professional doesn’t just shop rates—they help you understand the landscape.

Whether you’re:

Trying to time your next move
Considering converting your primary home into a rental
Evaluating a second property for family or investment
Exploring how global trends affect mortgage product availability

…a broker can help position you for success.

Let’s Talk About Your Strategy in Today’s Global Market

Global headlines may seem far removed from your mortgage renewal or house hunt, but they’re more connected than ever. Whether it’s trade tensions, foreign investment shifts, or regional affordability trends, the world’s economic changes shape local opportunities.

If you’re looking to make a smart real estate move, now’s a great time to talk strategy.

�� Call: 403-968-2784
�� christine@flaremortgagegroup.com

Let’s make sure your mortgage plan is ready for whatever the world brings next.

Why Home Equity Is Your Secret Weapon, Even Before You Sell

Tue, 28 Oct 2025 16:20:03 GMT

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Why a Cooling Market Could Be the Best Time to Buy a Home in Canada

Wed, 15 Oct 2025 19:33:27 GMT

Why a Cooling Market Could Be the Best Time to Buy a Home in Canada

When I met with a couple recently, they told me they were sitting on the sidelines waiting for “the right time” to buy. They had assumed they missed their chance when prices surged a few years ago. The truth? The window isn’t closed. In fact, with today’s shifting market, new opportunities are opening up for buyers.

Across Canada, the housing market is entering a cooler, more balanced phase. That’s not bad news — it can actually be a good thing for anyone looking to purchase a home.

The Canadian housing market is adjusting

Over the last few years, Canadians have seen some of the fastest price growth in history. Now, that growth is slowing down. National forecasts are predicting a slight decline in average home prices this year — around 2% in many regions.

What does that mean for you? In many cities, buyers are regaining negotiating power. Homes are staying on the market longer, price reductions are becoming more common, and sellers are more open to offering incentives like covering closing costs or offering flexible possession dates.

This shift isn’t a “crash.” It’s a reset — and it creates room for thoughtful buyers to step in.

Opportunities for buyers in a cooling market

More negotiating power
In competitive years, buyers often had to bid above asking. Today, you’re more likely to secure a home at or even below list price.
Wider selection
With homes staying on the market longer, you don’t have to rush decisions. You can compare more properties and find the one that truly fits your needs.
Flexibility from sellers
Whether it’s getting repairs done before closing, asking for certain upgrades, or choosing your move-in date, sellers are more open to working with buyers.
Long-term value potential
Cooler conditions now can set the stage for steady, sustainable growth in the future — a healthier investment environment.

A story of timing and patience

Take for example a young buyer who sold their condo in a busy urban market earlier this year. Instead of waiting indefinitely for the “perfect time,” they used today’s balanced market to make a move. With fewer bidding wars, they negotiated a purchase at 5% below asking. The home needed minor updates, but the savings left them with enough room in their budget to handle those upgrades without stress.

That’s what a balanced market makes possible — opportunities that don’t exist when competition is at its peak.

Tips for buyers right now

Here are actionable strategies in this cooling environment:

Get pre-approved early : Sellers value certainty. Being pre-approved can make your offer stronger, even in a slower market.
Look beyond the headline numbers : A national average doesn’t always reflect what’s happening in your city. Work with a broker who knows your local market.
Target homes with longer listing times : Properties that have been on the market for weeks or months are often more negotiable.
Think about your timeline : If you plan to hold a property for five to ten years, short-term price fluctuations matter less.
Negotiate more than just price : Ask about upgrades, appliances, closing credits, or flexible terms.

The bottom line

Canada’s market is shifting. Instead of seeing this as a setback, think of it as a chance to buy in a calmer, more balanced environment. If you’ve been waiting, this could be your opportunity to secure the right home without the pressure of a bidding war.

If you’d like help reviewing your options, running the numbers, and finding opportunities in your local market, I’d be happy to walk you through it.

Parents Can't help with Down Payment

Wed, 27 Aug 2025 03:59:57 GMT

Parents Can’t Gift You a Down Payment? Here’s Another Option

When most people think of getting help from family for a down payment, they picture a non-repayable gift from parents. While that’s ideal for some, it’s simply not possible for every family. Maybe your parents still need those funds for retirement, or they can’t afford to part with a large sum permanently. That doesn’t mean you’re out of options.

In Canada, you can receive your down payment as a loan from immediate family —not just a gift. This is a perfectly legal and lender-acceptable option, as long as it’s properly documented in a contract . The agreement can set the loan at zero percent interest or at a rate both parties agree on. It’s flexible, and it could help you enter the housing market sooner.

The Benefits of a Family Loan for Your Down Payment

A family loan can help you:

Buy with minimum down instead of waiting years to save
Get to 20% down to skip default insurance premiums
Avoid higher borrowing costs from private or alternative lenders
Secure funds with terms that work for both you and your parents

Sometimes that extra push from a loan can mean the difference between qualifying now or having to wait while home prices rise.

How Lenders View a Family Loan

Lenders will see this loan just like any other debt. That means the repayment amount, interest rate, and payment schedule will be factored into your debt service ratios when they determine how much mortgage you qualify for.

The loan agreement must be written, signed, and legally binding , not just a handshake deal. Lenders will typically request a copy, along with proof of the funds being transferred to you. This ensures everything is transparent and above board.

Setting Up the Loan Agreement

Here’s what to include in a simple, effective loan contract between you and your parents:

Principal amount (how much they’re lending you)
Interest rate (can be 0% or agreed-upon)
Repayment schedule (monthly, annually, lump sum, or at sale of the home)
Term length (how long until the loan must be repaid)
Signatures of all parties involved

It’s always best to have a lawyer review the agreement. This protects both you and your parents and ensures it meets lender requirements.

Example Scenario

Let’s say you’ve saved $40,000, but you need $70,000 to make a 20% down payment and avoid default insurance. Your parents could lend you the extra $30,000, documented in a contract stating you’ll repay them over 10 years at zero percent interest. Your lender would include the calculated monthly payment in your debt servicing, and if you qualify, you could buy your home now instead of saving for years.

Making It a Win-Win for Everyone

A family loan is a smart way to keep your parents’ funds intact while still helping you secure a property. They retain access to their capital in the future, and you get the advantage of buying now while market conditions work in your favour.

When I work with clients in these situations, I always encourage a family meeting so everyone feels informed and confident. It’s not just about qualifying for a mortgage—it’s about making sure the arrangement works for everyone’s financial goals.

Final Thoughts

If your parents can’t gift you a down payment, a family loan could be the perfect middle ground. It keeps their retirement secure, helps you avoid costly insurance premiums, and gets you into the market faster. The key is making sure it’s done right—with clear terms, proper legal documentation, and lender approval.

If you’d like to explore how this could work for you, I’m happy to help run the numbers, review scenarios, and meet with your family to make sure everyone’s on the same page.

Contact me today at 403-968-2784 or christine@flaremortgagegroup.com to learn more about using a family loan for your down payment and start your homebuying journey now.

Is Your Mortgage Pre-Approval Actually Useless? Here’s Why It Might Be

Fri, 01 Aug 2025 22:48:26 GMT

A Rate Hold Isn’t a Guarantee—And That Could Cost You the Home

Getting pre-approved for a mortgage should feel like progress. It’s exciting, empowering, and often the first concrete step toward buying a home. But here’s the hard truth: if your mortgage pre-approval wasn’t put together properly—or if your broker or banker skipped key steps—it could be virtually worthless when you need it most.

Let’s break down what a pre-approval really means, what a rate hold does (and doesn’t) do, and why experience matters more than ever in a fast-paced, competitive real estate market.

What Is a Mortgage Pre-Approval Really ?

A mortgage pre-approval generally includes two things:

A conditional approval based on the numbers provided by your broker or banker.
A rate hold that locks in an interest rate (typically for 90–120 days), giving you time to shop with peace of mind.

But here’s the issue: most lenders don’t actually do a full review of your application until it becomes “live”—that is, until you’ve written an offer that’s been accepted. Before that, they’re mostly relying on the information submitted by your broker or banker , not what they’ve verified themselves.

The Danger of a Sloppy Pre-Approval

Because lenders are only reviewing estimated numbers initially, a pre-approval is always conditional . If anything doesn’t add up when they finally double-check it, you could lose your approval—and possibly your home.

Here are some common issues that can derail things during a live file review:

Your income was calculated incorrectly (especially for variable or self-employed income)
There’s undisclosed debt (like student loans, car leases, or co-signed obligations)
Your down payment source wasn’t verified properly
Something as simple as a missed document throws off the whole deal

This is why it’s so critical to work with an experienced broker who knows how to present your file correctly the first time.

⚠️ Pro tip: If your broker or banker didn’t ask for full income documents, verify your credit, and analyze your debt load, you don’t have a real pre-approval—you have a placeholder.

Rate Holds: What They Do and What They Don’t

Rate holds are helpful, no question. They give you a buffer against rising rates while you search for the right property. But even if you’re holding a great rate, that doesn’t guarantee your mortgage will go through when it counts.

Lenders only commit to financing once they’ve verified everything. And even then, there’s another major piece of the puzzle...

Your House Has to Qualify, Too

This surprises a lot of buyers: just because you are approved, doesn’t mean the home is. Lenders always assess the property you’re buying, because they’re investing in it with you. If something about the home makes them uncomfortable—like:

A poor inspection
A property in a high-risk location
Structural or zoning issues
A condo building with known financial concerns

...they can walk away. This doesn’t mean your homeownership journey is over—but it does mean you need someone in your corner who can help pivot to another lender or solution quickly.

Why Experience Matters More Than Ever

A pre-approval is only as good as the person behind it. An experienced mortgage broker will:

Fully underwrite your file upfront
Spot issues before the lender does
Explain what could cause problems down the line
Prepare you for the reality of lender and property review

This extra care can be the difference between closing confidently and scrambling under pressure.

Final Thoughts: Ask the Right Questions Before You Rely on That Pre-Approval

Before you start house hunting, ask your mortgage expert:

Was my income fully reviewed and verified?
Did you check my credit?
Have you reviewed all debts and liabilities?
Is my file ready to go live ?

If the answers are vague or rushed, it might be time for a second opinion.

No-Payment Mortgage Options: Are They Right for You?

Fri, 11 Apr 2025 21:00:35 GMT

When people hear “no-payment mortgage,” they often assume it’s too good to be true or that it comes with hidden risks. But in Canada, these options are designed to be conservative and sustainable, giving homeowners more financial flexibility without putting them in a bad financial position.

There are three main types of no-payment mortgage options:

Reverse Mortgages – Available to homeowners 55+ with significant home equity.
Alternative Lenders – Offer similar options regardless of age but require strong equity.
Private Lenders – Short-term solutions for homeowners who need temporary relief.

Let’s break them down and see if one might be a good fit for you.

Reverse Mortgages: Not as Risky as You Think

Reverse mortgages tend to get a bad reputation, mostly because of how they were handled in the U.S. years ago. But in Canada, lenders are far more conservative. The biggest difference? Canadian reverse mortgages never allow you to owe more than your home is worth .

How Do They Work?

You must be 55 or older to qualify.
You can borrow a portion of your home’s value , usually up to 55% .
The older you are, the more you can borrow —since the lender calculates how long you’re likely to stay in the home.
You don’t make monthly payments —instead, the interest gets added to your loan balance over time.
When you sell or move, the loan is repaid from your home’s value.

Why Can’t You Owe More Than Your Home’s Value?

Most lenders offer a no-negative equity guarantee , meaning even if home prices drop, your estate will never owe more than your house is worth. But realistically, Canadian home values have remained stable or increased over time , making it unlikely you’d ever reach that point.

Who Is a Reverse Mortgage Good For?

Reverse mortgages aren’t for everyone, but they can be a great option if you :
✔️ Need extra cash for home renovations, medical expenses, or travel.
✔️ Want to supplement retirement income without selling your home.
✔️ Prefer to stay in your home long-term rather than downsizing.

When Might It Not Be the Best Fit?

If you qualify for a traditional mortgage or a home equity line of credit (HELOC) , those options may be more affordable than a reverse mortgage since they typically come with lower interest rates and fewer long-term costs .

Reverse mortgages are best suited for homeowners who can’t qualify for traditional financing —whether due to income, age, or credit restrictions. If you have strong income and credit, a HELOC or mortgage refinance could be a cheaper way to access your home equity.

That said, if you don’t qualify for traditional financing but still want to stay in your home without monthly payments, a reverse mortgage could be a good fit.

Alternative Lenders: No-Payment Options at Any Age

Not 55 yet? Some alternative lenders offer no-payment mortgages to homeowners with at least 55% equity in their property. These work similarly to reverse mortgages, but with some key differences:

Age doesn’t matter —lenders care more about the property’s location and your ability to cover ongoing costs like property taxes.
You need strong equity —usually at least 55% or more of your home’s value.
The interest still adds up —just like a reverse mortgage, the loan balance grows over time.

These can be helpful if you need a financial break, want to invest in a business , or have a short-term gap in income .

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Private Lenders: A Short-Term No-Payment Option

Some private lenders offer no-payment options, too—but these are usually short-term solutions (6 months to 2 years). They’re best for homeowners who:

✔️ Are in the process of selling their home and need temporary financial relief.
✔️ Need quick cash for a project or emergency but expect to pay it off soon.
✔️ Have strong home equity but don’t qualify for traditional financing.

Because these loans are shorter-term, interest rates are often higher than reverse mortgages or alternative lender options.

Is a No-Payment Mortgage Right for You?

No-payment mortgages aren’t a “one-size-fits-all” solution, but they can be a great tool for the right situation. Whether you need financial flexibility, extra cash flow, or a break from monthly payments , I can walk you through the options and lay them out side by side so you can make an informed decision.

If you’d like to explore your options, let’s chat! You can reach me at 403-968-2784 or christine @ flaremortgagegroup.com to see what might work best for your situation.

Should I renew or refinance my mortgage_

Mon, 31 Mar 2025 16:50:58 GMT

Should I renew or refinance my mortgage?

Millions of Canadians are reaching the end of their mortgage term, eager to secure the best possible rate. While many focus on renewing their existing mortgage, they may overlook the possibility of refinancing—a decision that could make a big difference in their financial picture.

What’s the Difference Between Renewal and Refinance?

Renewal:
At the end of your mortgage term (commonly 5 years), you need to “renew” your loan to keep it active. When you renew, your mortgage balance and amortization period (the total time you have to pay it off) stay the same. You can renegotiate your interest rate, but you can’t borrow additional funds or change the original loan amount.

Example. You bought a home in June 2020 and had a mortgage of $400,000. After a 5-year term at 1.70%, your outstanding mortgage balance will be around $332,939.71, assuming you haven’t made any extra payments. At this point, you’ll need to renegotiate a new interest rate and choose a new term based on your remaining balance.
Refinance:
Refinancing allows you to restructure your mortgage. You can change the loan amount, extend the amortization period, and often access your home’s equity. This flexibility gives you the option to lower monthly payments, consolidate debt, or free up cash for other purposes like renovations or investing.

Example: Say your home’s value has grown significantly since you first purchased it. Through refinancing, you could borrow more against that increased equity, giving you funds to complete a kitchen renovation, start a small business, or pay off higher-interest debts.

The Impact of Rising Rates

If you locked in a 1.70% fixed rate five years ago, today’s rates—often over 4.50%—may feel like a big leap. Simply renewing might leave you with a payment shock. Refinancing, however, gives you the ability to adjust your monthly obligations, even as rates rise, by stretching out your amortization or accessing equity for financial goals.

A Side-by-Side Comparison (Markdown Table)

Below is a comparison of a $400,000 mortgage at a 1.70% interest rate (renewal scenario) versus refinancing to a longer amortization period with a higher rate:

*Rates are for illustrative purposes only. This is not a commitment to lend, pre-approval or approval. OAC, E&O.

Note: The monthly payment in the refinance scenario is higher due to the higher rate, but stretching out the amortization period can still offer savings compared to shorter-term loans.

Simplifying the Terminology

Amortization Period:
This refers to the total length of time you have to fully pay off your mortgage. For example, a 25-year amortization means your mortgage is structured to be paid in full over 25 years. Choosing a shorter amortization period typically results in higher monthly payments, but you’ll pay less interest overall. A longer amortization period, such as 30 years, reduces your monthly payment but increases the total interest paid over the life of the loan.
Term:
The term is the length of your current mortgage agreement with the lender—commonly 1 to 5 years in Canada. At the end of this term, you need to renew or refinance your mortgage for another term at current interest rates and conditions. While the amortization period stays the same, the term allows for adjustments to the rate and sometimes the type of mortgage you have.
Equity:
Equity is the portion of your home that you truly own, calculated by subtracting the outstanding mortgage balance from your home’s current market value. For example, if your home is worth $600,000 and you owe $400,000 on your mortgage, you have $200,000 in equity. Refinancing can enable you to tap into this equity for expenses like home renovations, debt consolidation, or investment opportunities.
Payment Shock:
This occurs when your mortgage term ends and you’re faced with significantly higher interest rates. The resulting increase in your monthly payment can come as an unpleasant surprise and impact your budget.

In Summary

When faced with renewal, don’t just look at the rate. Consider your overall financial goals. Do you need to borrow additional funds? Are you trying to reduce monthly payments? A refinance may give you more flexibility and options than simply renewing. By understanding the differences and terminology, you can make a well-informed decision that best fits your long-term financial plan.

If you’re unsure which option is right for you, let’s connect. I can help you understand your choices, find the best rates, and create a mortgage strategy tailored to your needs. Reach out today to explore what’s possible!

You Missed the Best Time to Buy—Now What?

Tue, 04 Mar 2025 02:02:20 GMT

Let’s be real—2020 was a great time to buy a home. Prices were lower, and mortgage rates were sitting at 2.84% . But if you didn’t buy then, you’re not alone. Many people hesitated, waiting for the “perfect” time to enter the market.

Now, home prices are higher, rates have fluctuated, and some buyers are still waiting. But here’s the truth: there is no perfect time to buy—only the right time for you.

Barbara Corcoran [ @barbaracorcoran ] puts it:

"The perfect time to buy a house? When you can afford the down payment—not when you’re waiting for the ‘perfect’ market."

The Market Has Moved—And It’s Not Waiting for You

Here’s how Canadian home prices have changed over the years:

Prices skyrocketed from 2020 to 2022 , driven by record-low interest rates.

The market dipped in 2023, but it’s already rebounding.
CREA forecasts home prices will rise another 3.3% in 2026 to $746,379.

Barbara Corcoran [ @barbaracorcoran ] and other real estate experts agree: waiting often costs buyers more in the long run.

Interest Rates Fluctuate—Home Prices Keep Rising

If you’re holding off because of interest rates, here’s what you should know:

Rates are already lower than their peak. After hitting 5.94% in late 2023 , they’ve dropped to around 4.5% today (depending on the lender and mortgage type).
When rates drop, prices rise. More buyers enter the market, increasing demand and pushing home values higher.
Historically, home prices always increase over time. Even after temporary dips, the long-term trend is up .

The key takeaway? You don’t wait to buy real estate—you buy real estate and wait.

Play the Long Game—Not the Waiting Game

Barbara has seen it all, and she knows that getting into the market when you can afford it is more important than waiting for the “perfect” time. Here’s why:

Equity Growth – The longer you own, the more your home appreciates and builds your wealth.
Market Stability – Short-term dips happen, but history shows that prices always recover.
Wealth Creation – Real estate remains one of the best long-term investments for financial security.

If you’re still waiting, ask yourself: Will homes be cheaper five years from now? The data says no.

�� Call me at 403-968-2784

�� Email christine@flaremortgagegroup.com

Let’s talk about getting you into the market—before prices rise even more.

Are Mortgage Rates Going to Drop in 2025? How U.S. Tariffs Could Impact You

Mon, 10 Feb 2025 20:39:06 GMT

Is the Economy Going to Crash? What Canadian Homebuyers Need to Know

With new U.S. tariffs on Canadian goods already in place —and Canada retaliating with its own tariffs—many Canadians are asking:

"Are mortgage rates going to go down in 2025?"
"Is the economy going to crash?"
"How will these tariffs impact home prices and affordability?"

These are valid concerns, especially for homebuyers, homeowners renewing their mortgages, and those considering refinancing. While we can’t predict the future with certainty, the Bank of Canada (BoC) is widely expected to cut interest rates in 2025 to help offset economic uncertainty. However, rising inflation and shifting trade policies could complicate how quickly and how much rates actually drop.

Here’s what you need to know about how these tariffs could affect Canada’s economy, mortgage rates, and home affordability in the coming months.

Will Mortgage Rates Go Down in 2025?

The Bank of Canada has been signaling rate cuts for months, but how low they go—and how quickly—depends on several factors:

Tariffs are slowing economic growth – The new U.S. tariffs on Canadian goods, and Canada's retaliatory tariffs on U.S. imports, are putting pressure on businesses and increasing costs for consumers. If economic growth slows significantly, the BoC may lower rates to keep borrowing and spending active.
Inflation is still a concern – Higher tariffs often lead to higher prices for goods, which could drive up inflation. The BoC has to balance rate cuts with the risk of rising inflation, which could slow the pace of cuts.
Global uncertainty adds risk – The U.S. election, ongoing geopolitical tensions, and financial market fluctuations all add unpredictability. If the economy worsens, rate cuts may come sooner and deeper than expected.

What Does This Mean for You?

Rates are expected to decrease , but we’re in uncertain times. If you're thinking about buying a home, refinancing, or renewing your mortgage, the best approach is to lock in now with flexibility to adjust later .

Should You Lock in a Mortgage Rate Now or Wait?

Many homebuyers and homeowners are wondering whether they should lock in a mortgage rate now or wait for rates to drop further in 2025. The good news? Most lenders allow you to lower your rate if rates drop before closing.

Here’s why locking in now is a smart move:

Locking in protects you from unexpected rate hikes – While rates are projected to drop, inflation or unexpected economic shocks could slow cuts or even cause rates to rise. Locking in now ensures you’re covered.
Many lenders allow a rate drop before closing – If rates go lower before your mortgage is finalized, most lenders will adjust your rate accordingly. This gives you peace of mind knowing you're getting the best possible deal.
Economic uncertainty makes waiting risky – Tariffs, inflation, and global trade tensions all create uncertainty. Locking in now ensures you don’t miss out on today's competitive rates while still giving you room to adjust.

Fixed vs. Variable: Which Mortgage Should You Choose?

If you're debating between a fixed or variable mortgage, here’s what to consider:

Mortgage Type

Best For

Considerations

Fixed-Rate Mortgage

Homeowners who want predictability

Offers stability, but you might miss out on savings if rates drop significantly.

Variable-Rate Mortgage

Borrowers who are comfortable with fluctuating payments

Can save you money if rates decrease, but payments could rise if inflation pressures slow rate cuts.

If you’re unsure which option is best for you, let’s discuss your financial goals and find the right strategy.

Is the Economy Going to Crash? What This Means for Canadian Homebuyers

While Canada’s economy is facing major uncertainty , most experts do not expect a full-blown crash. Instead, we’re likely to see:

Slower economic growth due to rising costs from tariffs and inflationary pressures.
Lower interest rates as the BoC tries to stimulate economic activity.
A cooling housing market in some regions, as affordability challenges affect demand.

The best thing you can do right now is stay informed and make proactive mortgage decisions that protect your financial future.

Let’s Talk About Your Mortgage Options

Navigating the mortgage market in uncertain times can be confusing, but you don’t have to do it alone. Whether you’re looking to buy a home, renew your mortgage, or refinance for a better rate , I can help.

�� Call me at 403-968-2784 or email christine@flaremortgagegroup.com ,and let’s create a mortgage strategy that fits your needs.

Capital Gains Tax Rules: Are They Changing?

Thu, 30 Jan 2025 22:59:10 GMT

With all the uncertainty surrounding Canada’s proposed capital gains tax changes, many property owners are asking, "Do I have to pay capital gains if I sell my house?" or "Should I sell my investment property before the tax rules change?"

In June 2024 , the federal government proposed increasing the capital gains inclusion rate —the portion of capital gains that is taxable. This change could significantly impact investors and property owners selling secondary residences, rental properties, or cottages.

But here’s the challenge: the rules haven’t been finalized yet. As Jamie Golombek explains in a recent Financial Post article, “ Uncertainty remains as to what the final capital gains tax rules will look like, or even if they will be implemented at all. ”

Despite this uncertainty, the Canada Revenue Agency (CRA) has announced it will proceed with collecting taxes based on the proposed higher inclusion rate until a final decision is made. This means that even if you sell now, you could still face a larger tax bill. If the rules are later changed or rejected, the CRA may adjust tax filings—but in the meantime, selling could cost you more than you expect.

The good news? Selling isn’t your only option. If you need access to cash or want to better manage your finances, refinancing or exploring alternative lending solutions could provide the flexibility you need—without triggering a large tax bill.

Ways to Access Cash Without Immediately Selling

If you need funds but aren’t sure whether selling is the best choice, here are some flexible ways to access cash while holding onto your property:

1. Refinancing Your Mortgage

Access tax-free cash by using your home equity.
Adjust your mortgage terms to fit your financial needs.
Keep your property and continue building long-term wealth.

2. Alternative and Private Lenders

Flexible lending options with easier qualification.
Quick access to funds without selling your property.
Short-term solutions to manage cash flow.

3. Reverse Mortgage (For Canadians 55+)

Access tax-free equity with no monthly payments.
Stay in your home while improving cash flow.
Ideal for retirees on fixed incomes.

4. No-Payment Loan Options

Interest-only or deferred payment loans.
Manage expenses without immediate financial pressure.
A flexible option to bridge financial gaps.

Comparing Your Options: Sell or Keep Your Property?

It’s important to weigh the pros and cons before making a decision.

Here’s a simple comparison of selling versus other financing strategies:

Let’s Build a Strategy That Fits Your Goals

Whether refinancing, working with private lenders, or considering a reverse mortgage, understanding every option is essential. I work closely with your accountant to create a strategy that helps you minimize taxes and achieve both your short- and long-term financial goals.

I offer a clear, side-by-side comparison of all your financing options so you can make the best decision for your financial future.

�� Call me at 403-968-2784
�� Email me at christine@flaremortgagegroup.com

Know someone else who’s unsure about what to do? Share this post—many Canadians don’t realize they have options beyond selling.

Let’s talk about what works best for you .

Your Resolution May Fail by February… Here’s Why

Thu, 02 Jan 2025 19:33:07 GMT

The start of a new year inspires us to set ambitious goals, from getting fit to saving more money. But did you know that most people abandon their resolutions just 36 days into the year ? That’s right—by early February, many of us have already fallen back into old habits.

When it comes to major financial goals like homeownership, buying a rental property, or planning your housing for retirement, it’s even easier to get derailed. The process can feel overwhelming, especially if you’re going it alone.

But here’s the good news: working with a team of experts, like myself, can help you stay on track and achieve those dreams. Let’s break down why 2025 is the perfect year to act, how to buy a rental property, and the common mistakes to avoid along the way.

Why 2025 is a Great Year to Take Action

This year is shaping up to be a golden opportunity in the real estate market. Experts predict:

Interest rates will drop : After a few years of rising rates, relief is on the horizon. Lower rates mean more affordable mortgages.
Home prices are expected to rise : As demand increases, waiting too long could mean paying more for the same property.

The key to benefiting from these trends is planning early . Whether you’re buying your first home, expanding your real estate portfolio, or downsizing for retirement, preparation is everything.

How to Buy a Rental Property

Investing in rental properties is a fantastic way to build wealth, but the process can seem daunting. Here’s a simplified breakdown:

Research the Market
Identify areas with strong rental demand and potential for growth. Consider factors like job markets, population growth, and rental vacancy rates.
Get Pre-Approved
Securing financing for an investment property often requires a larger down payment and a solid credit score. Pre-approval helps clarify your budget.
Calculate ROI
Use tools to estimate rental income, property expenses, and potential appreciation to ensure the investment is worth your time and money.
Choose the Right Property
Look for properties that are move-in ready or need minor renovations to increase their value.

Close and Prepare for Tenants
Work with property managers or handle tenant applications yourself to start generating income.

Common Pitfalls to Avoid

Many people make avoidable mistakes that slow down or derail their real estate goals. Here are a few to watch out for:

1. Waiting Too Long to Start

The perfect time to act rarely exists. Delaying your plans could mean missing out on favorable interest rates or rising property values.

2. Skipping Pre-Approval

Shopping for homes without knowing your budget can lead to frustration or missed opportunities. Pre-approval provides clarity and confidence.

3. Underestimating Costs

From closing costs to unexpected repairs, real estate involves more than just the purchase price. Plan for these expenses upfront.

4. Going It Alone

Trying to navigate the financing and buying process without expert guidance often results in unnecessary stress or costly errors. A mortgage expert like me can streamline the process.

Why the Path Isn’t Always a Straight Line

Life happens, and real estate goals don’t always follow a linear timeline. Perhaps you need to save more for a down payment, or the perfect property doesn’t show up right away. That’s okay!

The important thing is to stay consistent and seek support when you need it. As your mortgage expert, I’m here to keep you motivated, adjust plans as needed, and remind you that progress is progress, no matter how small.

Make 2025 the Year You Take Control

Don’t let the ups and downs of life discourage you from achieving your real estate dreams. With rates set to drop and the market poised for growth, there’s never been a better time to plan your next move.

Whether you’re buying your first home, adding an investment property to your portfolio, or figuring out your housing plans for retirement, I’m here to help.

Let’s create a plan together. Reach out at 403-968-2784 or christine@flaremortgagegroup.com to get started.

Your 2025 success story starts now!

Bank of Canada Cuts Rates by 50 Basis Points: What It Means for Your Mortgage

Mon, 16 Dec 2024 21:41:18 GMT

The Bank of Canada recently made headlines by cutting its benchmark interest rate by 50 basis points, a move aimed at providing relief to borrowers and stimulating economic growth. This rate cut—the second in recent months—is a game-changer for homeowners and prospective buyers alike. As your trusted mortgage broker, we’re here to break down what this means for you and how it could impact your financial decisions.

Key Highlights of the Rate Cut

Lower Borrowing Costs : The rate cut reduces borrowing costs for variable-rate mortgage holders and those seeking new financing. Adjustable-rate mortgage holders will see immediate savings, while prospective buyers can benefit from more affordable loans.
Refinancing Opportunities : For homeowners with fixed-rate mortgages approaching renewal, this may be the perfect time to refinance and lock in a lower rate, potentially saving thousands.
Boosted Buyer Activity : Lower rates could fuel increased activity in the housing market, creating opportunities for both buyers and sellers.

What This Means for You

For Current Mortgage Holders : If you hold a variable-rate mortgage, you’re likely to see a reduction in your monthly payments. This is a great time to explore options like consolidating debt, funding home improvements, or upgrading to a larger property.

For First-Time Buyers : Reduced rates make homeownership more attainable by increasing affordability and borrowing capacity.

For Real Estate Investors : Lower borrowing costs enhance profitability, making this an opportune moment to expand your portfolio or diversify your investments.

How I Can Help

Navigating market shifts can be complex, but I’m here to simplify the process and provide tailored solutions to meet your needs. Here’s what I can offer:

Mortgage Reviews : I’ll analyze your current mortgage to identify savings opportunities and help you make informed decisions.
Pre-Approvals : Secure a pre-approval to understand your budget before entering the housing market and lock in a rate for up to 120 days.
Customized Advice : From first-time buyers to seasoned investors, I can provide guidance to ensure you maximize your benefits under the new rate conditions.

Why Stay Informed?

Understanding market trends is key to making smart financial decisions. This rate cut is an opportunity to reassess your mortgage strategy, whether you’re planning to buy, sell, or refinance. I encourage you to reach out for a no-obligation consultation to explore how these changes could benefit you.

Don’t let market changes pass you by. Whether you’re looking for advice on your current mortgage or exploring new opportunities, we’re here to help. Contact us to schedule a consultation and take the first step toward achieving your financial goals.

�� 403-968-2784
�� christine@flaremortgagegroup.com

�� Visit: www.mortgagesbychristinem.ca

Index Growth Slows Further In January

Thu, 25 Feb 2021 20:32:29 GMT

In January the Teranet–National Bank National Composite House Price IndexTM was up 0.3% from the previous month. It was the third consecutive month in which the index rose less than the month before. The increase was led by five of the 11 constituent markets: Hamilton (2.0%), Montreal (1.0%), Victoria (0.6%), Halifax (0.4%) and Vancouver (0.4%). Rises of less than the countrywide average were reported for Quebec City (0.3%) and Ottawa-Gatineau (0.1%). Indexes were down from the month before in Toronto (−0.1%), Calgary (−0.2%), Edmonton (−0.4%) and Winnipeg (−0.4%). After three months – September, October, November – in which all 11 markets of the composite index were up from the month before, it was a second consecutive month in which one or more markets were down on the month.

The price rise is consistent with the rise of home sales volume over the last several months as reported by the Canadian Real Estate Association. For a fifth straight month, the number of sale pairs[1] entering into the 11 metropolitan indexes was higher than a year earlier. The unsmoothed composite index, seasonally adjusted, was up 0.9% in January, suggesting that the published (smoothed) index could continue its uptrend.

Canadian Home Sales Continue Their Momentum To Start 2021

Fri, 19 Feb 2021 18:32:30 GMT

In January, Canadian home sales increased 2.0% month-on-month, building on December's 7.0% gain. On a year-on-year basis, they were up 35.2%.

Provincially, sales were up in 8 of 10 provinces in January, with strong gains recorded in PEI (+20.5% m/m) and Alberta (+11.9%). On the flipside, a relatively steep decline was recorded in Nova Scotia (-8.3%).

New listings dropped by 13.5% m/m in January. The combination of rising sales and falling new listings brought the months supply of inventory measure to under 1.9 months.

The national sales-to-new listings ratio also increased to 90.7% – its highest level by far. Every province was in sellers' territory in December, and many of those in the eastern part of Canada had ratios over 100% (Quebec: 128.3%; New Brunswick: 116.0%; Nova Scotia: 114.3% and PEI:101.5%). This means that there were more sales than new units listed last month in these provinces. This is a rare situation, but has occurred before in the Atlantic Provinces. However, January marked a first on this front in Quebec. Elsewhere, ratios were particularly elevated in Manitoba (86.1%) and Ontario (88.6).

Strong demand and historically tight conditions were reflected in prices. Indeed, Canadian average home prices surged by 4.7% m/m in January. On a year-on-year basis, they were up 22.8%, marking an acceleration from December. However, prices were up in 8 of 10 provinces during the month, with the largest gains occurring in Alberta (+8.1%) and Ontario (7.4%).

Compared with the average sales price, the MLS home price index, a more "like for like" measure, increased 2.0% m/m. Single family home prices rose 2.6% m/m (and a robust 17.4% y/y), whereas apartment prices advanced by a smaller 0.2% m/m (and decelerated to 3.3% y/y). In Toronto, apartment prices increased 0.4% m/m, the first gain in 4 months.

Key Implications

Home sales picked up right where they left off to start 2021. Demand was likely given a lift by ultra-low mortgage rates, which dropped again during the month. January's robust gain coupled with a strong handoff into this year virtually ensures that sales will increase in the first quarter. However, with sales likely running above fundamentally-supported levels, we think some cooling in activity will take place, especially in the second half. A dwindling supply of inventories, when benchmarked against the current sales pace, could also weigh on activity moving forward.

With today's data showing a solid gain in prices last month and new supply collapsing across nearly the entire country, markets were historically tight. This points to further strong price gains ahead in the near-term.

Also notable was that benchmark condo prices grew for the first time in several months in Toronto. Although supply remains elevated, conditions are becoming tighter than what we saw last fall. This suggests that further gains are in store.

Source: https://economics.td.com/ca-existing-home-sales

5 Ideas For Families To Make The Most of Staying Home This March Break

Fri, 05 Feb 2021 18:34:10 GMT

(NC) Due to current travel restrictions, families will be spending March Break at home. One way to keep your kids busy is by making personal finance a group activity.

Research shows that young people who discuss money matters with their parents have higher financial knowledge and skills, which leads to stronger financial well-being in the future.

Here are five ideas for simple things you can do with your kids to help them develop good money habits early:

Involve your children in age-appropriate conversations about news related to economics or budgeting, and discuss how the family is responding to the unprecedented circumstances caused by the pandemic.
Use the Financial Consumer Agency of Canada’s online interactive budget Planner to teach your children about the importance of a financial plan. Try making a budget for your next family vacation.
Encourage your child to set up a savings account. Forming good savings habits early can help kids learn how to be financially independent and avoid relying on credit cards and loans in the future. Help your child to make a plan to save for something they really want, like a new toy or video game.
Show your child how to set up an automatic payment for either a subscription or their cellphone. This is an opportunity teach them about the importance of never missing a payment, which could have a negative impact on their credit report in the future.
Review your child’s bank account agreement with them and make sure they understand their responsibilities, such as keeping their PIN secret, even from their parents. Sharing their PIN means they may not be protected from a fraudulent transaction on their account.

Understanding personal finances can have a big impact on the present and future well-being of young people. No matter what life stages your child is at, you can find unbiased and fact-based information from the Financial Consumer Agency of Canada at canada.ca/money.

Record December Caps Record Year for Canadian Home Sales

Fri, 22 Jan 2021 18:42:10 GMT

Statistics released today by the Canadian Real Estate Association (CREA) show national home sales set another all-time record in December 2020.

Home sales recorded over Canadian MLS® Systems jumped by 7.2% between November and December to set another new all-time record.

Seasonally adjusted activity was running at an annualized pace of 714,516 units in December 2020 – the first time on record that monthly sales at seasonally adjusted annual rates have ever topped the 700,000 mark.

The month-over-month increase in national sales activity from November to December was driven by gains of more than 20% in the Greater Toronto Area (GTA) and Greater Vancouver.

Actual (not seasonally adjusted) sales activity posted a 47.2% y-o-y gain in December – the largest year-over-year increase in monthly sales in 11 years. It was a new record for the month of December by a margin of more than 12,000 transactions. For the sixth straight month, sales activity was up in almost all Canadian housing markets compared to the same month in 2019.

F or 2020 as a whole, some 551,392 homes traded hands over Canadian MLS® Systems – a new annual record. This is an increase of 12.6% from 2019 and stood 2.3% above the previous record set back in 2016.

Mortgage Deferral Agreements and Their Impact

Thu, 17 Dec 2020 18:56:42 GMT

This is a subtitle for your new post

CMHC's Fall 2020 Residential Mortgage Industry Dashboard discusses mortgage deferral agreements and their impact.

At the end of the second quarter, credit unions, mortgage finance companies (MFCs) and mortgage investment entities (MIEs) have allowed mortgage deferral agreements for about 6%, 7% and 7% of their respective residential mortgage portfolios.

Chartered banks have allowed 16% of mortgages to go into deferral since the beginning of the pandemic. Of these, close to 2 out of 3 borrowers had resumed payments on their mortgages at the end of the third quarter of 2020. In the coming months, we could see higher delinquency rates if some borrowers are unable to resume their payments; these mortgages will have to be booked as arrears.

These deferral agreements have affected financial institutions’ cash flows, with reductions of:

4% in scheduled mortgage payments

3% in non-scheduled payments (accelerated monthly payments and lump-sum payments)

While remaining at low levels, mortgages in arrears (90 or more days delinquent) have increased slightly between the first and second quarters of 2020 from:

0.24% to 0.26%, on average, for chartered banks

0.23% to 0.25%, on average, for non-bank mortgage lenders

We also observe an increase in early-stage delinquencies (31 to 59 days and 60 to 89 days), which suggests that arrears could continue on an upward trend.

S ource: CMHC

Bank of Canada will maintain current level of policy rate until inflation objective is achieved, continues its quantitative easing program

Fri, 11 Dec 2020 19:15:44 GMT

The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week.

T he rebound in the global and Canadian economies has unfolded largely as the Bank had anticipated in its October Monetary Policy Report (MPR). More recently, news on the development of effective vaccines is providing reassurance that the pandemic will end and more normal activities will resume, although the pace and breadth of the global rollout of vaccinations remain uncertain. Near term, new waves of infections are expected to set back recoveries in many parts of the world. Accommodative policy and financial conditions are continuing to provide support across most regions. Stronger demand is pushing up prices for most commodities, including oil. A broad-based decline in the US exchange rate has contributed to a further appreciation of the Canadian dollar.

Canadian Federal Fall Economic Statement 2020

Thu, 03 Dec 2020 19:19:40 GMT

Canada’s Federal Finance Minister provided a first multi-year peek at the impact of the pandemic on the Canadian economy and its finances in her Fall Economic Statement 2020. The deficit is set to soar to $381 bn (17.5% of GDP) in FY21—an increase of about $40 bn since July estimates. At the same time, the government acknowledges it could be as high as $400 bn under alternative scenarios of extended and/or escalating COVID-19 cases.

The blow to government revenues contributes to a quarter of the shortfall, while COVID-19 spending will add another $275 bn of deficit financing this year. The bulk of increases in pandemic spending had already been announced—but not costed—prior to the update, whereas new announcements reflect about $25 bn. This includes a $17 bn top-up to the wage subsidy program to bring its coverage back up to 75% for the remainder of the fiscal year.

Debt as a share of the economy is expected to swell to 50% this year, peaking close to 53% in 2021 and declining thereafter. But this is only a baseline that does not incorporate a new “stimulus” package of up to $100 bn promised over the next three years that would see debt soar to around 58% of GDP by 2024 under various scenarios.

The new stimulus package will be designed in the coming months with an intent to “jumpstart” the recovery. Its withdrawal would not be time-based, rather contingent on closing the output gap, loosely defined in terms of employment metrics. These so-called “guardrails” will guide fiscal policy until the economy has recovered and the government will then “return to a prudent and responsible fiscal path”.

M arkets are likely to temporarily adjust to the implied bump in expected federal borrowing requirements (although an abundance of scenarios leaves this open to a wide range of interpretations), but this will be digested in an environment where global drivers are largely shaping bond market dynamics.

Almost One-Quarter of Canadian Seniors Are Caregivers

Thu, 26 Nov 2020 19:21:06 GMT

While older Canadians may be more likely than their younger counterparts to require help and care in their daily lives, almost one-quarter of Canadian seniors aged 65 years and older are caregivers themselves. And while the roles and responsibilities of these senior caregivers may have changed in the context of the COVID-19 pandemic, the challenges they face could be heightened.

Although the pandemic has affected the lives of all Canadians, seniors have been identified as a population particularly vulnerable to COVID-19. Not only are seniors more at risk of severe illness, they are also more affected by isolation measures. As a result, many senior caregivers who help people living outside of their household may not have been able to provide the same level of care that they usually do. Senior caregivers providing help to their spouse may also have seen their burden of care increase, given the possible lack of other support during the pandemic. For example, older caregivers who are usually supported by their adult children to provide help and care for their spouses, may have had to perform additional activities and provide more hours of care than usual. While the data in the current study were collected prior to the COVID-19 pandemic, the results highlight the many challenges senior caregivers already faced.

A new study, " The experiences and needs of older caregivers in Canada ," uses data from the 2018 General Social Survey on Caregiving and Care Receiving to provide a profile of senior caregivers in Canada. Senior caregivers are those who have provided help or care to a spouse, another family member, or a friend with a long-term health condition, a physical or mental disability, or problems related to aging.

S enior caregivers are likely to continue to play an important role in the years to come. As the needs for care and help increase with an aging population, smaller families and geographic mobility among Canadians may reduce the supply of potential younger family caregivers. Within this context, many older Canadians may be relied upon to become care providers, even though they may develop health issues of their own, including age-related physical and cognitive declines, chronic illness and some level of disability.

Week In Review

Thu, 05 Nov 2020 19:22:10 GMT

Real GDP continued to recover in August, gaining 1.2% m/m, a result above the +0.9% print expected by consensus. This marks the fourth monthly gain in a row for this indicator, however total output is still down 4.6% from its pre-pandemic (February) level. Production rose in 15 of the 20 industrial sectors covered in August, with two others remaining flat in the month. Goods sector output climbed 0.5% on decent rises for construction (+1.5%) and manufacturing (+1.2%). Industrial production edged up 0.1%. Services-producing industries, meanwhile, experienced a 1.5% surge in production, with the steepest progressions occurring in arts/entertainment (+13.7%), accommodation/food services (+7.3%) and educational services (+3.4%). Year on year, total economic output was down 3.8%.

C anadian GDP registered yet another advance in August but the economic recovery remains highly uneven. Some sectors have now fully recovered from the COVID-19 shock and currently stand above their pre-pandemic peaks. That is the case for agriculture/forestry/fishing/hunting (+2.5% compared with February), finance/insurance (+2.1%), real estate (+1.5%), wholesale (+1.3%), retail (+1.2%) and utilities (+0.8%). That said, certain industries continue to suffer. For instance, production in the mining/quarrying/oil and gas extraction segment remains 17.2% below its February level thanks in large part to depressed energy prices. The sectors most affected by social distancing measures are also struggling to recover. Output in the arts/entertainment segment is roughly half what it was before COVID. Production in accommodation/food services, meanwhile, remains 28.2% short of pre-pandemic levels. Transportation and warehousing is also tracking 20.5% below February. While the economic rebound is likely to have extended into September – Statistics Canada advance estimate suggests production expanded another 0.7% in the month – the steep gap between the best and worst performing industries is likely to endure in a context in which people continue to avoid social contacts. Looking further ahead, the real question remains whether the recovery can be sustained, especially now that COVID-19 cases are surging back up, forcing some provincial governments to reintroduce social distancing measures.

Is The BoC Doing Enough?

Mon, 02 Nov 2020 19:23:14 GMT

There was no shock and awe in the Bank of Canada’s overall set of communications this morning ( here , here and here ). In fact, the overall guidance appears to be well short of ‘crushing it’ in my opinion. CAD was little changed in the aftermath of the communications, but it had been depreciating ahead of time with the driver being Covid-19 effects on global risk appetite. The Canada curve was also little affected post-communications with less than a basis point rise in the two-year yield.

Here is what they did on policy measures:

Purchases of Government of Canada bonds were reduced to “at least” C$4B/week which is down by $1B from previously.
GoC bond purchases will now be skewed toward longer-term bonds in the 3, 5, 10, 15 and 30 year segments of the curve but with MPR guidance (page 25) that purchases in the 3- to 15-year maturities tend to have the greatest effect on household and business borrowing rates. Watch for the next statements of operational details ahead of the next secondary market purchases of GoC bonds for elaboration on what they are targeting in what proportions.
Guidance on how long the purchases will continue remains vague and simply states they will continue "until the recovery is well underway." Macklem has previously defined that point to be somewhere between the initial stages of recovery and closure of the output gap, though he did not repeat that today or offer anything else. For modelling their balance sheet I've tended to assume until mid-2021 as a middle ground, but it could be longer.
Forward guidance was moderately strengthened. They did so by now attaching a statement-codified timeline to the closure of the output gap and achievement of the 2% inflation target sometime in 2023 until which rates will remain on hold. Previously they had indicated they would not hike until this was achieved but did not attach a timeline in the statement. This shouldn’t really surprise many by way of new information. It’s priced, and we had already largely figured this to be roughly the case.

source: Derek Holt, Scotiabank Economics

Canada: Residential Sales Reached A New Record In September

Mon, 19 Oct 2020 18:24:15 GMT

Seasonally adjusted home sales rose 0.9% in September to a monthly record of 56,422 units. Sales in Ontario missed August’s record by a hair due to a 5.3% monthly decline in Toronto. Records were nonetheless registered in Ottawa and Hamilton. In the Province of Quebec, sales were at a record level in the Quebec CMA and in Gatineau, and close to August records in Montreal. In B.C., transactions reached a record outside the three main markets of Vancouver, Fraser Valley and Victoria. There were also sales records in Nova Scotia and New Brunswick. The active-listings-to-sales ratio indicates that the Canadian home resale market was favorable to sellers in Ontario Quebec, the Maritimes Provinces and marginally so in B.C. The market was balanced in the four other provinces.

PROMISES, PROMISES AND MORE PROMISES

Tue, 29 Sep 2020 18:25:12 GMT

Canada’s Parliament re-convened today with a ceremonial Speech from the Throne delivered by the Governor General.
Canada’s continued response to the COVID-19 pandemic took centre-stage, while providing a lens for a plethora of broader promises: an extension of the wage subsidy, expanded employment insurance, investments in childcare, reaffirmed commitments to universal pharmacare, and green infrastructure investments among many others.
Given the exhaustive list of priorities, this Speech is unlikely to bring the minority government down as it provides plenty of hooks for negotiations in the lead-up to a Fall update where details will be laid out.
It clearly signals more fiscal spending ahead for Canada leaving the question not if but how much. But this was largely channeled ahead, so the market reaction has been muted—or more likely, it is eclipsed by broader US and global developments.
There is little beyond lip service by way of fiscal restraint. This will be left to the Finance Minister to make inevitable trade-offs in her first budget this Fall, particularly as she may need to reserve some firepower for second waves.

S ource: Scotiabank https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.fiscal-policy.fiscal-pulse.federal.federal-budget-analysis.federal-throne-speech--september-23--2020-.html

Home Affordability Improved In Q2 2020

Sat, 19 Sep 2020 18:26:16 GMT

Housing affordability in Canada's large urban centres improved in the second quarter of 2020 after having deteriorated in the two prior quarters. Higher incomes helped in Q2 but the largest portion of the improvement came in the form of lower interest rates. Indeed, the latter declined 19 basis points in the quarter, reflecting the easing from the central bank. Combined, income and mortgage rates were more than enough to offset the increase in home prices. Still, the decline in interest rates on a quarterly average basis does not completely reflect the change in 5-year mortgage rates since the beginning of the COVID-19 pandemic. The February to June decline in mortgage interest rates was a much more significant 41 basis points. Looking ahead, the preliminary data for rates shows additional improvements in the third quarter of the year (cumulatively they are down over 70 bps). While we expect this to help affordability, home prices should remain resilient based on the latest resale market data showing record sales volumes. Homebuyers have rushed back to the market after having delayed purchases and are now being offered record-low interest rates. Once pent-up demand is exhausted, the Canadian housing market will still have to face high levels of unemployment and reduced household formation due to lower immigration.

Bank of Canada maintains commitment to current level of policy rate, continues program of quantitative easing

Wed, 09 Sep 2020 18:27:11 GMT

The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of ¼ percent. The Bank Rate is correspondingly ½ percent and the deposit rate is ¼ percent. The Bank is also continuing its quantitative easing (QE) program, with large-scale asset purchases of at least $5 billion per week of Government of Canada bonds.

Both the global and Canadian economies are evolving broadly in line with the scenario in the July Monetary Policy Report (MPR), with activity bouncing back as countries lift containment measures. The Bank continues to expect this strong reopening phase to be followed by a protracted and uneven recuperation phase, which will be heavily reliant on policy support. The pace of the recovery remains highly dependent on the path of the COVID-19 pandemic and the evolution of social distancing measures required to contain its spread.

The rebound in the United States has been stronger than expected, while economic performance among emerging markets has been more mixed. Global financial conditions have remained accommodative. Although prices for some commodities have firmed, oil prices remain weak.

I n Canada, real GDP fell by 11.5 percent (39 percent annualized) in the second quarter, resulting in a decline of just over 13 percent in the first half of the year, largely in line with the Bank’s July MPR central scenario. All components of aggregate demand weakened, as expected.

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