As a mortgage consultant, I simplify the financing process by finding the best loan options for you.  Whether buying a new home, refinancing or exploring equity lines and reverse mortgages, I work with various lenders to meet your needs.  From managing renewals to consolidating debt and securing loans for personal and investment properties, I’m here to make your mortgage journey smooth and efficient.

Here are some of the ways I can help:

Securing Loans for Buying a Home, Rental Property, or Second Home: Assisting with obtaining loans for purchasing your main home, rental properties, or second homes.

Renewing Mortgages: Helping with renewing your mortgage at the end of each term, evaluating options, negotiating better rates and terms, and ensuring a smooth transition to a new mortgage. Assisting with switching lenders if needed to achieve better rates and terms.

Refinancing Your Mortgage: Guiding you through obtaining a new mortgage to replace an old one, potentially securing better rates, lowering payments, or accessing extra funds for renovations, emergency expenses, or helping others buy property.

Obtaining Home Equity Lines of Credit (HELOCs): Providing assistance in securing a flexible line of credit based on your home’s equity for various needs.

Accessing Reverse Mortgages: Helping seniors tap into their home’s value with reverse mortgages, allowing them to stay in their homes while obtaining additional funds.

Financing Construction Loans: Assisting with obtaining financing for building a new home or major property renovations.

Bridge Loans: Providing short-term loans to cover the gap between buying a new home and selling an old one.

Consolidating Debt: Helping combine existing debts into your mortgage to simplify payments and potentially reduce interest rates.

Whether you’re planning to buy a new home, refinance an existing mortgage, or explore other financing options, I’m here to assist.  The mortgage process involves many steps, but with the right guidance, it can be straightforward.  If you have any questions or need assistance with your mortgage needs, don’t hesitate to reach out.  I’m committed to providing clear and effective solutions to help you achieve your financial goals.  Let’s connect and I look forward to seeing how I might best help you.

Image Credit: Fabio Bracht Unsplash

Inflation in Canada decelerated once again in July to its slowest pace in three years, assuring the central bank will cut rates for the third consecutive meeting on September 4. The US is also widely expected to begin easing monetary policy at its September confab.

The annual inflation rate in Canada fell to 2.5% in July from 2.7% in June, matching market expectations. The deceleration in headline inflation was broad-based, stemming from lower prices for travel tours, passenger vehicles and electricity. This confirmed the Bank of Canada’s expectation that inflation would fall to 2.5% in the second half of this year.

The CPI rose 0.4% in July after falling 0.1% in June. Gasoline prices increased month over month in July (+2.4%), putting upward pressure on the monthly CPI figure. The CPI rose 0.3% in July on a seasonally adjusted monthly basis.

The Bank of Canada’s preferred measures of core inflation, the trim and median core rates, exclude the more volatile price movements to assess the level of underlying inflation. The CPI trimmed edged down to 2.7% last month from 2.9% in June. The CPI median fell two ticks to 2.4%.

The central bank’s two core inflation measures decreased, averaging a 2.55% yearly pace, from a downwardly revised 2.7% a month earlier. The third chart below shows the 3- and 6-month moving averages for the average of median and trim CPI measured as an annualized percentage change. The 3- and 6-month moving averages fell in July, with the 6-month figure just above the central bank’s target of 2%.

Bottom Line

This week’s inflation reading is good news for the Bank of Canada, giving them leeway to cut interest rates next week. July marks the seventh consecutive month that the headline yearly inflation rate has been within the BoC’s target range, bringing the annual pace of price pressures back to its weakest levels since 2021.

This week’s inflation data will give the central bank confidence that the May rise in inflation was temporary. Annual inflation will reach the Bank’s 2% target by some time next year. This opens the way for the Bank to cut the overnight rate on September 4 by 25 bps to 4.25%.

In July, mortgage interest costs and rent remained the most significant contributors to the annual inflation rate change. Mortgage interest costs were up 21% in July compared with 22.3% in June, while rents rose 8.5% compared with 8.8%. Excluding shelter costs, the consumer price index rose 1.2% from a year ago versus 1.3% in June.

Labour markets have eased since the Bank’s last decision date. Canada shed 2,800 jobs in July, and the unemployment rate was steady at 6.4%, its highest level in over two years. Bank officials have expressed their concern that a further decline in the job market may delay a recovery in household spending, putting downward pressure on growth.

Dr. Sherry Cooper

Chief Economist, Dominion Lending Centres

Image Credit: Ryan (no last name) Unsplash

With the next Bank of Canada decision approaching, some borrowers question whether to wait for a potential drop in the prime rate before evaluating their mortgage renewal options.  Similarly, those buying properties might also contemplate if they should delay their decision on which rate type to select.  While thinking that a lower prime rate will automatically lead to better mortgage offers may seem intuitive, the reality is more complex.

The Key to Variable Rate Pricing: The Variable Rate Discount

Variable rate mortgage rates are comprised of two main factors: the prime rate, and the discount the lender offers off that rate.  The variable rate discount is the pricing component that determines how much less you’ll pay compared to the prime rate.

If a lender offers a 5-year variable mortgage with a discount of -0.70% off the prime rate (currently 6.7%), the effective rate would be 6.0%.  This discount remains constant throughout the 5-year term of the mortgage, so the rate will always “float” at 0.70% below whatever the prime rate is.

Lenders Can Change Variable Discount Offers At Any Time

If a given lender has too many fixed-rate mortgages on their books they may deepen variable discounts to attract more borrowers to take variable rates, and vice versa.  And in stable markets, banks may offer deeper discounts as well.

Fixed Rates and the Variable Rate Discount: Independent of Prime Movements

Both fixed rates and variable rate discounts are influenced by lenders’ cost of funds, credit risk, competition, housing and financial markets, and broader economic conditions.  Just as the variable rate discount is not directly tied to prime rate movements, neither are fixed mortgage rates.  Though both may trend in the same direction as the prime rate over time, a variety of factors are at play, which may or may not coincide with changes in the prime rate.

Bottom Line

Bank of Canada rate decisions do influence fixed and variable rate pricing, but not typically in a synchronized way. Rather than trying to time decision-making with Bank of Canada announcements, there’s likely more value in making rate decisions by evaluating current options and forecasted trends as they align with your financial goals.  Please reach out at any time should you wish to discuss your mortgage, I am always happy to help.

Image Credit: Raffaele Parente Unsplash