🏡 What’s Happening With Mortgages in British Columbia Right Now? 🏠

Hey BC! 👋 Feeling uncertain about your mortgage options in today’s market? You’re not alone. As a licensed mortgage broker, I’m here to break down what’s going on and how it could impact you:

🔑 Interest Rates: Interest rates have been fluctuating lately, and many homeowners are feeling the pressure. While some rates have risen, there are still solid options out there. Whether you’re buying, refinancing, or renewing, there’s a solution that fits your needs. The Bank of Canada meets again on March 12, and there’s a 78% chance of a 0.25% decrease in the key rate. Fixed rates have been up and down following bond yields, but for long-term savings, variable rates are still projected to save you more over the next 5 years. If predictability is important to you, a shorter fixed-term mortgage might be the right option.

💼 Inflation & The Housing Market: Inflation is having a real impact on both mortgage rates and home prices. But don’t worry — you still have options. Working with a professional can help you navigate these challenges and find the best path forward.

💡 First-Time Homebuyers: Thinking about buying your first home? Don’t let the market overwhelm you. There are still fantastic programs and incentives out there. If you’re unsure what’s available for first-time buyers, reach out, and I can walk you through the options!

🏠 Pre-Approvals: Now’s a great time to get pre-approved if you’re planning to buy. With the right pre-approval, you’ll be in a better position to make offers and negotiate confidently. I offer a Free Google Mortgage Toolbox app that can pre-qualify you in 60 seconds, so you can see what you can afford before you even start house hunting.

👥 Refinancing: If you have existing debt or want to tap into the equity in your home, refinancing might be a smart move. Let’s chat about current trends and how refinancing could benefit you.

Let’s make sure you’re equipped with the knowledge to make the best financial decisions for your future. Reach out if you have any questions — I’m here to help!

Did you know that if you have an insured mortgage on a new build, you are eligible for a 25% refund on your default insurance premium if the property meets current Energy Efficient certification standards?

Here’s the key info:

• In BC, most new builds are now required to meet BC Energy Step Code standards as of May 1st, 2023—meaning most new builds qualify for this refund.
• The refund applies to any insured mortgage, and you have 2 years to apply for it from the date of purchase.
• CMHC, SAGEN, and Canada Guaranty all offer this refund program, making it a fantastic value-add for insured buyers.

In fact, 75% of eligible buyers never apply for this refund, often because they don’t know it’s an option. So if you have purchased a new build in the last two years—you may be eligible for cash back!

Important Points:

• For BC Energy Step Code, almost all new builds will meet these energy-efficient standards. This includes homes built before May 2023, which can still be eligible for the refund if they meet certification.
• The refund application is straightforward and done online. After approval, you typically receive your refund within 30 days.
• For any new build, there is a 5 year window since original build date for the refund to be applicable: example built in 2020, 1^st buyer can apply for refund, sells in 2023 and that new buyer can also apply for a refund if they do an insured purchase.

Additionally, if you are a First-Time Homebuyers (FTHB), remember that the new 30-year amortization rule for new builds came into effect on August 1st, 2024. And for FTHB, the property tax exemption on new builds has increased from $750,000 to $1.1M as of April 2024.

For more details and links to the application pages, check out the following:

• CMHC – Eco Plus Partial Premium Refund Application
• Sagen – Energy Efficient Housing
• Canada Guaranty – Energy Efficient Advantage Program

With the Bank of Canada rate decreases throughout the summer and now into January, I thought this would be a great opportunity to update you on what this means for your mortgage.

If you’re on a variable-rate mortgage, this will result in decreases in your mortgage payments to match the current rates giving you more cash flow each month!

For example, if your mortgage balance is $750,000 as an example at the previous 5.95% interest rate your approx. payment was likely $4556. With the Dec drop to 5.45% your approx. payment went down to $4340 and with the recent Prime Rate drop to 5.20%, bringing those payments down to apprx $4234/mth. Over the past 3 Rate Drops (there have been 6 consecutive rate drops now), this is an estimated $321.29/mth decrease on your payment (=$3855/yr).

*Rates based on example of Prime minus .50% (5yr term, 25yr amortization, compounded semi-annually.

For those of you who are on fixed-rate mortgages* or have renewals coming up, this reduction in interest rates could make it easier on you at renewal time. The decrease in interest rates gives you more borrowing power in the market – this means your money can go further!

*Remember, the drop in the Bank of Canada fixed rates may not result in the same drop for fixed mortgages as with variable rates. The decrease in interest rates will however open up new variable options and, depending on your lender may still provide allow you to take advantage of lowered rates.

This is the same for first-time buyers! Lower interest rates mean you now have more borrowing power in the marketplace, which could help you find that perfect home by allowing you to allocate monthly funds to your mortgage more comfortably.

Whether you’re a current homeowner, looking to renew, or wanting to purchase, this is exciting news for Canadians across the country!

However, keep in mind, rate is not the be-all-end-all of mortgages. It is important to keep in mind that factors such as type of mortgage, down payment amount, payment schedule, amortization, and more will also affect your mortgage and affordability.

If you want more information about your specific mortgage and how this affects your situation, please don’t hesitate to reach out to me today!

Refinancing Your Mortgage in 2025.

Refinancing your mortgage can be a smart financial move for many reasons, and as your trusted mortgage advisor, I’ve seen how much it can benefit homeowners!

Ideally, refinancing is done at the end of your mortgage term to avoid penalties, but the timing can vary depending on your goals. For some, it’s about unlocking the equity in their home to fund renovations or cover big expenses like college tuition. For others, it’s an opportunity to consolidate debt, lower their interest rate, or change up their mortgage product.

Let’s take a closer look at some of the ways refinancing your mortgage can help!

• Get a Better Rate: As interest rates have continued to decrease with the Bank of Canada updates these past few months, now is a great time to consider refinancing for a better rate and lower overall mortgage payments!  Experts anticipate the Bank of Canada will move to have the overnight rate down to 4.0% at year-end and potentially down to 2.75% for 2025.
• Consolidate Debt: When it comes to renewal season and considering a refinance, this is a great time to review your existing debt and determine whether or not you want to consolidate it onto your mortgage. In most cases, the interest rate on your mortgage is less than you would be charged with credit card companies or other forms of financing you may have. Plus, having all your debt consolidated into a single payment can keep you on track!
• Unlock Your Home Equity: Do you have projects around the house you’ve been dying to get started on? Need funds for a large purchase such as a new vehicle or post-secondary education? When you are looking to renew your mortgage, it is a great opportunity to consider refinancing in order to take advantage of the home equity you have built up to help with these larger changes in your life!
• Change Your Mortgage Product: Are you unhappy with your existing mortgage product? If you have a variable-rate or adjustable-rate mortgage, you may be considering locking it in at the lower rates. Alternatively, you may want to switch your current fixed-rate mortgage to a variable option with the interest rates expected to continue decreasing into 2025. You can also utilize your refinance to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

PLUS! Some latest changes by the Government of Canada will make it even easier for you when it comes to your renewal and refinancing options:

• Those of you who may have an uninsured mortgage will no longer have to pass the stress test as of November 21st. This means that you have more flexibility when it comes to rates and mortgage products in renewal cases where you wish to switch lenders without adding additional funds to your mortgage!
• Beginning January 15, the federal government will allow default-insured mortgages to be refinanced to build a secondary suite. If you’ve been considering adding a suite to your property, you may be eligible to access up to 90% of your home’s equity for this purpose.

Reach out and let’s see what your best options are!

Exciting news for prospective homebuyers!

The Canada Mortgage and Housing Corporation (CMHC) has introduced new rules that can make homeownership more accessible, especially for first-time buyers. These changes offer more flexibility and options when it comes to purchasing a home.

Key Changes in the New CMHC Rules:

1. Lower Down Payment Requirements: You can now put down less than 20% on properties valued up to $1.5 million. This is a game-changer for those looking to purchase a home in higher-value markets without needing a large down payment.
2. Down Payment Example: For example, if you’re purchasing a property valued at $1.5 million, the minimum down payment required would be $125,000 (5% on the first $500k and 10% on the remaining up to $1,500,000).
3. Extended Amortization Period: The new rules also allow for an amortization period of up to 30 years, which can help lower monthly payments and make it easier for first-time homebuyers to manage their mortgage.

These changes aim to make homeownership more attainable, giving you more financial flexibility and a wider range of options.

How a Licensed Mortgage Broker Can Help You

Navigating these new rules can be overwhelming, but as a licensed mortgage broker, I can assist you in exploring all available options. I’ll help you understand how these new rules apply to your unique situation and find the best mortgage solution to suit your needs.

Feel free to contact me if you would like more information or to discuss how these changes can benefit you in your homebuying journey.

Today marks an important victory for Mortgage Professionals of Canada and the housing market. We are excited to share that the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, announced significant changes to mortgage rules—many of which reflect MPC’s persistent advocacy on behalf of our industry and all Canadian homebuyers.

Among the new measures are several key initiatives that we have long advocated for:

An Increase to the Insured Mortgage Price Cap: The government will raise the price cap from $1 million to $1.5 million, reflecting the realities of today’s housing market. This change, effective December 15, 2024, will help more Canadians qualify for insured mortgages and make homeownership more attainable, especially for younger Canadians.

Expanded Eligibility for 30-Year Amortizations: First-time homebuyers and all buyers of new builds will now be eligible for 30-year insured mortgage amortizations. This is a crucial step in reducing monthly mortgage payments and helping more Canadians, particularly Millennials and Gen Z, achieve the dream of owning a home.

Increased Mortgage Competition: The strengthened Canadian Mortgage Charter now enables insured mortgage holders to switch lenders at renewal without being subject to another stress test. This will foster greater competition and ensure Canadians have access to the best mortgage deals.

These policy changes are a direct result of MPC’s tireless advocacy and the collective efforts of our members. We’ve worked hard to make sure the federal government understands the challenges Canadians face in buying a home. Today’s measures prove that our advocacy has been heard, and more importantly, respected. This is a major win not just for first-time buyers, but for the entire housing sector.

But we’re not stopping here. MPC will continue to push for policies that make homeownership more accessible and sustainable for all Canadians. We’ll keep pushing for the extension of 30-year amortizations to all homes, not just new builds, and for the implementation of an income verification tool to fight mortgage fraud during our upcoming advocacy on Parliament Hill on September 24.

Our mission remains clear: to advocate for a fair, transparent, and affordable housing market that works for everyone.

Thank you to all our members for your ongoing support. Let’s take a moment to celebrate this achievement—and get ready for the next steps in our advocacy journey.

“The federal government’s decision to raise the insured mortgage cap from $1 million to $1.5 million is a huge win for Canadians. We’re also happy to see the expansion of 30-year amortizations to all first-time homebuyers and to all buyers of new builds, as well as the exemption of the stress test when switching lenders at renewal. This milestone, achieved through our persistent advocacy, shows that housing is now truly a top priority for the government and represents a significant win for first-time buyers and the housing market as a whole. Our mission remains steadfast: to advocate for fair, transparent, and affordable housing market for everyone.”

– Lauren van den Berg, President and CEO of Mortgage Professionals of Canada

Closing Costs – The Real Numbers You Need to Budget For.

Buying a home is one of the most exciting ventures in life! To ensure it goes smoothly, you need to have a proper budget in place to protect your financial security and help you make the best decision for your future location. However, the cost of the home is not the only cost that you need to budget for! The temptation will always be to start looking at the very top of your budget but fees, such as mandatory closing costs, can easily put you over the top. Knowing the real numbers will make it that much easier to stay within your budget and maintain your financial comfort.

Closing costs are a one-time fee associated with the sale of a home and are separate from the mortgage insurance and down payment. Typically, these costs range from 1.5-4% of the purchase price, depending on your location. This means, for an $800,000 home, you would be looking to budget around $22,000 on average.

Here are a few closing costs to keep an eye out for:

• Land Transfer Tax: This is calculated as a percentage of the purchase price of your home, with the amount varying in each province. Some cities, such as Toronto, also have a municipal LTT.
• Legal Fees and Disbursements: You can expect to incur a minimum of $500 (plus GST/HST) on legal fees for the preparation and recording of official documents around your purchase.
• Title Insurance: Most lenders require title insurance to protect against losses in the event of a property ownership dispute. This is purchased through your lawyer/notary and is typically $300 or more.
• PST on CMHC Insurance: Though CMHC insurance itself is financed through the mortgage, PST on the insurance is typically paid at the lawyers and sometimes deducted from your advance.
• Home Inspection Fee: A home inspection is highly recommended as a condition of your Offer to Purchase to prevent any future surprises. This can cost around $500.
• Appraisal Fee: An appraisal is performed to certify the lender of the resale value of the home in the case you default on the mortgage. The cost is usually $400 – $600 but is typically covered by the lender.
• Property Insurance: Property insurance covers the cost of replacing your home and its contents, and must be in place on closing day. This is paid in monthly or annual premiums.
• Prepaid Utility Bills: You may need to reimburse the previous owner of your property for prepaid costs such as property taxes, utilities, and so forth.
• Property Taxes: Property taxes are due on an annual basis and are calculated as a percentage of the home value and vary by municipality. You also may need to reimburse the previous property owner if he/she has already paid property taxes for the full year.

Knowledge is power and understanding the hidden costs associated with purchasing a home can help you create a realistic budget and ensure you remain within your financial means. Contact a DLC Mortgage Expert if you have any questions about your current purchase process or if you are looking to buy a new home now or in the future!

DLC Marketing Team

Is your mortgage coming up for renewal? Do you know about all the incredible options renewing your mortgage can afford you? If not, I have all the details here on how to make your mortgage renewal work for YOU
MORTGAGE RENEWAL BENEFITS:
Get a Better Rate…
Are you aware that when you receive notice that your mortgage is coming up for renewal, this is the best time to shop around for a more favorable interest rate? At renewal time, it is easy to shop around or switch lenders for a preferable interest rate as it doesn’t break your mortgage. With interest rates expected to come down, taking some time to reach out to me and shopping the market could help save you money (your bank’s 1st offer isn’t always the best offer)!

Consolidate Debt…
Renewal time is also a great time to take a look at your existing debt and determine whether or not you want to consolidate it onto your mortgage. For some, this means consolidating your holiday credit card debt into your mortgage, for others it could be car loans, education, etc. Regardless of the type of debt, consolidating into your mortgage allows for one easy payment instead of juggling multiple loans. Plus, in most cases, the interest rate on your mortgage is less than you would be charged with credit card companies.

Start on that Reno…
Do you have projects around the house you’ve been dying to get started on? Renewal time is a great opportunity for you to look at utilizing some of your home equity to help with home renovations so you can finally have that dream kitchen, updated bathroom, OR you can even utilize it to purchase a vacation property!

Change Your Mortgage Product…
Are you not happy with your existing mortgage product? Perhaps you’re finding that your variable-rate or adjustable-rate mortgages are fluctuating too much and you want to lock in! Alternatively, maybe you want to switch to variable as interest rates start to level out. You can also utilize your renewal time to take advantage of a different payment or amortization schedule to help pay off your mortgage faster!

Change Your Lender…
Not happy with your current lender? Perhaps a different bank has a lower rate or a mortgage product with terms that better suit your needs. A mortgage renewal is a great time to switch to a different bank or credit union to ensure that you are getting the value you want out of your mortgage if you are finding that your needs are not currently being met.

Regardless of how you feel about your current mortgage and what changes you may want to make, if your mortgage is coming up for renewal or is ready for renewal, please don’t hesitate to reach out! I’d be happy to discuss your situation and review any changes that would be beneficial for you to reach your goals; from shopping for new rates or utilizing that equity! Plus, I can help you find the best option for where you are at in your life now and help you to ensure future financial success.

When it comes time to Renew Your Mortgage, most Lenders will send you a Renewal Letter when there is around 3mths remaining on your term.

Did you know, nearly 60% of Borrowers(you), simply sign & send it back without ever shopping around for a more favorable interest rate…
This is Actually the Best Time to Check out Your Options, Shop Around & Redo Your Mortgage Without A Penalty
& I can Help!!