Chris Vanderluit - First Financial Lending

11/05/2025

Canada’s housing market just got another big spotlight in the 2025 federal budget — and if you’re thinking about buying, investing, or just trying to make sense of all the changes, here’s what you need to know...

1. The Government’s Big Housing Push

The new Build Canada Homes initiative is being called the government’s “flagship” housing program — with $13 billion over five years and a goal to double the pace of home construction over the next decade.

This program pulls together existing efforts like the Housing Accelerator Fund, Apartment Construction Loan Program, and the conversion of unused federal buildings into homes. The idea is to build faster, more efficiently, and at a much larger scale — using modern construction methods to cut timelines and costs.

What this means for you is that we start to see more supply hitting the market in the years ahead — which could help with long-term affordability, especially for first-time homebuyers and renters. Though these effects won’t happen overnight. New construction takes time, and demand is still outpacing supply in most regions.

2. Help for First-Time Homebuyers

One of the biggest direct benefits in this budget is the removal of the GST on new homes for first-time buyers (up to $1 million in value).

That means up to $25,000 in savings on a $500,000 home — and it’s designed to make entry-level new builds more attainable.

If you’ve been looking at pre-construction homes or new builds, this is definitely a change worth exploring. Combined with flexible mortgage options, it could open the door to homeownership sooner than you think.

3. Boosting the Mortgage and Rental Markets

The government is also expanding the Canada Mortgage Bonds (CMB) program — increasing its annual cap from $60 billion to $80 billion.

That might sound technical, but it basically means more liquidity and lower borrowing costs for lenders and developers — which helps get more rental and multi-unit projects built. Over time, that could improve housing options and stabilize rents.

4. What’s Missing

Many in the mortgage industry were hoping for progress on an income verification system through the CRA — something that could have made the mortgage process smoother and reduced fraud. That didn’t make it into the budget, but it’s still on the industry’s radar.

In short:

The 2025 budget isn’t a quick fix, but it continues the shift toward a long-term, high-volume housing strategy — one that aims to address affordability through supply, efficiency, and investment.

As a mortgage professional, I’m watching these changes closely because they affect your borrowing power, housing options, and timing in the market.

If you’re thinking about buying or refinancing, it’s a great time to talk about how these policies might shape your next move. Reach out to me anytime to discuss: [email protected]

http://www.chrisvanderluit.com

04/07/2025

The recent U.S. tariffs have introduced major uncertainty into the Canadian economy. The result has left many homeowners asking a critical question: is now the right time to lock in a variable-rate mortgage? It's a contradictory picture, with fears of rising inflation bumping up against the reality of falling bond yields. This makes the decision between fixed and variable mortgage rates tricky for homeowners, those renewing, and new buyers alike.
: Why Inflation Might Creep Up

A major worry is that new U.S. tariffs, along with Canadian counter-tariffs, could make everyday goods more expensive. Projections from the Bank of Canada, OECD, The Conference Board of Canada and TD Economics have all outlined expected inflation rates of around 3% or higher for 2025.

Higher inflation makes the Bank of Canada's job tougher. If prices rise quickly and stay high, the Bank of Canada might have to pause expected rate cuts or even raise rates again, which would directly increase payments for those with variable-rate mortgages.
: The Twist: Why Fixed Rates Might Dip (For Now)

Confusingly, the same tariff threats sparking inflation worries can also make fixed mortgage rates cheaper, at least temporarily. Here's how:

Tariff talks create economic jitters. When investors get nervous, they often pull money out of riskier investments (like stocks) and seek safety investing in government bonds instead.

Bond Yields Drop: This increased demand for bonds pushes their yield down. We've seen this happen recently, with key bond yields in the U.S. and Canada falling.

Fixed Rates Follow: Government of Canada bond yields are a major influence on fixed mortgage rates in Canada. When yields drop, fixed mortgage rates tend to follow, often within a few weeks.

So, we have a strange situation where tariff fears could push variable rates higher eventually (due to inflation) but might push fixed rates lower in the short term (due to market fear).
: Will Higher Inflation Stick Around This Time?

A big question is whether any inflation jump caused by tariffs will be a short-term blip or something more lasting. During the pandemic, inflation stuck around partly because of the massive government support programs. This time might be different as there isn't the same level of government stimulus.

This could mean businesses and workers have less power to keep pushing prices and wages up in a cycle. The Bank of Canada and the U.S. Federal Reserve seem to recognize this and have suggested they won't overreact to the initial price bumps from tariffs.
: Locking In vs. Staying Variable: Your Call

With all these crossed signals, deciding what's right for your mortgage depends on your personal situation and comfort level with risk.

Consider Locking In:

- If your job seems insecure, but you still have some household income (e.g., from a spouse), then locking in can provide stability in uncertain times.

- If financial stability and predictable payments are more important to you than potentially saving a bit with variable rates, it may be wise to lock in — better to be safe in an unsafe environment.

Consider Staying Variable:

- If you're in no immediate rush. Fixed mortgage rates are likely to get better in the coming weeks due to falling bond yields. Waiting could lead to a more favourable lock-in rate.

- If you're not at high risk of default or disruption and you can handle a bit of short-term rate fluctuation, you might be better off riding out the current environment a little longer.
: Making Your Move

The key is not to make a rushed decision based purely on fear. The situation is still unfolding.

Watch Fixed Rates: Since bond yields have dropped, keep an eye on fixed mortgage rates over the next few weeks – they might improve.

Check Your Budget & Risk Tolerance: How much could your payment increase before it becomes stressful?

Talk to Your Lender: Before considering switching lenders, ask your current lender what fixed rate they would offer you to convert your variable mortgage. This conversion is often simple and avoids penalty fees and legal costs. Compare their offer to the wider market.

The next few months will bring more clarity. How tariffs are implemented, the economy's performance and the Bank of Canada's actions will shape the best path forward. While immediate, sharp rate hikes seem unlikely right now, the longer-term outlook remains uncertain.

As a mortgage agent I'm here to help you make sense of these changes and find the mortgage strategy that best fits your needs and financial future. Never hesitate to reach out to me if you have any questions: [email protected].

02/12/2025

Trump's Tariff Threat: What It Could Mean for Ontario's Housing and Mortgage Market

Recent developments in U.S. trade policy under former President Donald Trump have reignited concerns about the economic impact on Canada, particularly Ontario's housing and mortgage markets. Trump's decision to impose a 25% tariff on all steel and aluminum imports, including those from Canada, adds a new layer of complexity to an already uncertain economic landscape. These tariffs, set to take effect on March 4, 2025, could have significant ramifications for homeowners and prospective buyers in Ontario.
: The Tariff Situation
Trump's latest move eliminates previous exemptions for allies like Canada and the EU, marking a significant escalation in trade restrictions. The tariffs are expected to increase costs for imported steel and aluminum, which are critical to various industries, including construction and manufacturing. While Canada has announced retaliatory measures, including $155 billion in duties on American products, the economic uncertainty remains high.
: Construction Costs and Home Prices
The 25% tariff on aluminum and steel is likely to raise construction costs significantly. Ontario, home to six of Canada's 13 steel plants and a major hub for aluminum production, will face higher material costs that could ripple through the housing market. Builders may pass these increased costs onto buyers, further exacerbating affordability issues in an already expensive housing market. Renovation projects could also see price hikes, discouraging homeowners from upgrading their properties.
: Market Slowdown
Economic uncertainty stemming from these tariffs could lead to a temporary slowdown in the housing market. Potential buyers might hesitate to make purchases amid fears of rising costs and economic instability. Meanwhile, some homeowners may feel compelled to sell if financial conditions deteriorate, potentially increasing housing supply but also depressing prices in certain segments.
: Mortgage Rates
The tariff announcement has already influenced financial markets. The five-year Government of Canada bond yield has declined sharply, which could lead to lower fixed mortgage rates. This provides a short-term benefit for homebuyers or those looking to renew their mortgages.
: Bank of Canada's Response
If the tariffs significantly impact Canada's economy, the Bank of Canada might consider further interest rate cuts to stimulate growth. This could make borrowing more affordable but may not offset the broader economic challenges posed by the tariffs.
: Lending Criteria
On the flip side, financial institutions might tighten lending criteria due to increased economic risks. Even with lower mortgage rates, stricter lending standards could make it harder for some buyers to qualify for loans.
: Broader Economic Implications
Ontario's economy is deeply integrated with U.S. markets, particularly in sectors like automotive manufacturing that rely heavily on steel and aluminum. The tariffs are expected to disrupt supply chains and increase costs across various industries. The Canadian government estimates that over 43,000 jobs connected directly or indirectly to steel and aluminum production are at risk. This economic strain could further dampen consumer confidence and spending power.
: Looking Ahead
The imposition of Trump's aluminum and steel tariffs introduces significant uncertainty into Ontario's housing and mortgage markets. Homeowners and prospective buyers should remain vigilant as negotiations between Canada and the U.S. continue. While lower mortgage rates may offer some relief in the short term, rising construction costs and broader economic challenges could offset these benefits.

As your mortgage agent, I am here to help you navigate these turbulent times. Whether you're looking to buy, refinance, or renew, I'm here to help you navigate these changes and make informed decisions about your mortgage and financial future.

07/18/2024

With the possibility of another Trump presidency becoming increasingly likely, some homeowners and prospective buyers are wondering how this could impact their mortgage rates and financial plans.

While Trump strongly advocated for lower interest rates in his first term and will apply pressure to the Federal Reserve in a second term, the overall economic picture is a more complex. Below is an analysis of the relationship between Trump's policies, bond yields, and their potential impact on Canadian homebuyers.

••• Trump's Policies •••

Trump's economic policies are likely to be inflationary, which could lead to higher bond yields. Some key aspects of his proposed policies include:

1. Extending tax cuts from 2017 despite significant budget deficits.

2. Reducing the workforce by deporting millions of undocumented immigrants.

3. Implementing a 10% universal tariff on imports and 60% tariffs on Chinese products.

4. Potentially weakening the Federal Reserve's autonomy.

These policies could increase inflation expectations, causing investors to demand higher yields on bonds to compensate for the decreased purchasing power of future payments.

••• Bond Market Reactions •••

The bond market has already shown signs of reacting to the prospect of a Trump presidency:

1. Long-term Treasury bond yields have increased more than short-term yields, indicating growing inflation concerns.

2. The "Trump trade" trend has been gaining traction since President Biden's disastrous debate performance, with betting markets now estimating Trump's chances of winning at 69%, up from 52% a month earlier.

3. Subtle jumps in bond yields have occurred after instances of good news for Trump's electoral chances.

••• Impact on Canadian Homebuyers •••

For Canadian homebuyers, the implications of higher U.S. bond yields could be significant:

1. Mortgage rates: If Canadian bond yields follow U.S. yields upward, mortgage rates in Canada could also increase, making homeownership more expensive.

2. Economic uncertainty: Trump's proposed tariffs and trade policies could complicate economic relations between the U.S. and Canada, potentially leading to economic instability.

3. Currency fluctuations: Changes in the relative strength of the U.S. and Canadian dollars could affect housing affordability for Canadians.

It's important to note that the relationship between political changes and financial markets is complex. While current trends suggest higher yields and borrowing costs under a potential Trump presidency, the actual outcome may vary depending on numerous factors, including market dynamics and policy implementation.

Still, Canadian homebuyers should stay informed about these developments and consider how potential changes in interest rates and economic conditions might affect their purchasing/refinancing plans. Consulting with a mortgage agent and keeping an eye on both U.S. and Canadian economic indicators can help in making informed decisions in this uncertain environment.

07/02/2024

For many, the decision to buy a home isn’t just a financial milestone but a deeply personal one that can shape your future in countless ways. Though with all the conflicting advice and uncertain predictions about mortgage rates and ever-changing housing market trends, it can feel impossible to know when to take the plunge and buy. So, how do you know when it's truly the right time to buy a home?

--The Complexities Behind Mortgage Rates--

Before diving into timing, it's crucial to understand the complexities that shape mortgage rates. Media headlines very often oversimplify the factors influencing rates, focusing almost solely on central bank policies like those of the Bank of Canada. While these decisions certainly do have an effect, the reality is far more nuanced.

For instance (and bear with me for a moment as things are about to get dry)... Recently, Japan, the largest holder of U.S. Treasury securities, has been selling off U.S. Treasury bonds in order to buy back Japanese Yen and increase its value. This sell-off of U.S. bonds drives bond yields higher, which contributes to higher Canadian Government Bond yields, upon which fixed mortgage rates are based. So if you’ve been following rates and are wondering why the fixed rates haven’t been coming down after the Bank of Canada rate decrease, now you know. Bet you didn’t hear THAT on the CBC!

--The Fallacy of Perfect Timing--

This example illustrates one of the many ways that global economic dynamics—such as currency fluctuations or policy decisions in other countries—can exert significant influence on Canadian bond yields, which in turn impacts mortgage rates domestically. This interplay underscores the unpredictability of trying to time the market based solely on interest rate forecasts.

Even seasoned economists have faltered in their predictions, highlighting the inherent uncertainty in forecasting market movements. For example, in 2021, many economists predicted that interest rates would remain low for an extended period. Instead, we saw rapid rate increases in 2022 and 2023. Similarly, many economists expected Bank of Canada rate cuts far sooner and more aggressively than they’ve actually come.

--Avoiding Paralysis by Analysis--

It's easy to get caught up in waiting for the perfect alignment of low interest rates and ideal market conditions. However, history has shown that market timing is more myth than reality for most individuals. For instance, while waiting for rates to drop, you might miss out on properties that meet your needs and fit your budget. Additionally, home prices can appreciate significantly even in short periods, potentially offsetting any savings from lower interest rates. Instead of chasing elusive timing, focus on what you can control: your financial readiness and personal circumstances.

--Personal Readiness: The True Indicator--

In light of these complexities, the most reliable indicator of when to buy a home is personal readiness. This readiness encompasses several key factors:

Financial Preparedness: Do you have a sufficient down payment saved? Can you comfortably afford the monthly mortgage payments along with other financial obligations?

Property Fit: Have you found a property that meets your needs and preferences? Does it align with your long-term goals and lifestyle?

Stability: Is your employment situation stable? Are you confident in your ability to maintain your income?

--Trusting Your Decision--

So, when is the right time to buy a home? It's when it feels right for you. No one can predict with certainty where rates or prices will go. By staying informed about the market, being financially prepared, and listening to your own instincts, you can make a confident decision.

Buying a home isn't just about numbers—it's about finding a place where you can build a life and create memories. Trust yourself, seek advice when you need it and make a choice that fits your vision for the future.

If you have any questions about your financial preparedness, don’t hesitate to drop me a line—I’m here to help.

Happy house hunting!

06/28/2024

The idea of buying a home can feel like A LOT! With stubbornly high interest rates and pricey properties, homeownership can seem far out of reach for so many. From saving for a down payment and affording monthly mortgage payments to finding a suitable property within budget, there are a number of challenges to overcome.

Fortunately, there are several “homebuyer hacks” that can make owning a home more attainable than you think. Here are three lesser-known options you may not be aware of:

1. Down Payment Assistance Programs

Navigating the down payment hurdle is crucial but there are programs that can help:

Ourboro.com: This program focuses on the GTA and parts of Southwestern Ontario. It contributes between 5% to 15% of the home's purchase price as a down payment, up to $250,000. Ourboro's share in the equity and appreciation of the home equals their initial percentage contribution compared to the owner's.

Benefits Include:

- Achieving a 20% down payment without needing mortgage insurance.
- Lowering the amount of a mortgage needed with a larger down payment.
- No interest or monthly payments to Ourboro; it's an investment in the home's future value.
- Ourboro covers their share of the land transfer tax, reducing closing costs.

Regional Municipal Programs: Many regional municipalities also offer their own down payment assistance programs, which aren’t widely advertised. I always recommend contacting your region to explore potential programs and to inquire about their scope and eligibility criteria.

2. 30-Year Amortizations

Starting August 1, 2024, first-time homebuyers purchasing a new build can opt for a 30-year amortization period on insured mortgages.

Benefits Include:

- Lower monthly mortgage payments by extending the mortgage payback period from 25 to 30 years.
- Qualifying for a higher mortgage amount, opening a broader range of housing options.
- Improved cash flow, allowing for more money to be allocated to retirement savings, home improvements, etc.

3. Flexible Lenders

Beyond the “Big 6” banks, there are a number of lenders who provide more flexible qualifications for mortgages.

TDS/GDS ratios: Understanding TDS (Total Debt Service) and GDS (Gross Debt Service) ratios is crucial. TDS includes all monthly debt payments and divides this number by the buyer’s gross monthly income. GDS specifically covers housing-related costs divided by gross monthly income.

Lenders set limits on how high these ratios can be to determine one’s qualification for a mortgage. While the traditional banks set lower limits, other lenders like Equitable Bank, sometimes allow for higher TDS/GDS ratios (e.g., 60/60).

Benefits Include:

- Qualifying for a higher mortgage amount.
- Increased buying power, enabling the purchase of more expensive properties.
- Potential for quicker qualification and fewer financial hurdles.

Income Qualification: Some lenders will also consider non-traditional income (such as bonuses, part-time or seasonal employment, self employment with a shorter track record) to help boost the amount of income shown on the mortgage application.

Bringing It All Together

While there are serious points to consider with each of these “homebuyer hacks”, by understanding and utilizing these resources, you can navigate the financial landscape more confidently and accelerate your path to owning a home.

- Start by exploring down payment assistance programs like Ourboro.com and local municipal offerings if you need to bridge the down payment gap.
- Evaluate the benefits of a 30-year amortization period to manage initial affordability versus long-term interest costs.
- Investigate lenders offering higher TDS/GDS ratios to maximize borrowing capacity and property choices.

As the world of mortgage financing becomes more diverse, it’s best to stay informed of all available options. If you have any questions, are looking into buying a home yourself or know anyone that is considering it, don’t hesitate to reach out to me at the e-mail address below. I’m happy to answer any questions or look into any homebuyer scenarios.

Thanks for reading!

[email protected]

06/25/2024

https://www.youtube.com/watch?v=J-x0KKHXlB0

BNN interview with Royal LePage CEO, Phil Soper and his take on the current housing market. It's an interesting watch.

June's data should be very telling of where sales and pricing are headed. In the meantime:

• The Canadian housing market has experienced weaker sales and prices in May.

• While there's been evidence of an uptick in housing activity in June, the Bank of Canada's recent interest rate cut has not led to a significant surge.

• Toronto and Vancouver, which are Canada's most expensive housing markets, are experiencing the slowest growth, while other cities like Calgary, Montreal, and Halifax are seeing increases in prices and sales volume.

• The condominium market and the market for detached homes are experiencing different trends, with multiple offers still occurring for detached homes even in Toronto.

• The recent decline in home prices, which have been flat or slightly declining for two years, has given the market time to catch up after the rapid rise during the pandemic.

Phil Soper, president and CEO at Royal LePage, joins BNN Bloomberg to discuss trends in home sales activities.Subscribe to BNN Bloomberg to watch more videos...

06/21/2024

A Mortgage Agent: Your Guide to Home Financing

As a licensed mortgage agent in Ontario, I serve as an intermediary between you, the borrower, and various lenders. My role is to help you navigate the complex world of mortgage financing and find the best loan options suited to your unique financial situation.

Here's what I do for you:

1. Access multiple lenders: I have relationships with various lending institutions, giving you access to a wide range of mortgage products and rates.

2. Simplify the process: I gather and evaluate your financial information, submit applications, and keep you updated throughout the mortgage process.

3. Provide expert guidance: I'll explain different mortgage options, terms, and regulations to help you make informed decisions.

4. Save you time and money: By comparing multiple lenders, I can help you find competitive rates and potentially save you money over the life of your loan.

5. Offer personalized service: I work to understand your specific needs and goals to recommend the most suitable mortgage solutions.

6. Ensure compliance: As a licensed professional, I adhere to strict regulatory standards set by the Financial Services Regulatory Authority of Ontario (FSRA).

7. Act in your best interest: My goal is to secure a mortgage that aligns with your financial objectives and long-term plans.

Working with a mortgage agent can simplify your home buying or refinancing journey. I'm here to answer your questions and guide you through every step of the process.