Westworth Financial, 201-15315 66 Avenue, Surrey, BC (2026)

03/30/2023

One of the most common sentiments we hear from clients lately is that they want to wait for rates to come back down before they purchase their home.

We understand - after an entire year of rate hikes and constant doom and gloom about the housing market and our economy at large, the financial trepidation is very real.

And of course, we are never going to tell anyone that there is a “right” time to buy a house, as it is so different for each person.

But what we can tell you (or in this case, show you with some numbers) is that rates being slightly higher than they were last year shouldn’t be the only thing holding you back from buying.

To illustrate what I mean, I did some mortgage math based on someone who purchased in 2020, when 5-year fixed rates were in the low 3% range and someone purchasing today in the mid-to-high 4% range.

Take a look, and especially focus on the monthly payments and the balance left owing after the 5-year term. What you see might surprise you!

03/28/2023

The past several weeks have been a bit of a roller coaster in the fixed rate space...

An annoying juxtaposition to the relative quiet we’ve been experiencing on the variable front since the last BoC overnight rate hike.

When the overnight rate increased for an 8th consecutive time in January and fear of a recession ramped up, the increased demand for 5-year bonds pushed the yield down and took variable rates with it.

As recently as mid-February, we were actually seeing several basis point decreases to fixed rates.

But now, with strong economic indicators and fears of a recession easing, investors are actually selling off the bonds they snapped up, which is increasing the yield and, as we have learned, will likely pull fixed rates back up in response.

So what is a homeowner to do?

For starters, remember that high bond yields are actually a positive indicator that our economy remains relatively stable.

Then, take a look at your longer-term plan. Rather than choosing what feels like the best option today, consider the trajectory of what we are expecting in the years ahead as well as what your plans are for your home. Do you plan to stay for the long term? Can you absorb some added costs to ride out a variable rate?

If you’re unsure of what the best course of action is for your mortgage right now, reach out. We are here and ready to help you make the most informed decision possible!

03/24/2023

Historically, most mortgage holders tend to take a 5-year term. And doesn't it go by fast?

When your term end is on the horizon, it means you’ve got some decisions to make. Are you going to stay with your current lender? Are you going to restructure? Are you going to refinance to access some equity?

If you secured a fixed rate 5 years ago then you are without question going to face renewal options with rates much higher than your current rate. Not great news, of course. But what impact does it have on your actual payment?

Let’s break it down:

Say you took a $500,000 mortgage 5 years ago at 2.99% with payments of $1,891/month amortized over 25 years. Over those 5 years you paid down the principal with your regular mortgage payments and your property has appreciated (probably quite significantly!).

Feels good, right?!

If you simply renew at the current rates, keeping on track with your amortization, your new payment is likely going to be in the realm of $2,340/month - an increase of $449/month. For most of us, this is going to sting.

But are we capable of shelling out the extra funds? Probably. Do we like it? Certainly not.

But remember - when you get that renewal offer letter from your current lender, you don’t have to simply sign on the dotted line. In fact, we recommend that you don’t.

Instead, reach out to us to understand ALL your options and we can help you make the best decision for you!

03/24/2023

A home equity line of credit (or HELOC) is a tool that homeowners can use for a multitude of things.

For some, it’s a flexible safety net should an emergency pop up. For others, it’s funds for home improvements. And for investment-savvy folks, it’s used as capital.

Using your HELOC to invest can be seen as a risky move, especially if you go in blind, but can also offer up some very appealing benefits if done wisely with eyes wide open.

It’s not as outlandish as you might think.

So where might one consider investing their HELOC funds?

Perhaps dividend-paying ETFs, investment properties or stocks. We know that any money borrowed from your HELOC requires interest-only payments so when you’re evaluating investment options, you can gauge your return on investment.

A nice perk - the interest that you’ve paid on your HELOC funds to earn investment income is tax deductible.

A detail to note - you wouldn’t be eligible for that deduction if you invested the funds in a tax-sheltered account (think RRSPs, TFSAs, etc).

Before jumping into this strategy, it’s important to connect with a tax professional and review your financial situation to be confident this is right for you!

03/20/2023

As property values in Canada have come down, there has been a growing interest in purchasing investment properties.

Despite higher rates, lower sticker prices are opening doors to investment for Canadians that may not have had the means to start building their wealth this way before. And with that, there has been increasing discussion around a topic that’s been popular among investors for some time now...

is it better to invest in RESPs for our kids’ education, or would we be better off investing that money in real estate and using the proceeds from those investments to fund our kids’ dreams?

This question, like most in our world, doesn’t have a straightforward answer.

As with every strategy we discuss around here, the viability of real estate investing for your kids depends completely on your personal situation.

But there are a few pros and cons to keep in mind.

Check out some of the highlights in real estate over RESPs as well as some of the drawbacks. If you’ve got some cash on hand and have been considering how best to invest for your kids, then we should chat.

03/16/2023

Allow me to set the scene...

It’s the beginning of the new year, your mortgage renewal is on the horizon and you’re sweating with anticipation because you don’t know what your options are and all you hear are horror stories about homeowners being forced to sell their homes rather than renew in this higher rate environment.

Sound familiar?

When your mortgage term is up, there are plenty of options for you outside of simply locking in for another 5 years.

Let’s ease some worry and talk about what you can do when this time comes!

03/14/2023

You've probably been hearing more about the Canadian bond market than every before. And perhaps you're feeling like you'd like to better understand this hot topic. And you're not alone.

With the changing tides of the Canadian mortgage market (plus, you know, the entire global economy), homeowners have been putting extra effort into understanding why their mortgage interest rates are what they are, where they come from and how they can start to see a broader picture of what their monthly expenditures will look like.

Which is why you hear so much talk these days about the Canadian Government Bond Market - or, more specifically, why the 5-Year Bond Yield keeps making headlines.

As a reminder - unlike variable mortgage rates which are directly affected by the Bank of Canada overnight rate, fixed rates are more directly correlated with government bond yields.

Let's learn more about the bond market, what it is and how it affects the mortgage bill you pay every month.

03/10/2023

Since the Office of the Superintendent of Financial Institutions (OSFI) announced in January that it would put forth some potential changes to mortgage qualification restrictions, there has been a flurry of panic and misinformation about what exactly these changes mean.

First, it’s important to note that contrary to what you may have heard, these changes have not actually taken effect just yet - and they may not.

Currently, these changes are in their consultation period which ends on April 14th. Until then, the regulator will be collecting and reviewing stakeholder input to discern the best path forward.

In the meantime, take a look through to get a better understanding of what each of the proposed changes is and how they could affect you.

03/08/2023

Happy International Women's Day!

It's hard to imagine that there was a time in history when women weren't legally allowed to own property on their own. Fast forward to today and women are making their mark in a traditionally male-dominated industry from both a buyer and business standpoint. From real estate agents, mortgage agents, investors and home ownership - the proportion of women taking action and exceeding societal expectations is increasing every year. Irrespective of being married or single, women are breaking the glass ceiling in the world of real estate. They are owning more homes, earning more money, and taking up more space.

Let's look at some stats that we can all be really proud of:

- Single women are outpacing their male counterparts purchasing homes at twice the rate
- 61% of first time and repeat home buyers were female.
- 60% of real estate agents are female, many of them running their own brokerages and teams

Today (and everyday) let's celebrate the queens in our lives. The ones we look up to. The ones we lean on. The ones that are inspiring us and paving pathways for the generations to come.

The future is female!

03/08/2023

The Bank of Canada has given us a gift this morning...

In a move that we all hoped for but maybe didn’t fully expect, the Bank of Canada announced this morning that it would make good on it’s January suggestion that it would tentatively pause rates after that increase, and keep the overnight rate at 4.5% for at least a while longer.

Given the most recent data that the housing market is slowing down considerably, consumer spending is taking a beat and inflation is slowing even more swiftly than many economists expected, the BoC seems satisfied that its 425 basis point increase over the past year is beginning to take effect. Those same increases, on the other hand, have had a hand in mortgage interest costs becoming one of the biggest contributors to CPI growth in January. So this pause is very much warranted.

However, with a long way still to go to the BoC’s target inflation rate of 2%, we definitely can’t rule out further increases in the coming months. As we round out the end of Q1 of 2023, the Bank will be looking for virtually no economic growth, and seeing any upward growth will likely bring on more hikes.

What does this mean for us for right now? Well the great news is that if you are a variable rate holder, this will be the first announcement in nearly a year that won’t mean an increase to your monthly payment. And for the rest of us? Some relative calm and warmer temperatures could mean that we’ll see more movement in the housing market in the coming weeks. A steady overnight rate coupled with expected increases to fixed rates in response to the 5 year bond yield increasing could mean more buyers rush onto the scene.

But all in all, let’s call today’s announcement a win!

03/03/2023

I bet you never thought you would be so keenly aware of the government bond market (or even know what it is at all), right?

But with the changing tides of the Canadian mortgage market (plus, you know, the entire global economy), homeowners have been putting extra effort into understanding why their mortgage interest rates are what they are, where they come from and how they can start to see a broader picture of what their monthly expenditures will look like.

Which is why you hear so much talk these days about the Canadian Government Bond Market - or, more specifically, why the 5-Year Bond Yield keeps making headlines.

As a reminder - unlike variable mortgage rates which are directly affected by the Bank of Canada overnight rate, fixed rates are more directly correlated with government bond yields.

But what are bond yields exactly, you ask? Or, what is a bond even? I’m so glad you asked!

Learn more about the bond market, what it is and how it affects the mortgage bill you pay every month.

Westworth Financial

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