Mortgage Depot - Brenda Joynson

09/05/2024

Bank of Canada Cuts Policy Rate by 25 Basis Points to 4.25%
VANCOUVER (September 4, 2024) - The Canadian Mortgage Brokers Association - British Columbia (CMBA-BC) welcomes today’s announcement by the Governor of the Bank of Canada Tiff Macklem that the Bank of Canada cut its key overnight rate from 4.5 per cent to 4.25 per cent. This decision follows rate cuts in July and June of 25 basis points each, with the central bank signalling further rate reductions this year and into 2025.

CMBA-BC is strongly encouraged by today’s decision, viewing it as a positive step towards alleviating financial pressure on mortgage holders, borrowers, and first-time homebuyers across British Columbia. Although fixed mortgage rates may not see immediate changes, the drop in the key rate will benefit Variable Rate Mortgages and Home Equity Lines of Credit due to the decrease in the prime lending rate. Perhaps most significantly, reduced rates will also benefit homeowners that are due for a mortgage renewal.

"Mortgage holders and borrowers across the province are in need of significant relief,” said Rebecca Casey, President of the CMBA-BC. "We are optimistic that today’s announcement will further ease the financial burden on homeowners and homebuyers, while also providing support for first-time buyers.”

CMBA-BC has consistently advocated for relief measures for mortgage holders and homebuyers in British Columbia, including the reduction of interest rates. Continued rate cuts have the potential to offer substantial relief to residents grappling with the effects of inflation.

Recent economic indicators show many positive trends, including inflation in decline. Statistics Canada reported a 2.5 per cent increase in the Consumer Price Index (CPI) for July, down from 2.7 per cent in June. Additionally, the Canada Federation of Independent Business’ forecasts suggest the Canadian economy grew by 2 per cent in Q2 on the heels of a 1.7 percent growth in Q1. Despite these improvements, the housing market in British Columbia remains under strain.

A recent survey by the Angus Reid Institute highlighted that unaffordable housing is driving potential homebuyers out of the province. This is consistent with data from BC Stats, which shows that the cost of homeownership increased by 7.2 per cent and rental costs rose by 7.1 per cent last quarter. Inflation in BC also remains higher than the national average, placing second among the provinces only behind New Brunswick.

"In order to support first-time buyers and foster a healthier mortgage market in B.C., a continued commitment to economic relief is crucial,” added Casey. “Today’s announcement is another positive step towards strengthening the housing market and providing greater stability for consumers.”

The CMBA-BC remains steadfast in supporting home buyers and mortgage holders, and to facilitating a stable and prosperous housing market in British Columbia.

07/06/2023

The Ins And Outs of Refinancing Your Mortgage.

Mortgage refinancing is a financial strategy that allows homeowners in Canada to adjust their existing mortgage terms to better suit their needs.
Understanding the ins and outs of mortgage refinancing is essential for homeowners looking to improve their financial situation or take advantage of new opportunities. Let’s explore the process, benefits, considerations, and eligibility criteria associated with mortgage refinancing in Canada.

I.What is Mortgage Refinancing?

Mortgage refinancing refers to the process of replacing your current mortgage with a new one, often with different terms and conditions. This can be done with your existing lender or by switching to a new lender. Homeowners choose to refinance their mortgage for various reasons, including lowering monthly payments, accessing home equity, securing a better interest rate, or changing the mortgage type (from variable to fixed-rate or vice versa).

II. Benefits of Mortgage Refinancing:

Lowering monthly mortgage payments: Refinancing can help reduce your monthly mortgage payments by obtaining a lower interest rate or extending the loan term. Accessing home equity: Refinancing allows homeowners to tap into their home equity for purposes such as home improvements, debt consolidation, or funding other investments. Securing a lower interest rate: If interest rates have dropped since you initially obtained your mortgage, refinancing can help you lock in a more favorable rate. Switching mortgage types: Refinancing provides an opportunity to change from a variable-rate mortgage to a fixed-rate mortgage or vice versa, based on your financial goals and market conditions.

III. The Process of Mortgage Refinancing:

The mortgage refinancing process involves several steps:

Assessing financial goals and needs: Determine your objectives and evaluate how refinancing aligns with your long-term financial plans. Evaluating current mortgage terms and conditions: Review your existing mortgage details, including interest rate, loan term, and penalties for early repayment.

Researching and comparing mortgage lenders and offers: Shop around for different lenders and compare their terms, rates, and fees to find the best refinancing option for your situation.

Gathering required documentation: Prepare the necessary documents, such as income verification, credit history, and property appraisal.

Submitting the mortgage refinance application: Complete the application process, providing all the required information and documentation.

Appraisal and property evaluation: A new appraisal may be required to assess the current value of your property.

Approval and closing the new mortgage: Once approved, review the terms and conditions of the new mortgage and close the refinancing transaction.

Paying off the existing mortgage: The proceeds from the new mortgage are used to pay off the remaining balance of the original mortgage.

IV. Considerations and Potential Costs:

Before proceeding with mortgage refinancing, it's important to consider the following factors:

Applicable penalties and fees: Be aware of any penalties or fees associated with early mortgage repayment and refinancing.

Long-term financial implications: Evaluate the long-term financial impact of refinancing, including the total cost of the new mortgage and its alignment with your financial goals.

Common costs associated with mortgage refinancing include appraisal fees, legal fees, and discharge fees for your current mortgage.

V. Eligibility and Qualifications:

To qualify for mortgage refinancing in Canada, lenders consider factors such as credit history, income stability, property value, and loan-to-value ratio. It's important to meet the lender's eligibility criteria and provide the necessary documentation to support your application. If you face challenges in meeting traditional criteria, alternative options may be available through alternative lenders or specialized mortgage programs.

VI. Working with a Mortgage Professional:

Seeking guidance from a mortgage broker can greatly assist you throughout the mortgage refinancing process. They will provide expert advice, help you navigate the various options available, and negotiate on your behalf to secure the best possible terms and rates.

Mortgage refinancing can be a powerful financial tool for homeowners in Canada. By understanding the process, benefits, considerations, and eligibility criteria, you can make informed decisions and take advantage of the opportunities refinancing offers. However, it's crucial to carefully evaluate your financial goals, assess the costs involved, and work with professionals who can guide you through the process.

With the right strategy and proper planning, mortgage refinancing can help you achieve your financial objectives and improve your overall financial well-being.

06/06/2023

The Difference Between A Banker And A Broker

While we have likely already done business together, and you understand the difference between a banker and a broker, it might beworth a quick refresh, in case you have a friend or family member who could use this information! Feel free to pass this on.
What's The Difference?
The difference between a banker and a broker comes down to the products each can offer, and where their allegiances lie.

A banker is paid by the bank, to make the bank money at your expense, while a mortgage broker is paid by the lender to get you the best mortgage available, which is to your benefit.

Mortgage Brokers
A mortgage broker has access to multiple lenders and shops around to get their clients the best mortgage product available.
Working with a mortgage broker provides you with options right across the board. Instead of having to go in and fight the bank for a deal, your mortgage broker does all the leg work and outlines your options at several lenders. As the lender pays the mortgage broker upon closing, there is no cost to you.
Bankers
A banker works for a single financial institution, and can only offer mortgage products from that institution.
As banks can only offer you their rates and products, they are very limited in how they can help you. They never offer you the best deal to start with, however, will eventually negotiate on terms and rates, but you will be responsible for doing the negotiations on your own.
Renewal Time?
If you have a mortgage up for renewal, or you would like to refinance, it is always in your best interest to contact your mortgage broker instead of dealing with the lender who currently holds your mortgage. Just because they were the best option previously, that doesn't mean they will be the best option in the future.

03/23/2022

Helpful information!

Mortgage affordability provides an estimate of how much money you can afford to borrow for a home, based on your income, expenses and debts.

01/26/2022

The Bank of Canada announced this morning that they are holding the overnight lending rate.

With inflation worsening and affecting the supply chains, we are likely to start to see increases as early as March 2022. Tiff Macklem, the Bank of Canada Governor said, "The challenge here is to bring inflation back to target without choking off the recovery."

If you have any questions about what this means to you and your financing situation, reach out to your Mortgage Broker.

Click below to read the full press release:
https://www.bankofcanada.ca/2022/01/fad-press-release-2022-01-26/

04/02/2020

Understanding the Current Marketplace . .

Let me begin with my heartfelt hope that this letter finds you and your loved ones in good health. I wanted to reach out with some words of reassurance. In short…I’m here. We are in uncharted territory, and the mortgage marketplace is continually shifting to keep pace with economic realities and the needs of Canadian homeowners. Several announcements have been released in quick succession: by the government, lenders, and mortgage insurers. Here is a quick summary of some of the most common questions to help you make sense of it all. I encourage you to give me a call at any time if you have questions about your own situation.

Q Mortgage payment deferrals have been announced. What does it mean and how do I access that?

A Mortgage insurers – Canada Mortgage and Housing Corp (CMHC), Genworth, and Canada Guaranty – have joined with lenders to announce that eligible clients can delay mortgage payments. These are “compassionate” programs for homeowners who are in serious financial straits and are unable to make their mortgage payments for a period of time. You will need to apply to the program, and assistance will be determined on a case-by-case basis – so please do not just start skipping payments. If you urgently need this kind of help, get in touch, and I can help you find the right channels to apply. Lenders have been swamped with calls, so you may need some patience to get through this process. But we can also talk about financing options that might help you at this time.

Q The Bank of Canada has lowered interest rates a few times. Won’t that help me with my variable mortgage or line of credit?

A Yes, any lowering of the Bank of Canada rate will likely mean that your interest rate will also drop. Keep in mind that it usually doesn’t happen instantly, and your own rate won’t necessarily move in lock-step with the Bank of Canada rate. Ultimately, it’s the lender’s decision on whether – and how much of – the rate cut will be passed along to the end consumer. Lenders are naturally concerned about liquidity and the potential for an increase in mortgage defaults.

Q So if the rates have dropped so low, should I lock in my variable mortgage? Or trade for a low fixed rate?

A I can go over the pros and cons with you. There is no simple answer.

Q What about my fixed-rate mortgage?

A If you’ve got a fixed-rate mortgage, then nothing changes for you right now. The rate you negotiated is guaranteed for the entire term of your mortgage. However, if your fixed rate is a lot higher than the current rates available, then it is still worth calling to see if it makes sense to re-negotiate your mortgage to take advantage of today’s rates. I can do a cost/benefit analysis to see if the switch can save you money.

Q I have some credit-card and/or loan debt that now has me worried.

A If you’re carrying high-interest credit card debt, and you have more than 20% equity in your home, it can make sense to roll those other debts into a new mortgage. You get one manageable payment, better cash flow, and interest savings.

We are all navigating turbulent waters and many things are changing. The most important advice I can give you is to get in touch early if you’re anticipating any challenges. Right now we all need to take things as calmly as we can, evaluate our priorities, and make decisions that are needed for the long term.

Have mortgage questions? I'm here to help you!

Please feel free to contact me with any questions you may have. It would be a pleasure to assist you or any one of your friends or family members!

03/04/2020

Bank of Canada lowers overnight rate target to 1 ¼ percent
The Bank of Canada today lowered its target for the overnight rate by 50 basis points to 1 ¼ percent. The Bank Rate is correspondingly 1 ½ percent and the deposit rate is 1 percent.

While Canada’s economy has been operating close to potential with inflation on target, the COVID-19 virus is a material negative shock to the Canadian and global outlooks, and monetary and fiscal authorities are responding.

Before the outbreak, the global economy was showing signs of stabilizing, as the Bank had projected in its January Monetary Policy Report (MPR). However, COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply and supply chains have been disrupted. This has pulled down commodity prices and the Canadian dollar has depreciated. Global markets are reacting to the spread of the virus by repricing risk across a broad set of assets, making financial conditions less accommodative. It is likely that as the virus spreads, business and consumer confidence will deteriorate, further depressing activity.

In Canada, GDP growth slowed to 0.3 percent during the fourth quarter of 2019, in line with the Bank’s forecast, although its composition was different. Consumption was stronger than expected, supported by healthy labour income growth. Residential investment continued to grow, albeit at a more moderate pace than earlier in the year. Meanwhile, both business investment and exports weakened.

It is becoming clear that the first quarter of 2020 will be weaker than the Bank had expected. The drop in Canada’s terms of trade, if sustained, will weigh on income growth. Meanwhile, business investment does not appear to be recovering as was expected following positive trade policy developments. In addition, rail line blockades, strikes by Ontario teachers, and winter storms in some regions are dampening economic activity in the first quarter.

CPI inflation in January was stronger than expected, due to temporary factors. Core measures of inflation all remain around 2 percent, consistent with an economy that has been operating close to potential.

In light of all these developments, the outlook is clearly weaker now than it was in January. As the situation evolves, Governing Council stands ready to adjust monetary policy further if required to support economic growth and keep inflation on target. While markets continue to function well, the Bank will continue to ensure that the Canadian financial system has sufficient liquidity.

The Bank continues to closely monitor economic and financial conditions, in coordination with other G7 central banks and fiscal authorities.

Information note

The next scheduled date for announcing the overnight rate target is April 15, 2020. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR at the same time.

02/03/2020

And this good advice doesn’t cost you a nickel, says Saanich mortgage broker

07/19/2019

The Bank of Canada has lowered the rate used by mortgage stress tests to determine whether would-be homeowners can qualify, marking the first drop in three years.

The central bank's five-year benchmark qualifying rate is now 5.19 per cent, down from 5.34 per cent.

It's the first decrease in the five-year fixed mortgage rate since September 2016, when it dropped from 4.74 per cent to 4.64 per cent, and increased steadily since.

The qualifying rate is used in stress tests for both insured and uninsured mortgages, and a lower rate means it is easier for borrowers to qualify.