Lyon MTG Blog

Mortgage Renewal vs. Refinance: Understanding the Key Differences

Wed, 28 Jan 2026 17:48:28 GMT

If you own a property with a mortgage, you've probably heard the terms "renewal" and "refinance" thrown around. While both involve obtaining a new term for your mortgage, there are some important differences to understand. Let's break down what each one means and when you might use them.

Understanding Mortgage Basics

In Canada, when you take out a mortgage, the payments are typically spread over 25 to 30 years. This period is known as the amortization. However, unlike in the U.S., Canadians do not keep the same interest rate and payment terms for the entire amortization period. Instead, you have an initial term, usually 3 to 5 years, after which you need to renew into a new term.

For example, if you have a 25-year mortgage with 5-year terms, you will need to renew your mortgage four times throughout its lifespan. It's also common to have a mix of different term lengths over the course of your mortgage.

What is a Mortgage Renewal?

A mortgage renewal occurs at the end of your mortgage term. When you renew, you start a new term with a new interest rate while keeping the remaining details of your mortgage the same. The key element here is that the mortgage charge registered on your property's title remains unchanged.

A renewal is straightforward and typically does not involve any significant changes to your mortgage agreement other than a new interest rate. Think of it as hitting the "continue" button on your mortgage, but at new rates.

What is a Mortgage Refinance?

A mortgage refinance is different. When you refinance, you are making changes to your original mortgage agreement. This means paying off your existing mortgage and registering a new one on your property's title. Essentially, you are taking out a completely new mortgage for the same property.

People commonly refinance to:

Access the equity in their home for investments or major purchases
Consolidate high-interest debt into their lower-rate mortgage
Extend the amortization period to reduce monthly payments and improve cash flow
Make significant changes to their mortgage structure

It's important to note that refinancing is not allowed for insured properties (those with less than a 20% down payment at purchase). This means the maximum loan amount in a refinance is 80% of your property value.

What About Switching Lenders?

If you want to keep everything the same but switch lenders for a better rate, this is known as a transfer. A transfer is a type of renewal where the original mortgage charge is transferred from one lender to another.

Depending on the lenders involved, you might be able to make minor changes (like extending the amortization or changing borrowers) without needing a full refinance.

Why Timing Matters

Your mortgage maturity date is when your current term ends. This is the ideal time to either renew or refinance. If you refinance or switch lenders before the maturity date, you will face a prepayment penalty. If you refinance, renew or transfer at maturity, there is no penalty.

Real-World Example

A homeowner with a $450,000 mortgage is reaching the end of their 5-year term. Their lender offers a renewal rate, but they also have $40,000 in high-interest credit card debt.

Option 1: Renewal
They accept the new term. Their mortgage stays the same. Their debt remains separate at high interest rates.

Option 2: Refinance at Maturity
They consolidate the credit card debt into the new mortgage. Their total monthly payments drop significantly, even after accounting for the new mortgage balance.

In this situation, refinancing provides better cash flow and a simpler payment structure.

Quick Summary

Mortgage Renewal:

Starts a new term for your existing mortgage
Mortgage charge on your title stays the same
Keeps all other terms the same aside from interest rate
Can switch lenders at renewal through a transfer
No penalty when done at maturity

Mortgage Refinance:

Pays off current mortgage and creates a new one
New mortgage charge registered on your title
Often resets the amortization period
Can access equity or make structural changes
Maximum 80% of property value for uninsured mortgages
Incurs penalty if done before maturity

Next Steps

Understanding the difference between renewal and refinance helps you make informed decisions about managing your mortgage. If you have a renewal coming up or are considering accessing your home equity, now is a good time to explore your options.

Whether you're looking to renew, refinance, or switch lenders, I'm here to help you navigate the process and find the best solution for your situation.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Glossary

Amortization: The total time period over which you'll pay off your mortgage, typically 25-30 years in Canada.

Insured Mortgage: A mortgage where the down payment was less than 20%, requiring mortgage default insurance to be added.

Maturity Date: The end date of your current mortgage term, when you need to renew or refinance.

Mortgage Charge: The legal registration of your mortgage on your property's title.

Pre-payment Penalty: A fee charged by your lender if you pay off your mortgage before the end of your term.

Refinance: Replacing your existing mortgage with a new mortgage, often with different terms or to access equity.

Renewal: Starting a new term for your existing mortgage, typically just updating the interest rate.

Term: The length of time your current mortgage contract is in effect, typically 3-5 years in Canada.

Transfer: Moving your mortgage from one lender to another at renewal without changing other terms.

25 Year vs 30 Year Amortization: A Practical Guide

Sun, 25 Jan 2026 17:15:00 GMT

When you take on a new mortgage, you are not just choosing a rate and a lender. You are also choosing how long you plan to pay that mortgage back over time, which is called your amortization period.

For most new mortgages in Canada, the standard options are 25 years or 30 years. Some alternative lenders will go higher than 30 years and some clients choose less than 25, but the vast majority start with one of those two choices.

On paper, the difference between 25 and 30 years might look small. In reality, it affects:

How much your monthly payment is
How much total interest you pay
How quickly you become mortgage free
How much you can qualify for

In this blog, I will walk through the trade offs in plain language, give you a simple example with real numbers, and share a framework I use with clients to decide what makes the most sense.

What is an amortization period?

Your amortization period is the total length of time you spread your mortgage over.

A 25 year amortization means your payments are set up so that, if you keep that schedule the whole way through, your mortgage would be fully paid off in 25 years.
A 30 year amortization stretches those payments over 30 years instead.

You will renew your mortgage several times during that period, and your rate will almost certainly change, but the amortization is the overall timeline you are working with unless you make changes.

25 years vs 30 years: the basicS

In general:

Longer amortization (30 years)
Lower required monthly payments
More total interest paid over the life of the mortgage
Shorter amortization (25 years)
Higher required monthly payments
Less total interest paid
You become mortgage free sooner

That is the key trade off: monthly payment today vs total cost and debt timeline over the long term .

example: $500,000 mortgage

Let's look at a simple example.

Mortgage amount: $500,000
Interest rate: 4.50%
Amortization: 25 years vs 30 years

Approximate results

25 year amortization

Monthly payment: $2,767.36
Total interest over 25 years: $330,209.43

30 year amortization

Monthly payment: $2,521.08
Total interest over 30 years: $407,588.00

Important note: This assumes the interest rate stays the same for the entire amortization, which is very unlikely in real life because you would renew several times. It does, however, give a clean apples to apples comparison.

In this example:

Summary

The 25 year mortgage payment is $246.28 higher per month , which is about 9 percent higher .
Over the life of the mortgage, the 30 year option costs about $77,378 more in interest , which is roughly 23 percent more interest than the 25 year option.

So you save about $246 per month today with the 30 year, but pay over $77,000 more in interest if you follow that schedule all the way through.

How amortization affects how much you qualify for

One of the main reasons people choose a 30 year amortization is purchasing power .

Your maximum mortgage amount is based on how much of your monthly income can go toward your mortgage payment. If you stretch the payments over 30 years, the required monthly payment is lower for the same mortgage size, which means you may qualify for a larger mortgage at the same monthly payment limit.

Using the same rate as above and assuming the maximum payment you can afford is $2,500 per month :

With a 25 year amortization , you might qualify for roughly $450,000 of mortgage
With a 30 year amortization , you might qualify for roughly $495,000 of mortgage

Exact numbers will depend on the rate, your income, other debts, and the specific lender, but the idea is the same:

A 30 year amortization can increase your maximum purchase price because it lowers the required payment for a given mortgage amount.

So which should you choose?

Assuming you can qualify with either a 25 year or a 30 year amortization, here is a simple way to think about it.

Choose 25 years if:

You want the mortgage paid off sooner
You want to minimize the total interest you pay
You are comfortable with a higher required monthly payment

Choose 30 years if:

You prefer a lower required monthly payment
You want more room in your monthly budget or more flexibility
You are okay keeping the mortgage for longer and paying more interest overall

There is no one size fits all answer. It comes down to cash flow, long term goals, and your comfort level with debt.

My favourite approach: flexibility first, then pay it down

There is one more strategy that I almost always like to discuss with clients.

Most lenders (especially the ones I prefer to work with) allow you to make regular prepayments without penalty, as long as your extra payments stay within their annual limits (usually 15 to 20 percent of the original mortgage amount). These prepayments go directly toward principal and reduce your amortization.

Because of this, a powerful strategy is:

Take the 30 year amortization to get the lowest required monthly payment
Manually “shrink” the amortization by making prepayments when your cash flow allows

Back to our earlier example:

You take the 30 year mortgage with a required payment of $2,521.08 per month
You then make a prepayment of $246.28 per month (the difference between the 30 year and 25 year payment)

You would effectively bring your amortization back down to abo ut 25 years anyw ay.

In other words, yo u get the flexibility of the 30 year payment on paper, but you behave as if you chose 25 years by paying extra.

A twist: invest the difference instead

Some clients prefer a different twist on this:

They take the 30 year amortization
Instead of prepaying the mortgage, they invest the difference

If your investments earn a higher rate of return than your mortgage interest rate, you can potentially come out further ahead over the long run.

This is more of an advanced strategy and it depends on:

Your risk tolerance
Your overall financial plan
Your time horizon

It is not for everyone, and you should get proper financial advice before using this approach. The main idea is that the lower required payment gives you choices.

Benefits of the “30 year plus prepayments” strategy

Here are a few reasons I like this approach.

1. Extra cash flow when you need it most

When you first buy a home, there are always lots of costs: closing costs, moving, furniture, small renovations and so on. Having a lower required payment and the option to pay extra can make those early months less stressful.

2. Helps with qualifying for future properties

If you ever want to buy a rental, a second home, or co sign for someone, your existing mortgage payment will count against you when you qualify.

A 30 year amortization gives you the lowest payment showing on paper , which can make it easier to qualify for that next property, even if you are actually paying more each month through prepayments.

3. You stay in control

You can increase or decrease your prepayments over time based on your income, expenses and goals, instead of being locked into a higher required payment every month.

If your income drops or an unexpected expense comes up, you can simply reduce or pause the extra payments and fall back to the lower required payment.

When a 25 year amortization still makes sense

The main downside to the 30 year plus prepayments strategy is that it relies on your own discipline.

If you know yourself and you are pretty sure you will not make those extra payments or invest the difference, then a 25 year amortization can be a great way to build forced savings.

The higher required payment guarantees that more money goes toward your mortgage every month, whether you are feeling motivated or not.

summary

25 year vs 30 year amortization affects your payment size, total interest cost, and how long you keep the mortgage
A 30 year amortization gives you lower required payments and often higher borrowing power, but more interest over time
A 25 year amortization means higher payments, less interest, and becoming mortgage free sooner
A smart hybrid is to take 30 years on paper, then use prepayments to effectively act like a 25 year amortization
If you are not likely to make extra payments consistently, a 25 year amortization can be a better built in savings plan

Next steps

If you are choosing between 25 and 30 years, the best approach is to:

Look at the actual monthly payments side by side
Think about how much flexibility you want in your budget
Decide whether you are realistically going to make prepayments or invest the difference

If you are not sure which option fits your situation best, feel free to reach out. I am happy to run the numbers with you and help you decide what makes the most sense for your goals.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Glossary

Amortization
The total length of time it will take to fully pay off your mortgage if you follow the scheduled payments.

Amortization period
The specific number of years your mortgage is set to be paid off over, for example, 25 years or 30 years.

Interest
The cost you pay to borrow money from the lender, usually shown as a percentage rate on your mortgage.

Mortgage prepayment
Any extra amount you pay toward your mortgage on top of your regular required payment. This goes directly to principal and can shorten your amortization.

Principal
The amount of money you actually borrowed for your mortgage, not including interest.

Refinancing
Replacing your existing mortgage with a new one, often with a different rate, term, or amount, usually to lower payments, consolidate debt, or access equity.

Required monthly payment
The minimum mortgage payment your lender needs you to make each month to stay in good standing and follow your agreed amortization.

Total interest paid
The sum of all interest charges you will pay to the lender over the entire life of your mortgage if you follow the scheduled payments.

How Rental Income Impacts Your Mortgage Approval (And Why Lender Choice Matters)

Tue, 20 Jan 2026 23:24:00 GMT

If you are buying a home with a suite, keeping your current home as a rental, or already own a rental property, mortgage qualification can get confusing fast. The frustrating part is that you can do everything “right” and still get very different answers depending on which lender you talk to.

Here’s a simple breakdown so you understand it and don’t miss out.

What are Debt Service Ratios?

In Canada, lenders qualify you using two main ratios:

Gross Debt Service (GDS)

This looks at housing costs only , typically:

Mortgage payment
Property taxes
Heating
50% of strata fees (if applicable)

GDS typically needs to be 39% or less of your gross income.

Total Debt Service (TDS)

This includes everything in GDS , plus other debts like:

Car loans
Credit cards
Lines of credit
Student loans

TDS typically needs to be 44% or less of your gross income.

These ratios are the foundation. If they do not work, the lender will not approve the mortgage, even with strong credit and a solid down payment.

How Lenders Treat Rental Income

Most people assume lenders look at rental properties based on simple cash flow (rent minus mortgage payment). In reality, most lenders use one of two methods:

1) Addback

A percentage of the rental income is added to your gross income for qualification purposes.

2)Offset

A percentage of the rental income is subtracted from the mortgage payment tied to the rental property.

Different lenders use different percentages and different worksheets. That is why the same borrower can qualify with one lender and fail with another.

Benefits of Understanding Lender Methods

When you understand how rental income is calculated, you can:

Avoid being under-qualified by a lender with conservative rules
Get a more accurate picture of your real purchasing power
Choose a lender that fits your situation (instead of forcing your situation to fit the lender)

Important Considerations

A few key points to keep in mind:

Rental income is rarely counted at 100% , but some lenders are more generous than others.
The method matters just as much as the percentage (addback vs offset).
If you own multiple properties, lender worksheets can change the result dramatically.
Your lender choice is a strategy decision , not just a rate decision.

Real-World Example: Same Clients, Two Very Different Outcomes

Here’s an example comparing lenders Scotiabank and Strive, using a fictitious couple:

Scenario

Household income: $160,000
Existing townhome: $800,000 value with a $525,000 mortgage ( $2,500/month payment)
Market rent for the townhome: $3,400/month
New purchase: property with a rental suite generating $1,800/month
Down payment: 10%
Other debts: student loan $165/month , car loan $500/month

How Scotiabank viewed it

For the townhome rental, they counted half the rent and subtracted the mortgage payment, leaving an $800/month shortfall that gets added into the debt ratios.
For the new purchase, 50% of the suite income gets added to income.
Max mortgage : $650,700
Max purchase price : $723,000

How Strive viewed it

For the townhome rental, Strive used a rental worksheet and calculated $5.20/month of income that can be added to the application.
For the new purchase, 100% of the suite income gets added to income, and they did not need to include taxes or heat.
Max mortgage : $878,400
Max purchase price : $976,000

The result

That’s a $253,000 difference in purchasing power , with the same clients, same income, same debts, and same properties. The difference was lender policy.

Quick Summary

GDS and TDS ratios are the backbone of mortgage qualification.
Rental income is usually counted using Addback or Offset , and each lender handles this differently.
Two lenders can produce wildly different results, even with the exact same file.
In the example above, lender choice created a $253,000 swing in purchasing power.

Next Steps

If you are planning to:

Buy a home with a suite
Keep your current home and convert it to a rental
Use rental income to qualify

Reach out and I will run the numbers across multiple lenders so you see what you actually qualify for, not just what one lender will allow.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Glossary

Addback : A method where a lender adds a percentage of rental income to your gross income for qualification.
Gross Debt Service (GDS) : The ratio that measures housing costs as a percentage of gross income.
Offset : A method where a lender subtracts a percentage of rental income from the rental property’s mortgage payment for qualification.
Total Debt Service (TDS) : The ratio that measures housing costs plus other debts as a percentage of gross income.

How to Get Pre-Approved for a Mortgage in BC (2026 Guide) | Lyon MTG

Fri, 16 Jan 2026 15:23:37 GMT

If you're planning to buy a home in Burnaby, Vancouver, or anywhere in BC, a mortgage pre-approval is the single most important step you can take before you start searching. It's not just paperwork — it's your roadmap. It tells you exactly how much you can borrow, what your payments will look like, and locks in an interest rate while you shop.

Here's exactly how the pre-approval process works and what you need to get started.

What Is a Mortgage Pre-Approval?

A mortgage pre-approval is a lender's conditional commitment to lend you up to a certain amount at a specific interest rate, based on a review of your financial profile. It's not a guaranteed mortgage approval — that comes later when you have an accepted offer on a specific property — but it's the strongest signal you can get that your financing is in order before you start making offers.

A pre-approval gives you three key things:

A confirmed maximum mortgage amount — based on your actual income, debts, and down payment
A rate hold for 90–130 days — if rates rise while you're shopping, you keep the lower rate
Credibility with sellers and realtors — in Metro Vancouver's competitive market, a pre-approved buyer is taken seriously

What Do Lenders Look At?

Every pre-approval involves a review of three primary factors:

1. Income

Lenders want to confirm you have sufficient, stable income to support the mortgage payments. Employment income, self-employment income, rental income, pension, and investment income may all be considered depending on how they're documented.

2. Credit

Your credit score and credit history tell lenders how reliably you manage debt. Most lenders require a minimum score of 620–680 for insured mortgages. I'll pull your credit as part of the pre-approval process — this is a "hard pull" but has minimal impact on your score.

3. Down Payment

Lenders will verify the source of your down payment. In Canada, the minimum down payment is 5% for homes under $500,000. Lenders want to see 90 days of account history confirming where the funds came from.

The Mortgage Stress Test

Every pre-approval in Canada includes the federal mortgage stress test. This qualifies you at either your contract rate plus 2%, or 5.25% — whichever is higher. In practice, it means you'll qualify for less than the raw math of your income might suggest. I factor this into every pre-approval so there are no surprises.

Documents You'll Need

Employment income: 2 most recent pay stubs + most recent T4 + most recent Notice of Assessment from CRA
Self-employed income: 2 years of T1 General returns + 2 years of NOAs + business registration
Down payment: 90 days of bank statements showing the funds
ID: Government-issued photo ID

How Long Does a Pre-Approval Take?

When you work with me, a pre-approval can typically be completed within 24–72 hours of receiving your documents. I submit to multiple lenders simultaneously, which means you get the best available rate without multiple credit pulls.

Pre-Approval vs Pre-Qualification — What's the Difference?

Pre-qualification is a quick estimate based on information you provide verbally or through an online calculator. No credit pull, no document review. It's a rough idea, not a commitment.
Pre-approval involves a full credit pull, document review, and a lender's conditional commitment. This is what you need before you start making offers on properties.

Online mortgage calculators give you pre-qualification numbers. I give you a real pre-approval.

How Long Is a Pre-Approval Valid?

Most pre-approvals are valid for 90–130 days, depending on the lender. If you haven't found a property in that window, I'll renew it with an updated rate assessment.

Ready to Get Started?

Getting pre-approved costs you nothing and takes less time than you might think. Reach out today and I'll walk you through the process and get your pre-approval underway — usually within a day or two of connecting.

Call me at (778) 988-8409 or book a free consultation online .

Mortgage Stress Test Canada 2026: How It Works and What It Means for You

Thu, 15 Jan 2026 15:27:07 GMT

The mortgage stress test is one of the most commonly misunderstood rules in Canadian real estate. Almost every buyer, refinancer, and renewal shopper in BC runs into it — and many are surprised by how much it affects what they can actually borrow.

Here's a plain-language breakdown of how the stress test works in 2026, who it applies to, and what you can do to maximize your qualifying power.

What Is the Mortgage Stress Test?

The mortgage stress test is a federal rule that requires lenders to qualify you at a higher interest rate than your actual mortgage rate. The purpose is to ensure that if rates rise after you get your mortgage, you could still afford the payments.

You don't pay the stress test rate — it's only used to calculate whether you qualify. Once approved, your mortgage is at your actual contracted rate.

How Is the Stress Test Rate Calculated in 2026?

The qualifying rate is the higher of:

Your actual mortgage rate plus 2% , or
5.25% (the regulatory floor)

For example: if your actual mortgage rate is 4.5%, the stress test rate is 6.5% (4.5% + 2%). With 5-year fixed rates generally in the 4.25–4.75% range today, most borrowers are being qualified at approximately 6.25–6.75%.

Who Does the Stress Test Apply To?

All insured mortgages (less than 20% down payment)
All uninsured mortgages at federally regulated lenders
Mortgage switches and renewals where you're changing lenders
Refinances

The stress test does not apply when you renew with your existing lender — which is one reason I always review the full market at renewal, because switching lenders triggers a re-qualification while staying put does not.

How Much Does the Stress Test Reduce What You Can Borrow?

In practical terms, the stress test typically reduces your maximum mortgage by approximately 20–25% compared to qualifying at your actual contract rate.

Here's a simple example with a household income of $150,000 and no other debts:

Qualifying at 4.5% (actual rate): Approximate maximum mortgage of ~$875,000
Qualifying at 6.5% (stress test rate): Approximate maximum mortgage of ~$700,000

That's a $175,000 difference from the same income — purely because of the stress test.

Can You Qualify for More Despite the Stress Test?

Reduce your existing debts before applying — paying down credit cards or a car loan increases your qualifying ratios
Larger down payment reduces the mortgage amount needed
Add a co-borrower with income to the application
Choose the right lender — some are more flexible with how they calculate income
Extend your amortization — a 30-year amortization reduces the monthly payment used in the stress test calculation

The Bottom Line

The stress test is a permanent feature of the Canadian mortgage landscape in 2026. Understanding exactly how it affects your specific situation is the first step to maximizing what you can do within it.

Book a free consultation and I'll run your numbers, show you exactly what you qualify for, and identify any strategies that could improve your position. Call (778) 988-8409 anytime.

First Time Home Buyer Programs in BC: The Complete 2026 Guide

Mon, 05 Jan 2026 15:34:50 GMT

If you're buying your first home in BC, there are several government programs designed to help you get into the market sooner, save on taxes, and reduce the financial burden of that first purchase. Some of these programs are incredibly valuable — and a lot of first-time buyers don't know they exist or don't use them correctly.

1. First Home Savings Account (FHSA)

The FHSA is the most powerful savings tool available to first-time buyers in Canada right now — and it's still underused.

Contribute up to $8,000 per year , up to a lifetime maximum of $40,000
Contributions are tax-deductible — just like an RRSP
Investment growth inside the account is tax-free
Withdrawals for a qualifying first home purchase are completely tax-free

My advice: Open an FHSA as soon as possible — even if you're not buying for two or three years. Contribution room starts accumulating from the year you open the account.

2. RRSP Home Buyers' Plan (HBP)

Withdraw up to $60,000 from your RRSP (increased from $35,000 in 2024)
If buying with a partner who also qualifies, you can each withdraw $60,000 — $120,000 combined
No tax withheld at withdrawal — the money is treated as a loan from yourself
Repayment begins 2 years after the year of withdrawal, spread over 15 years

You can combine the HBP and FHSA on the same purchase — up to $100,000 per person from these two programs alone.

3. BC Property Transfer Tax (PTT) Exemption

Full exemption on homes valued up to $500,000
Partial exemption on homes valued between $500,001 and $525,000
No exemption for homes over $525,000
Must be a Canadian citizen or permanent resident who has lived in BC for 12 consecutive months
Property must be your principal residence

4. CMHC Insured Mortgages

Purchase with as little as 5% down on homes under $500,000
The insurance premium is typically added directly to your mortgage balance
Insured mortgages often carry slightly lower rates than uninsured mortgages

5. GST/HST New Housing Rebate

If purchasing a newly constructed home, you may qualify for a partial GST rebate — up to $6,300 on homes under $350,000, with a sliding scale up to $450,000.

Putting It All Together

Not every program will apply to every buyer — your income, savings, and target property all affect which tools make the most sense. That's exactly what I work through with every first-time buyer I work with.

Learn more about my first-time home buyer services or book a free consultation today. Call me at (778) 988-8409 .

Mortgage Renewal vs Refinance: Which One Do You Actually Need?

Thu, 01 Jan 2026 15:37:52 GMT

Renewal and refinance are two of the most commonly confused mortgage terms in Canada — and choosing the wrong one, or not understanding your options, can cost you significantly. They sound similar but they're fundamentally different transactions with different implications for your rate, your costs, and your mortgage structure.

What Is a Mortgage Renewal?

A renewal happens at the end of your mortgage term. When your term ends, your mortgage simply needs to be renewed into a new term.

At renewal:

You enter a new term with a new interest rate
Your mortgage balance, amortization, and registered charge on title stay the same
The only thing changing is the rate and term length
You can stay with your current lender or switch to a different one — at no penalty

What Is a Mortgage Refinance?

A refinance replaces your existing mortgage with a new one entirely — paying out the current mortgage and registering a new one on title. A refinance allows you to:

Borrow more than your current mortgage balance (up to 80% of your home's value)
Access home equity as cash — for renovations, investments, or debt consolidation
Change your amortization period
Change the structure of your mortgage significantly

The key difference: a refinance changes the amount of your mortgage. A renewal just changes the rate and term .

The Critical Difference: Penalties

Renewal at maturity: No penalty.

Switching lenders at renewal: No penalty.

Refinancing at maturity: No penalty.

Refinancing before maturity: Penalty applies. For variable mortgages, typically three months' interest. For fixed mortgages, the greater of three months' interest or the Interest Rate Differential (IRD) — which can easily reach $15,000–$25,000 on a typical BC mortgage.

When Should You Renew?

Renewal makes sense when your term is ending and you're happy with your current mortgage balance and structure. The most important thing at renewal: don't just sign your lender's offer . That offer is rarely their best rate. I compare renewal offers against the full market for every renewal client — switching lenders at maturity costs nothing.

When Should You Refinance?

Refinancing makes sense when you want to access your home equity, consolidate high-interest debt, or make significant structural changes. The best time to refinance is at your maturity date — zero penalty, maximum flexibility.

A Real-World Example

You own a home worth $900,000 with a $450,000 remaining mortgage coming up for renewal. You also have $35,000 in credit card debt at 19% interest.

Option 1 — Just Renew: Same $450,000 mortgage. Credit card debt stays separate at 19%.

Option 2 — Refinance at Renewal: Since you're at maturity, no penalty applies. Refinance to $485,000, consolidating the credit card debt at your mortgage rate instead of 19%. Monthly cash flow improves significantly. Still well within the 80% LTV limit.

In this scenario, refinancing at renewal produces a meaningful financial improvement at zero extra cost.

Not Sure Which One Applies to You?

Book a free consultation or call (778) 988-8409 . Whether your mortgage is coming up for renewal or you're thinking about refinancing, I'll give you a straight answer based on your actual numbers.

How Much Does a Mortgage Broker Cost in BC?

Tue, 04 Nov 2025 14:44:49 GMT

It's one of the first questions people ask me when we start talking: How much do you charge?

The short answer, for most situations in BC, is nothing. Zero. My services are free to you.

But I want to explain exactly how that works — because understanding it helps you feel confident that working with me is genuinely in your best interest, not some hidden arrangement where you're paying without knowing it.

How Mortgage Brokers Get Paid in Canada

When I help you secure a mortgage through a traditional or institutional lender — a bank, credit union, or monoline lender — the lender pays me a finder's fee once your mortgage funds. This fee is called a referral commission or origination fee, and it comes out of the lender's side of the transaction, not yours.

The fee is typically calculated as a percentage of the mortgage amount — somewhere in the range of 0.5% to 1.2% depending on the lender and the type of mortgage. You don't pay this, the lender does, and your mortgage rate is not affected by it.

This model has existed in Canada for decades. Lenders pay brokers because brokers bring them qualified borrowers — it's cheaper for lenders to pay a referral fee than to run the full marketing and sales operation themselves. You benefit by getting access to expert advice and multiple lender options at no direct cost.

When Does a Broker Fee Apply?

There are situations where a broker fee may be charged directly to the borrower. I'll always tell you upfront if this applies — before we proceed with anything.

This most commonly occurs when:

Private lending is required — Private lenders don't pay the same commissions as institutional lenders. When arranging private mortgage financing, a lender fee and a broker fee are typically charged to the borrower. These are disclosed clearly and rolled into the mortgage or paid on closing.
Alternative lending with a fee-based lender — Some alternative lenders have fee structures that result in a borrower-side cost. I'll walk you through the full cost picture before you commit.
Highly complex files requiring significant time investment — For extremely complex files that fall outside standard lending channels entirely, a consulting fee may apply. I'll discuss this with you before we start.

For the vast majority of mortgage transactions in BC — purchases, refinances, renewals, first-time buyers, self-employed borrowers — my services are completely free to you.

Does Using a Broker Cost Me a Higher Rate?

No. This is a common misconception worth clearing up directly.

Brokers have access to the same rates — and often better rates — than what you'd get walking into a bank branch. In many cases, lenders offer brokers lower rates than their posted rates because brokers bring volume and qualified borrowers. The rate you get through me is competitive with or better than what you'd negotiate on your own.

What You Get for Free

When you work with me at no cost, here's what that actually includes:

A full review of your financial situation and mortgage options
Rate and product comparison across multiple lenders
Pre-approval management and rate hold
Full mortgage application preparation and submission
Lender communication and negotiation on your behalf
Condition fulfilment and document coordination
Ongoing advice throughout the process and at renewal

For most people, this is several hours of work they'd otherwise have to do themselves — across multiple banks, multiple applications, and multiple conversations — all consolidated into one relationship with one person who's working for you.

The Bottom Line

Using a mortgage broker in BC costs you nothing in the vast majority of situations. The lender pays my fee, your rate isn't affected, and you get access to the full market instead of just one lender's options.

If your situation involves private lending or other fee-applicable scenarios, I'll tell you exactly what the cost is before we do anything — no surprises.

Have questions about your specific situation? Book a free consultation or call me at (778) 988-8409 .

What Is an Insured Mortgage and How Does It Work?

Tue, 28 Oct 2025 19:06:56 GMT

If you're buying a home with less than 20% down, you'll need something called an insured mortgage. Many borrowers find this confusing at first, especially since it doesn’t refer to insurance for you, the borrower. That’s why I have put together this straightforward breakdown so you understand what insured mortgages are, why they exist, and how they affect your purchase.

What Is an Insured Mortgage?

A mortgage must be insured when a borrower makes a down payment of less than 20% on a home purchase. The insurance protects the lender (not the borrower) in case the borrower defaults. The insurance is guaranteed by the federal government.

So, why do we have this program? It allows borrowers to buy homes with smaller down payments and higher loan-to-value (LTV) ratios. Higher loan-to-value mortgages are inherently more risky because there is not much cushion if the housing market starts to decline.

For example, if someone buys a $500,000 home with only 5% down ($25,000), they’ll need a $475,000 mortgage—this is a 95% LTV . If the market drops and the home’s value falls to $470,000, the mortgage would still be $475,000. If the borrower stopped making payments, the lender could lose money after selling the home and paying costs.

That kind of loss, multiplied across thousands of borrowers, could threaten the stability of the entire banking system (as we saw in the U.S. in 2008). The mortgage insurance system is designed to prevent that scenario by spreading risk and keeping lenders protected.

How Does the Insurance Work?

You, the borrower, pay the insurance premium. It's typically added directly to your mortgage balance rather than paid upfront. The cost depends on your down payment size and amortization.

Example:

Purchase price: $500,000
Down payment: $25,000 (5%)
Mortgage amount: $475,000
Insurance premium: 4.2% = $19,950
Total new mortgage: $494,950

The insurance does add cost, but insured mortgages usually offer slightly lower interest rates because the lender's risk is minimal. The rate savings don't fully offset the premium, but they help.

The Insurer’s Role

For insured mortgages, the insurer’s approval is the most important part of the process. If the insurer won’t approve the file, no lender can. Once the insurer signs off, we can typically find a lender to fund the loan.

Canada has three mortgage insurers:

CMHC (public)
Sagen (private)
Canada Guaranty (private)

All of the insurers are backed by government guarantees and have to follow similar rules, but each has a few unique programs. Lenders usually choose the insurer, though I sometimes work with them to send a file to a specific insurer if it benefits the borrower.

Qualification Rules

Because insured mortgages are government-backed, the rules are strict:

Debt ratios:
39% of your income can go toward your stress-tested mortgage payment, property taxes, heat, and half of condo fees
44% of your income can go toward the above plus your other debts
Down payment: 5% on the first $500,000, 10% on the remainder
Maximum purchase price: $1.5 million
Amortization: Maximum of 25 years for most buyers; up to 30 years for first-time buyers who qualify under the new federal program

Unlike with an uninsured mortgage, where lenders may have some flexibility if your income ratios are slightly above the limits, there is no discretion on an insured mortgage. If your ratios exceed the limits even a little bit, the insurer will decline the application.

The Approval Process

The process is similar to an uninsured mortgage, with one extra step:

We submit your mortgage application to the lender of choice
They do their initial review
If that looks good, they package it up and send it to the insurer
Once the insurer has reviewed and approved it, the file comes back to the lender for final review and approval

Common Misunderstandings About Insured Mortgages

Many borrowers are surprised to learn the following facts about insured mortgages:

You do not need to be a first-time homebuyer to buy with less than 20% down
You cannot buy an investment property with less than 20% down
You can buy a second home with less than 20% down
You cannot refinance an insured mortgage and keep the insurance. If you have an insured mortgage and do refinance, you will lose the insurance. This mostly affects the lender, but it also moves you to uninsured rates.

Why Choose an Insured Mortgage?

Given the cost and restrictions, why would anyone choose an insured mortgage?

The main reason is accessibility . It allows you to buy a home without saving a full 20% down payment, which is increasingly difficult with high home prices and living costs.

It can also be a strategic choice. Some buyers prefer to keep more of their savings invested or diversified instead of tying everything up in a down payment. If your investments are earning more than your mortgage costs, keeping that money invested might make financial sense.

Real-World Example

Let's say you're buying a $600,000 home. Here's how the costs compare between the minimum down payment for an insured mortgage and the minimum down payment for an uninsured mortgage:

With the insured mortgage, you need $85,000 less upfront, but your monthly payment is $448 higher due to the larger loan and added premium. The trade-off is accessibility: you can buy the home sooner without needing to save an additional $85,000.

Quick Summary

Insured mortgages: required when you put down less than 20% on a home purchase
Insurance cost: Added to your mortgage; protects the lender, not the borrower.
The premium: typically 2.8% to 4.2% of the mortgage amount and gets added to your loan
Strict rules: Government limits on debt ratios, purchase price, and down payment.
Three insurers: CMHC, Sagen, and Canada Guaranty.
Maximum purchase price: with an insured mortgage is $1.5 million
Interest rates: on insured mortgages are typically 0.10% to 0.30% lower than uninsured mortgages
Main benefit: Enables homeownership with a smaller down payment.

Next Steps

If you're considering buying a home with less than 20% down, I can walk you through the exact costs and qualification requirements based on your situation. I'll show you what your insurance premium would be, what your monthly payments would look like, and whether an insured mortgage is the right choice for you.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Glossary

Amortization: The length of time it will take to pay off your mortgage in full.

Default: When a borrower stops making mortgage payments and fails to meet the terms of their loan agreement.

Down Payment: The initial cash payment you make when purchasing a home, expressed as a percentage of the purchase price.

Insured Mortgage: A mortgage that requires default insurance because the down payment is less than 20% of the purchase price.

Loan-to-Value (LTV) Ratio: The percentage of the home's value that you're borrowing. A $475,000 mortgage on a $500,000 home is a 95% LTV.

Refinance: Replacing your existing mortgage with a new one, often to access equity or change terms.

Stress Test: The federal rule that requires you to qualify at a higher interest rate than your actual rate, ensuring you can afford payments if rates increase.

Uninsured Mortgage: A mortgage where the down payment is 20% or more, so default insurance is not required.

Understanding Down Payment Documentation: What to Expect and Why It Matters

Mon, 20 Oct 2025 22:23:31 GMT

The part of mortgage approval nobody likes but everyone needs

Confirming your down payment is one of the most tedious (and sometimes invasive) steps in getting a mortgage approved. Unfortunately, it’s also one of the most important. Here’s why lenders require it, what documents you’ll need, and how I make the process as easy as possible for you.

Why lenders need to confirm your down payment

There are two main reasons:

To confirm you have enough funds.
Lenders must verify that you have enough money to cover both the down payment and closing costs .
To comply with anti–money laundering (AML) laws.
Canadian lenders must follow federal AML rules enforced by FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada) and, for insured mortgages, CMHC . These rules ensure your down payment isn’t connected to criminal activity.

To meet AML requirements, we need to provide a complete 90-day history of your down payment funds. Any transactions over $1,000 must be explained. If money was transferred from another account, we’ll also need a 90-day history of that account.

How the documentation process works

It can be a bit of a paper chase—but I handle most of it for you.

Here’s what we do:

You provide bank statements showing your down payment funds.
I’ll review and highlight anything that needs clarification.
If we need to trace funds from another account, I’ll ask for those statements too.
I’ll prepare the explanations and notes the lender requires—you just supply the paperwork.

Other common down payment scenarios

1. Gifts from family

If a family member is helping you with your down payment, we’ll need to document it. Lenders typically allow borrowers to receive gifts from immediate family members (parents, siblings, grandparents). If you're receiving a gift from non-immediate family, let me know so we can discuss your options.

The lender will require a gift letter stating that the money is a gift and not expected to be repaid. Each lender has their own template, so once we determine which lender we're working with, I'll provide the letter for you and your family member to sign.

2. Funds from outside Canada

If your down payment is coming from outside Canada, whether it's your own funds held abroad or a gift from family overseas, let me know immediately. Depending on where the funds are coming from, there may be restrictions on how long they need to be in Canada before they can be used.

3. Investments as your down payment

If your down payment is currently invested (for example, in stocks, mutual funds, or a TFSA), you do not need to liquidate the investments just for verification purposes. We simply need a 90-day history of the investment account.

However, it's important to make sure your down payment isn't locked in an investment or account that you won't be able to access when you need it. Common examples include:

Employer RRSPs that aren't accessible
Non-cashable GICs that haven't matured yet

Make sure you'll actually be able to get the funds out when it's time to close.

4. Non-traditional sources

Unfortunately, cryptocurrency, cash, and other non-traceable assets are not typically accepted as sources for a down payment. If you're planning to use one of these sources, let me know as soon as possible so we can put together a plan to make it work.

Quick Summary

Lenders require 90 days of statements to verify your down payment.
Every transaction over $1,000 must be documented.
Gifts are allowed from immediate family and need a signed gift letter .
Foreign funds may have holding period restrictions .
Investments can count, but must be accessible when needed.
Cash and crypto are not accepted as down payment sources.
I’ll handle the lender explanations—you just provide the documents.

Next Steps

The key to making down payment documentation as painless as possible is getting ahead of it early. If you have any questions about your specific situation, or if you're unsure whether your down payment will meet lender requirements, reach out now so we can work through it together.

Book a consultation or call 778-988-8409 .

Glossary

AML (Anti–Money Laundering):
Government regulations designed to prevent illegal funds from entering the financial system.

Closing Costs:
Fees and expenses due at the time of closing, separate from your down payment.

CMHC (Canada Mortgage and Housing Corporation):
A federal agency that provides mortgage default insurance for high-ratio (under 20% down) mortgages.

Down Payment:
The portion of the purchase price you pay upfront when buying a home.

FINTRAC:
Canada’s financial intelligence unit, responsible for enforcing AML compliance.

Gift Letter:
A form confirming that funds received from a family member are a gift and don’t need to be repaid.

Credit and Mortgage Financing

Thu, 09 Oct 2025 07:45:00 GMT

Credit. The ability of a customer to obtain goods or services before payment, based on the trust that you will make payments in the future. When you borrow money to buy a property, you’ll be required to prove that you have a good history of managing your credit. That is, making good on all your payments.

But what exactly is a “good history of managing credit”? What are lenders looking at when they assess your credit report? If you’re new to managing your credit, an easy way to remember the minimum credit requirements for mortgage financing is the 2/2/2 rule. Two active trade lines established over a minimum period of two years, with a minimum limit of two thousand dollars, is what lenders are looking for.

A trade line could be a credit card, an instalment loan, a car loan, or a line of credit; basically, anytime a lender extends credit to you. Your repayment history is kept on your credit report and generates a credit score. For a tradeline to be considered active, you must have used it for at least one month and then once every three months.

To build a good credit history, both of your tradelines need to be used for at least two years. This history gives the lender confidence that you’ve established good credit habits over a decent length of time.

Two thousand dollars is the bare minimum limit required on your trade lines. So if you have a credit card with a $1000 limit and a line of credit with a $2500 limit, you would be okay as your limit would be $3500. If you’re managing your credit well, chances are you will be offered a limit increase. It’s a good idea to take it. Mortgage Lenders want to know that you can handle borrowing money.

Now, don’t confuse the limit with the balance. You don’t have to carry a balance on your trade lines for them to be considered active. To build credit, it’s best to use your tradelines but pay them off in full every month in the case of credit cards and make all your loan payments on time.

A great way to use your credit is to pay your bills via direct withdrawal from your credit card, then set up a regular transfer from your bank account to pay off the credit card in full every month. Automation becomes your best friend. Just make sure you keep on top of your banking to ensure everything works as it should.

Now, you might be thinking, what about my credit score, isn’t that important when talking about building a credit profile to secure a mortgage? Well, your credit score is important, but if you have two tradelines, reporting for two years, with a minimum limit of two thousand dollars, without missing any payments, your credit score will take care of itself, and you should have no worries.

With that said, it never hurts to take a look at your credit every once and a while to ensure no errors are reported on your credit bureau. So, if you’re thinking about buying a property in the next couple of years and want to make sure that you have good enough credit to qualify, let’s talk.

Connect anytime; it would be a pleasure to work with you and help you to understand better how your credit impacts mortgage qualification.

Self-Employed Mortgage in Canada: What Lenders Actually Look At

Tue, 07 Oct 2025 15:30:02 GMT

If you're self-employed and have tried to get a mortgage through your bank, you've probably run into a frustrating wall. Your income looks different on paper than it does in your bank account — and most banks aren't set up to look past your T1 General.

But "the bank said no" is not the same as "you can't get a mortgage." Let me explain exactly how lenders assess self-employed income — and why the right lender makes all the difference.

The Core Problem: Write-Offs vs. Qualifying Income

As a business owner in Canada, you likely reduce your taxable income through legitimate business expenses — vehicle use, home office, meals, equipment, professional fees, and more. This is smart tax planning. But it creates a problem when you need to prove income to a lender.

Most traditional lenders use your net income as declared on your T1 General to qualify you. If your gross business income is $200,000 but your write-offs bring your declared income to $80,000, the lender qualifies you on $80,000 — even though you're generating significantly more.

How Different Lenders Assess Self-Employed Income

1. Verified Income (Traditional)

Uses your T1 General net income and Notices of Assessment from CRA, averaged over two years. Best for business owners whose declared income is strong enough to qualify without adjustments.

2. Stated Income (Alternative Lenders)

You declare your income based on what you reasonably earn, supported by bank statements or gross revenue evidence rather than tax returns. Typically requires a minimum 20% down payment and comes with slightly higher rates.

3. Bank Statement Programs

Some lenders assess 12–24 months of business bank deposits to calculate your income, bypassing tax returns entirely. Particularly useful for newer businesses or those with highly variable income patterns.

What Lenders Always Look At

Length of self-employment: Most traditional lenders want 2+ years
Credit score and history: A score of 680+ is typically required for the best programs
Down payment or equity: 20% or more opens up the full range of programs
Business viability: Registration documents, contracts, invoices, or a letter from your accountant

What to Prepare Before You Apply

2 years of T1 General tax returns and Notices of Assessment
Business registration or articles of incorporation
3–6 months of personal and business bank statements
Accountant-prepared financial statements if incorporated

Why Lender Selection Matters More for Self-Employed Borrowers

I've seen the same self-employed borrower qualify for a $650,000 mortgage at one lender and a $900,000 mortgage at another — same income, same debts, same property. The difference was how each lender calculated the income. This is why going directly to your bank is the least effective strategy if you're self-employed.

Learn more about my self-employed mortgage services or book a free consultation . Call (778) 988-8409 — no obligation, no pressure, just straight answers.

How Mortgage Rates Work: Fixed vs. Variable

Fri, 26 Sep 2025 14:00:50 GMT

What affects mortgage rates? Does the Bank of Canada rate affect fixed-rate mortgages? These are questions that come up all the time, so in this this post, I’ll explain how fixed and variable rates are determined, why they don’t always move together, and what that means for you as a borrower.

But to start with the short answer: While Bank of Canada announcements immediately impact variable rates, fixed rates usually have those expectations already baked in long before the announcement. That’s because fixed rates are forward-looking — they reflect where markets think rates are headed, not just where they are today.

What Are Fixed and Variable Rates?

Fixed Rate

The interest rate stays the same for the entire mortgage term. Payments remain consistent, no matter what happens in the market.

Variable Rate

The interest rate changes during the mortgage term, moving up or down depending on the lender’s prime rate. Payments may stay the same (VRM) or change (ARM).

How Do Fixed Rates Work?

When you choose a fixed rate, the lender is guaranteeing your rate for the length of your term . To do this, they need to estimate what a fair rate will be over that time. This makes fixed rates more forward-looking — they often reflect not just today’s conditions, but also what the market expects to happen in the future.

Key Points About Fixed Rates

Strongly influenced by the Canadian bond market (especially the 5-year government bond yield).
Lenders adjust their fixed rates based on investor expectations for inflation and future interest rates.
Often, Bank of Canada moves are already baked into fixed rates before they happen.

Example

If bond yields suggest that rates will rise in the next year, lenders may increase fixed rates now, even if the Bank of Canada hasn’t made a move yet.

How Do Variable Rates Work?

Variable rates move directly with the Bank of Canada’s overnight rate. When the Bank of Canada raises or lowers its rate, lenders adjust their prime rate accordingly, and variable mortgages follow.

For borrowers, the most important detail is the discount from prime , because that sets the actual rate you pay. For example, if prime is 4.95% and your mortgage is Prime – 0.5%, your rate is 4.45%.

The discounts lenders offer change over time. In periods of economic uncertainty, lenders usually shrink the discount they offer, which can make new variable mortgages less attractive even if prime is coming down.

Key Points About Variable Rates

Directly tied to the Bank of Canada’s overnight rate, which is reviewed eight times a year.
Banks adjust their prime rate in response to these moves.
Your actual rate = Prime – discount (e.g., Prime – 0.5%).

Example

If prime is 4.95% and your mortgage is Prime – 0.5%, your rate is 4.45%. If the Bank of Canada cuts rates by 0.25%, prime drops to 4.70%, and your rate automatically drops to 4.20%.

Why Don’t Fixed and Variable Always Move Together?

Fixed rates reflect the bond market, which looks ahead at where rates and inflation may go.
Variable rates respond directly to Bank of Canada decisions, reflecting current conditions.
This is why fixed rates can fall while variable rates stay flat, or vice versa.

Next Steps

If you’re deciding between fixed and variable, understanding how each is set is the first step. The next is to match the right mortgage type to your budget and comfort with risk. If you’d like to review which option works best for you, I’d be happy to help.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Mortgage Term Glossary

Amortization: The total length of time it will take to pay off your mortgage completely (typically 25–30 years in Canada).
Bond Yield: The return investors get from government bonds. Used as a benchmark for fixed mortgage rates.
Discount (Variable Rate): The amount subtracted from prime to determine your actual mortgage rate.
Fixed Rate: An interest rate that stays the same for the entire mortgage term.
Mortgage Term: The length of your mortgage contract with your lender (typically 1–5 years), after which you need to renew.
Overnight Rate: The interest rate at which major banks borrow and lend money to each other, set by the Bank of Canada.
Prime Rate: The interest rate banks use as a baseline for loans, influenced by the Bank of Canada’s overnight rate.
Variable Rate: An interest rate that changes during your mortgage term based on lender prime rates.

Fixed vs. Variable Mortgages: Which is Right for You?

Thu, 25 Sep 2025 14:00:09 GMT

When arranging a mortgage, one of the first decisions you’ll need to make is whether to go with a fixed or variable rate. Both options have their own benefits and challenges, and understanding the differences will help you choose the one that fits your financial situation best.

In this post, we’ll break down the differences between fixed and variable mortgages, how they’re priced, the pros and cons of each, and what you should consider before making a decision.

What are Fixed and Variable Mortgages?

Fixed Rate Mortgage: Your interest rate stays the same for the entire mortgage term. That means your monthly payments won’t change, making budgeting more predictable.

Variable Rate Mortgage: Your interest rate changes during the term. There are two main types:

Variable Rate Mortgage (VRM): Your payment amount stays the same, but how much goes toward principal vs. interest changes as rates move.
Adjustable Rate Mortgage (ARM): Your payment amount itself changes when rates move.

How Do Fixed and Variable Mortgages Work?

Fixed

Your rate is set when you sign your mortgage contract.
Payments remain consistent, regardless of whether interest rates rise or fall.
Fixed rates are heavily influenced by the Canadian 5-year bond yield.

Variable

Your rate is tied to your lender’s prime rate, which follows the Bank of Canada’s overnight lending rate (reviewed 8 times a year).
Lenders usually offer a discount from prime, such as Prime – 0.4% .
You can often lock into a fixed rate at any time (though usually for a term equal to or longer than what’s left on your mortgage).

Penalties for Breaking Your Mortgage

Fixed

The greater of three months’ interest or the Interest Rate Differential (IRD). IRD can be very costly if rates have dropped since you signed.

Variable

Always three months’ interest — simpler and usually less expensive.

Pros and Cons

Fixed Rate Pros:

Predictable payments, easier budgeting
Protection if rates rise
Currently about 1% lower than variable, meaning you may qualify for more

Fixed Rate Cons:

More penalty risk if you break the mortgage early
You miss out if rates fall

Variable Rate Pros:

Benefit if rates decrease
Less penalty risk(3 months’ interest)
Option to lock into fixed at any time

Variable Rate Cons:

Payments (ARM) or interest portion (VRM) can rise if rates go up
Less predictable for budgeting
Lock-in rates may not always be the best available

Quick Summary

• Fixed mortgages = stable, predictable, tied to bond yields, but more penalty risk.
• Variable mortgages = tied to Bank of Canada, potential savings, lower penalty risk, but less predictable.
• VRM vs. ARM = VRM keeps payments steady while ARM adjusts payments with rates.

Next Steps

Choosing between fixed and variable depends on your risk tolerance, financial goals, and comfort with rate changes. If you’re unsure which option is right for you, let’s talk about your situation and find the best fit.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Mortgage Term Glossary

Adjustable Rate Mortgage (ARM): A variable mortgage where payments increase or decrease as rates change.
Amortization: The total length of time it will take to pay off your mortgage completely (typically 25–30 years in Canada).
Bond Yield: The return investors get from government bonds. Used as a benchmark for fixed mortgage rates.
Down Payment: The upfront amount you pay toward the purchase price of a home, expressed as a percentage of the total price.
Equity: The difference between what your home is worth and what you owe on your mortgage.
Fixed Rate: An interest rate that stays the same for the entire mortgage term.
Interest Rate Differential (IRD): A penalty calculation for breaking a fixed mortgage when current rates are lower than your original rate.
Lock-In: The option to switch from a variable mortgage to a fixed mortgage during your term.
Mortgage Term: The length of your mortgage contract with your lender (typically 1–5 years), after which you need to renew.
Prime Rate: The interest rate banks use as a baseline for loans, influenced by the Bank of Canada’s overnight rate.
Variable Rate Mortgage (VRM): A variable mortgage where payments stay the same, but the principal vs. interest split changes with rate moves.
Variable Rate: An interest rate that changes during your mortgage term based on lender prime rates.

Locking in a Variable Rate Mortgage

Thu, 25 Sep 2025 07:15:03 GMT

If you have a variable rate mortgage and recent economic news has you thinking about locking into a fixed rate, here’s what you can expect will happen. You can expect to pay a higher interest rate over the remainder of your term, while you could end up paying a significantly higher mortgage penalty should you need to break your mortgage before the end of your term.

Now, each lender has a slightly different way that they handle the process of switching from a variable rate to a fixed rate. Still, it’s safe to say that regardless of which lender you’re with, you’ll end up paying more money in interest and potentially way more money down the line in mortgage penalties should you have to break your mortgage.

Interest rates on fixed rate mortgages

Fixed rate mortgages come with a higher interest rate than variable rate mortgages. If you’re a variable rate mortgage holder, this is one of the reasons you went variable in the first place; to secure the lower rate.

The perception is that fixed rates are somewhat “safe” while variable rates are “uncertain.” And while it’s true that because the variable rate is tied to prime, it can increase (or decrease) within your term, there are controls in place to ensure that rates don’t take a roller coaster ride. The Bank of Canada has eight prescheduled rate announcements per year, where they rarely move more than 0.25% per announcement, making it impossible for your variable rate to double overnight.

Penalties on fixed rate mortgages

Each lender has a different way of calculating the cost to break a mortgage. However, generally speaking, breaking a variable rate mortgage will cost roughly three months of interest or approximately 0.5% of the total mortgage balance. While breaking a fixed rate mortgage could cost upwards of 4% of the total mortgage balance should you need to break it early and you’re required to pay an interest rate differential penalty.

For example, on a $500k mortgage balance, the cost to break your variable rate would be roughly $2500, while the cost to break your fixed rate mortgage could be as high as $20,000, eight times more depending on the lender and how they calculate their interest rate differential penalty.

The flexibility of a variable rate mortgage vs the cost of breaking a fixed rate mortgage is likely another reason you went with a variable rate in the first place.

Breaking your mortgage contract

Did you know that almost 60% of Canadians will break their current mortgage at an average of 38 months? And while you might have the best intention of staying with your existing mortgage for the remainder of your term, sometimes life happens, you need to make a change.

Here’s is a list of potential reasons you might need to break your mortgage before the end of the term. Certainly worth reviewing before committing to a fixed rate mortgage.

Sale of your property because of a job relocation.
Purchase of a new home.
Access equity from your home.
Refinance your home to pay off consumer debt.
Refinance your home to fund a new business.
Because you got married, you combine assets and want to live together in a new property.
Because you got divorced, you need to split up your assets and access the equity in your property
Because you or someone close to you got sick
Because you lost your job or because you got a new one
You want to remove someone from the title.
You want to pay off your mortgage before the maturity date.

Essentially, locking your variable rate mortgage into a fixed rate is choosing to voluntarily pay more interest to the lender while giving up some of the flexibility should you need to break your mortgage.

If you’d like to discuss this in greater detail, please connect anytime. It would be a pleasure to walk you through all your mortgage options and provide you with professional mortgage advice.

What’s the Difference Between a Variable Rate Mortgage and an Adjustable Rate Mortgage?

Wed, 24 Sep 2025 14:00:23 GMT

When considering a variable-rate mortgage, you’ll come across two different types: the Variable Rate Mortgage (VRM) and the Adjustable Rate Mortgage (ARM) . While both are tied to your lender’s prime rate and move when the Bank of Canada changes rates, they work differently and those differences can impact your budget and long-term strategy.

Both are colloquially referred to as “variable mortgages,” so it’s important to understand and clarify which one you are being offered if you’re considering a variable option. In this post, we’ll break down how ARMs and VRMs work, the pros and cons of each, and which option may suit your financial goals better.

What Are ARM and VRM Mortgages?

Variable Rate Mortgage (VRM): Your payment amount stays the same when rates change, but the portion of each payment that goes toward principal versus interest adjusts.

Adjustable Rate Mortgage (ARM): Your payment amount itself changes whenever the lender’s prime rate moves.

How Do They Work?

VRM: Fixed Payment, Shifting Balance

Your monthly payment stays constant.
If interest rates go down, more of your payment goes toward principal, helping you pay off your mortgage faster.
If interest rates go up, more of your payment goes toward interest, slowing your progress on the principal.
If rates rise significantly, lenders may increase your payment to make sure it still covers interest owing.

ARM: Payment Moves With Rates

Your payment is recalculated each time the prime rate changes.
If interest rates go down, your payment decreases.
If rates go up, your payment increases.
The principal vs. interest portion of your payment remains more consistent compared to a VRM.

Pros and Cons

VRM Pros:

Predictable monthly payment amount
Benefit from rate drops through faster principal repayment
Easier for budgeting in the short term

VRM Cons:

Progress on principal slows if rates rise
Risk of payment shock if rates rise too much and the lender resets your payment higher

ARM Pros:

Payments decrease when rates fall
Principal repayment stays on track, even when rates change
Clearer link between rates and what you pay monthly

ARM Cons:

Payments increase right away if rates rise
Harder to budget with changing monthly payments

Quick Summary

• VRM = fixed payment, changing interest/principal split.
• ARM = changing payment, consistent repayment pace.
• Both are tied to prime, but they affect budgeting differently.

Next Steps

Choosing between ARM and VRM depends on your comfort with changing payments versus changing repayment speed. If you’d like to review which one is best for your situation, I’d be happy to walk you through the options.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Mortgage Term Glossary

Adjustable Rate Mortgage (ARM) : A variable mortgage where the payment amount increases or decreases as rates change.
Amortization: The total length of time it will take to pay off your mortgage completely (typically 25–30 years in Canada).
Discount (Variable Rate): The amount subtracted from prime to determine your actual mortgage rate.
Equity: The difference between what your home is worth and what you owe on your mortgage.
Mortgage Term: The length of your mortgage contract with your lender (typically 1–5 years), after which you need to renew.
Prime Rate: The interest rate banks use as a baseline for loans, influenced by the Bank of Canada’s overnight rate.
Variable Rate Mortgage (VRM): A variable mortgage where payments stay the same, but the interest vs. principal portion shifts with rates.
Variable Rate: An interest rate that changes during your mortgage term based on lender prime rates.

How Pre-Payments Can Save You Time and Money

Tue, 23 Sep 2025 14:00:06 GMT

Did you know you could pay off your mortgage years earlier — and save thousands in interest — just by making extra payments? It doesn’t take a massive lump sum to make a big difference. Even small, regular pre-payments can add up over time.

In this blog, we’ll look at what pre-payment privileges are, how they work, and how to use them to your advantage.

What Are Pre-Payment Privileges?

Pre-payment privileges are options built into many mortgages that allow you to pay extra toward your principal balance without penalty. Since regular mortgage payments include both principal (the loan amount) and interest (the cost of borrowing), paying down extra principal early reduces the total interest you’ll pay over the life of your mortgage.

Most lenders offer at least one of the following:

Lump sum payments (up to a certain percentage of the original mortgage each year)
Double-up payments (making two regular payments at once)
Payment increases (raising your regular payment by a set percentage)

Example: The Impact of a 1% Pre-Payment

Let’s say you have a $500,000 mortgage with:

25-year amortization
5.25% interest rate

If you make a $5,000 lump sum payment every year (about 1% of the mortgage amount), here’s the difference:

With no pre-payments, the numbers look like this:

Total Pre-Payments: $0
Total Paid Over Time: $898,871
Interest Paid: $398,872
Time to Pay Off Mortgage: 25 years

Now compare that to making just one $5,000 lump sum pre-payment each year :

Total Pre-Payments: $95,000
Total Paid Over Time: $806,078
Interest Paid: $306,078
Time to Pay Off Mortgage: 19 years and 8 months

That means by making manageable yearly pre-payments, you’d save almost $93,000 in interest and become mortgage-free more than 5 years earlier .

Other Pre-Payment Options

Double-Up Payments

This option lets you double your regular mortgage payment whenever you choose, accelerating principal repayment significantly.

Payment Increase Privilege

Most lenders allow you to increase your regular payment by up to 15% once per year. Which can be a manageable and consistent way to get ahead because the additional payment still goes directly towards the principal.

Why Pre-Payments Matter

Save Thousands: Reduce the lifetime interest you pay
Pay Off Faster: Shorten your mortgage term by years
Build Equity Quicker: Increase the value you own in your home sooner

Things to Keep in Mind

Every lender has different rules about when and how you can make pre-payments
Some allow flexible payments anytime; others limit them to specific dates
Minimum pre-payment amounts usually apply (often $100 or more)

If you’re not sure about your lender’s policy, ask — or I can help you find out.

Quick Summary

• Lump Sum Payments: Extra payments directly against your mortgage balance
• Double-Up Payments: Pay twice your regular installment for faster repayment
• Payment Increases: Raise your monthly payment within set limits
• Bottom Line: Even small pre-payments can add up to big savings over time

Next Steps

If becoming mortgage-free faster sounds appealing, review your pre-payment options and start small. Even $100 extra here and there can have a meaningful impact.

If you’d like help building a pre-payment strategy that fits your budget, I’m here to guide you. Book a consultation or call 778-988-8409 .

Mortgage Term Glossary

Amortization: Total length of time to fully repay your mortgage (usually 25–30 years in Canada)

Interest: The cost of borrowing money, charged by the lender as a percentage of your loan balance

Lump Sum Payment: An extra payment made directly toward your mortgage balance

Payment Increase Privilege: An option to raise your regular mortgage payments within lender limits

Pre-Payment Privilege: Contractual allowance to make extra payments without penalty

Principal: The original loan amount, not including interest

How Debt Impacts Your Borrowing Power

Mon, 22 Sep 2025 14:00:06 GMT

Have you ever wondered how your car loan, credit card balance, or line of credit might affect your ability to qualify for a mortgage? For many buyers, non-mortgage debts play a bigger role than they realize in shaping what lenders will approve.

In this blog, we’ll break down how debts impact your borrowing power, why lenders look closely at them, and what practical steps you can take if you’re preparing to buy a home.

Understanding Borrowing Power

Your borrowing power is primarily determined by your income. If you earn $1,000 per month, no lender will approve a loan requiring $990 in monthly payments, because that would leave you only $10 for all other expenses—a clear recipe for financial trouble.

There are two thresholds lenders look at to evaluate your maximum mortgage:

The first is the Gross Debt Service (GDS) ratio , which typically allows about 39% of your gross income to go toward a stress-tested mortgage payment and housing costs.
The second is the Total Debt Service (TDS) ratio , which looks at all debts combined. It is typically capped around 44% of your gross (before-tax) income and includes:
Stress-tested mortgage payment
Property taxes
Heating costs
Any other monthly debt payments

How Debts Reduce Borrowing Power

For insured mortgages that follow the standard thresholds of 39% and 44%, you can have the equivalent of 5% of your gross income in additional debts before they start to reduce your borrowing power.

For uninsured mortgages, exceptions can often increase the GDS limit to 44%, meaning any additional debts directly reduce your borrowing power.

Because of this 44% threshold, every dollar of monthly debt requires about $2.27 in additional monthly income to offset it. Since most people can't quickly increase their income, let's look at how debts reduce your borrowing power.

Key Math

Every $100 in monthly debt payments reduces your mortgage borrowing power by approximately $13,500.
(Calculation based on a 4.5% interest rate with a 6.5% stress test qualification and 25-year amortization)

That means:

A $500/month car loan = about $67,000 less borrowing power
A $200/month line of credit = about $27,000 less borrowing power

Note: Credit cards that are paid off in full each month do not impact your borrowing power. However, carrying a balance will work against you.

Key Benefits of Managing Debt Wisely

• Maximize home options – Less debt means more borrowing room for your mortgage.
• Lower stress during approval – Fewer debts make qualification smoother.
• Flexibility in budgeting – Reduces the risk of stretching yourself too thin financially.

Important Considerations

• Not all debt is bad — car loans, student loans, or lines of credit can make sense at the right time.
• The danger comes when new debts are added while you’re actively shopping for or closing on a home — this can jeopardize approval.
• Always talk with your mortgage broker before taking on new credit if you plan to buy soon.

Real-World Example

Scenario:

Couple with household income of $100,000
20% down payment
Already carrying a $400/month car loan

Impact:

Without the loan, they could qualify for around $480,000 mortgage.
With the loan, that drops by about $61,000 , reducing their maximum approval to $419,000 .

That $61,000 difference could determine whether you qualify for your preferred home or have to settle for a less expensive option.

Next Steps

If you’re planning to buy a home soon, review your current debts and see how they may affect your approval. Even small payments can make a big difference in how much you qualify for.

If you’d like a personalized analysis of how your debts might impact your mortgage options, I’d be happy to help.

Book a consultation or call 778-988-8409

Mortgage Term Glossary

Borrowing Power: The maximum mortgage amount a lender will approve based on your income, debts, and other factors.

Equity: The portion of your home you truly own, calculated as home value minus mortgage balance.

Gross Debt Service (GDS) Ratio: A measure of how much of your gross income can go toward housing costs (mortgage payment, property taxes, heating, and sometimes condo fees). Lenders typically cap this at 39%, though exceptions may apply if you have more than 20% down.

Gross Income: How much you make before taxes.

Stress Test: A requirement that you qualify at a higher interest rate than your actual rate, to ensure affordability.

Total Debt Service (TDS) Ratio: A measure of how much of your gross income can go toward all debt obligations (housing costs plus other monthly debt payments). Lenders typically cap this at around 44%, though exceptions may apply if you have more than 20% down.

Need help with your mortgage?

Open Mortgages: What They Are and When to Use Them

Thu, 18 Sep 2025 21:13:12 GMT

What is an Open Mortgage?

In Canada, most mortgages are "closed" mortgages, meaning you'll face a penalty if you want to pay them off early. An open mortgage is different - it can be paid off at any time without penalty.

However, this flexibility comes at a cost. Open mortgage rates are significantly higher than closed mortgage rates because lenders need to account for the possibility that you might pay off the entire balance at any time. This makes open mortgages unsuitable as a long-term strategy.

When Open Mortgages Make Sense

There are two main scenarios where an open mortgage can be a smart short-term solution:

Planning to Sell Soon After Renewal

If you're planning to sell your home within a month or so of your renewal date, it makes sense to renew into an open mortgage. This way, when your property sells, you can pay off the mortgage immediately without penalty.

An alternative strategy is to renew your entire mortgage into a HELOC (Home Equity Line of Credit) if you qualify. A HELOC typically offers a lower rate and requires only interest payments, making it less expensive. However, not every lender offers HELOCs and not every borrower will qualify.

Switching Lenders at Renewal

The most common use case for open mortgages is when switching lenders at renewal. Sometimes its hard to make the dates line up exactly. For example if your renewal date is on a weekend or if you are on vacation or if we need a few extra days to get the new mortgage completed. In these situations, you would instruct your current lender to renew your mortgage into an open mortgage. A few days later, when we complete the switch to your new lender, the open mortgage gets paid out without penalty. Although the rate is high, since it's only for a few days, the overall cost remains minimal.

I actually ask all my clients who are switching lenders at renewal to ask their existing lender to renew their mortgage into an open mortgage, even if we plan to align the dates perfectly. That way if there is a slight delay of a day or two they aren’t automatically renewed into a new closed mortgage by the existing lender.

Quick Summary

Key Benefits of Open Mortgages

No penalties for early repayment – flexibility to sell or switch anytime
Short-term solution for timing issues – useful during renewals and transitions
Peace of mind – no risk of being stuck in a costly closed mortgage if plans change suddenly

Important Considerations

High rates (often double closed mortgage rates) make them unsuitable for long-term use
Limited availability compared to standard closed mortgages
Best used strategically for short-term situations like selling or switching lenders

Example

Imagine your mortgage is up for renewal, but you’re switching lenders and the process runs a few days past your renewal date.

If you renew into a closed mortgage with your current lender, you could face penalties when you switch a few days later.
If you renew into an open mortgage, you pay a slightly higher rate for those few days but avoid penalties altogether.

Mortgage Term Glossary

Closed Mortgage : A mortgage with restrictions on early repayment, usually with penalties for breaking the term.

HELOC (Home Equity Line of Credit) : A revolving credit line secured by your home, typically at lower rates than an open mortgage.

Mortgage Renewal : The process of negotiating a new term for your mortgage once your current one expires.

Penalty : A fee charged by lenders if you break or pay off a closed mortgage early.

4 Types of Mortgage-Related Insurance Every Homebuyer Should Know

Thu, 18 Sep 2025 21:10:37 GMT

Understanding the different types of insurance that come up in the mortgage process, and which ones you actually need.

Buying a home comes with a lot of moving parts, and insurance is one of those topics that often causes confusion. Some policies are mandatory, others are optional, and a few mainly protect the lender rather than you.

To make things easier, here’s a breakdown of the four main types of insurance you’ll hear about during the mortgage process — what they mean, when they apply, and how they affect you.

The Four Types of Insurance

Default Insurance (CMHC, Sagen, Canada Guaranty)
Title Insurance
Mortgage Life Insurance
Homeowner Insurance

Let’s go through each one.

1. Default Insurance

Often called “CMHC insurance,” this protects the lender if you default and your home sells for less than what you owe.

When it’s required: If your down payment is less than 20%
Applies to: Homes under $1.5 million
Cost: Added to your mortgage and paid over time
Key point: Even though it protects the lender, you pay the premium. Lenders sometimes offer slightly lower rates on insured mortgages, but the added cost usually makes them more expensive overall.

2. Title Insurance

Title insurance protects against ownership issues such as fraud, survey errors, or undiscovered problems with the property.

Lender policy: Usually required to protect the bank
Owner policy: Optional, but recommended since it protects you directly
Cost: One-time fee (often under $400) that covers you for as long as you own the property

3. Mortgage Life Insurance

This is life and disability insurance that covers the mortgage if you pass away or can’t work due to illness or injury.

Optional: Not required by your lender
Cost: Based on your age, health, and mortgage size
Note: As a broker, I offer Manulife MPP which is great for interim coverage since it kicks in right away and has a 60-day money-back guarantee. That said, I always recommend speaking with an insurance advisor to find a plan that’s best for you long term.

4. Homeowner Insurance

Also called property insurance, this protects the home itself against risks like fire, theft, or flooding.

Mandatory: Required by lenders before closing (if you are buying a condo, the strata insurance is likely sufficient for the lender but its always wise to look at adding your own to conver any gaps.)
Timing: Proof of insurance must be provided to your lawyer before signing final paperwork
Flexibility: You can shop around, but the policy needs to meet lender requirements

Why This Matters

Understanding these insurance types helps you:

Avoid surprises during the mortgage process
Know which costs are mandatory versus optional
Protect both your investment and your peace of mind

Real-World Example

A first-time buyer purchases a condo for $700,000 with a 10% down payment ($70,000).

Because their down payment is under 20%, they need default insurance . The premium (about $19,000) is added to their mortgage.
Their lawyer requires proof of homeowner insurance before closing, which costs about $1,200 per year.
The lender gets a title insurance policy, and the buyer also chooses their own for $200 to protect against fraud or defects.
The couple takes out interim mortgage life insurance (MPP) , then later switches to independent coverage through an insurance advisor.

By knowing what each insurance covers, they’re prepared for every step of the process.

Quick Summary

• Default Insurance: Mandatory under 20% down — protects the lender
• Title Insurance: One-time cost — protects you against fraud and title issues
• Mortgage Life Insurance: Optional — covers the loan if you pass away or can’t work
• Homeowner Insurance: Mandatory — protects the property itself

Next Steps

If you’re getting ready to buy a home, take a little time to understand which insurances apply to your situation. Some are required, some are optional — but all play an important role in your financial plan.

If you’d like help navigating this process, I’m just a call or email away. Book a consultation or call 778-988-8409 .

Mortgage Term Glossary

Amortization: The total length of time to pay off your mortgage (usually 25–30 years in Canada)

Default Insurance: Insurance required with less than 20% down, protecting the lender if you default

Down Payment: The upfront portion of the home price that you pay out of pocket

Equity: The difference between your home’s value and what you owe

Homeowner Insurance: Policy that protects your property against risks like fire, theft, and flooding

Mortgage Insurance: Life/disability coverage that pays your mortgage if you can’t

Mortgage Term: The length of your mortgage contract (typically 1–5 years)

Title Insurance: Insurance that protects against fraud or disputes over property ownership

Your Guide to Successfully Navigating the Housing Market

tim@lyonmtg.com (Tim Lyon) — Thu, 18 Sep 2025 07:45:06 GMT

Wondering If Now’s the Right Time to Buy a Home? Start With These Questions Instead.

Whether you're looking to buy your first home, move into something bigger, downsize, or find that perfect place to retire, it’s normal to feel unsure—especially with all the noise in the news about the economy and the housing market.

The truth is, even in the most stable times, predicting the “perfect” time to buy a home is incredibly hard. The market will always have its ups and downs, and the headlines will never give you the full story.

So instead of trying to time the market, here’s a different approach:
Focus on your personal readiness—because that’s what truly matters.

Here are some key questions to reflect on that can help bring clarity:

Would owning a home right now put me in a stronger financial position in the long run?
Can I comfortably afford a mortgage while maintaining the lifestyle I want?
Is my job or income stable enough to support a new home?
Do I have enough saved for a down payment, closing costs, and a little buffer?
How long do I plan to stay in the property?
If I had to sell earlier than planned, would I be financially okay?
Will buying a home now support my long-term goals?
Am I ready because I want to buy, or because I feel pressure to act quickly?
Am I hesitating because of market fears, or do I have legitimate concerns?

These are personal questions, not market ones—and that’s the point. The economy might change tomorrow, but your answers today can guide you toward a decision that actually fits your life.

Here’s How I Can Help

Buying a home doesn’t have to be stressful when you have a plan and someone to guide you through it. If you want to explore your options, talk through your goals, or just get a better sense of what’s possible, I’m here to help.

The best place to start? A mortgage pre-approval .

It’s free, it doesn’t lock you into anything, and it gives you a clear picture of what you can afford—so you can move forward with confidence, whether that means buying now or waiting.

You don’t have to figure this out alone. If you’re curious, let’s talk. Together, we can map out a homebuying plan that works for you.

Construction Assignments

Thu, 04 Sep 2025 07:15:06 GMT

One of the benefits of working with an independent mortgage professional is having lots of great financing options! Rather than dealing with a single lender with one set of products, independent mortgage professionals work with multiple lenders who offer a wide selection of mortgage financing options that provide more choice.

Increased choice in mortgage products is beneficial when your situation isn’t “normal,” or you don’t quite fit the profile of a standard buyer. Purchasing a new construction home through an assignment contract would be a great example of this.

Purchasing a new construction home through an assignment contract can be tricky as not every lender wants the added perceived risk of dealing with this type of transaction. Most of these lenders won’t come out and say it; instead, they add a significant list of qualifying conditions to make the process harder.

The good news is, there are lenders available exclusively through the broker channel that have favourable policies for assignment purchases.

Here are some of the highlights:

All standard purchase qualifications apply, including applicable income verification, established credit, and required downpayment
Assignments can be at the original purchase price or current market value
Minimum 620 beacon score with no previous bankruptcies or consumer proposals
The full downpayment must come from the purchaser and not include any incentives from the seller.

As far as documentation goes, the lender will want to see the original purchase agreement signed by all parties, the MLS listing, the assignment agreement signed by the builder, the original purchaser, and the new buyer. The lender will also want to see the side agreement between the original purchaser and the new buyer, including the amended purchase price. The lender will want to substantiate the value through a full appraisal.

Now, as every situation is different, this list of conditions is in no way exhaustive but meant to show that assigning a new construction purchase contract is doable while highlighting some of the terms necessary to secure financing.

If you’re looking to purchase new construction through an assignment contract, or if you’d like to discuss purchasing a home through traditional means, please connect anytime! It would be a pleasure to outline the mortgage products on the market that won’t limit your financing options!

From Summer Shine to Fall Fine: Smart Home Projects to Tackle Before the First Frost

Thu, 28 Aug 2025 00:53:19 GMT

As patios wind down and pumpkin spice ramps up, fall is the perfect reset for your home—and your homeowner game plan. These quick wins boost comfort, curb appeal, and efficiency now, and set you up for a low-stress winter (and a strong spring market).

1) Safety & “silent leak” checks (Weekend-ready)

Clean gutters & downspouts. Add leaf guards where trees overhang.
Roof scan. Look for lifted shingles, cracked flashings, or moss.
Seal the shell. Re-caulk window/door trim; replace weatherstripping.
Test alarms. New batteries for smoke/CO detectors; add one near bedrooms.
Why it matters: Prevent water intrusion and heat loss before storms roll in.

2) Heat smarter, not harder

Furnace/boiler tune-up and filter change.
Smart thermostat with schedules and geofencing.
Draft hunt. Foam gaskets behind outlets, door sweeps on exterior doors.
ROI tip: Efficiency upgrades lower monthly bills and can improve lender ratios if you’re eyeing a refinance later.

3) Fall-proof your yard (so spring you says “thanks”)

Aerate + overseed + fall fertilize for thicker turf next year.
Trim trees/shrubs away from siding and power lines.
Mulch perennials and plant spring bulbs now.
Shut off/bleed exterior taps and store hoses to avoid burst pipes.

4) Extend outdoor season (cozy edition)

Portable fire pit or propane heater + layered blankets.
Path/step lighting for darker evenings (solar or low-voltage).
Weather-resistant storage for cushions/tools to preserve value.
Neighborhood curb appeal: Warm lighting and tidy beds make a big first impression if you list in shoulder season.

5) Water management = winter peace of mind

Re-grade low spots and add downspout extensions (2–3+ metres).
Check sump pump (and backup).
Look for efflorescence or damp corners in the basement.

6) Mini-renos that punch above their weight

Entry/mudroom upgrade: hooks, bench, boot trays, closed storage.
Laundry room tune-up: counter over machines, sorting bins, task lighting.
Kitchen refresh: new hardware, tap, and under-cabinet lighting in one afternoon.
Budget guide: Many of these land under a micro-reno budget—perfect for a modest line of credit.

7) Indoor air quality tune-up

Deep clean vents and dryers (including the rigid duct).
Add door mats (exterior + interior) to catch grit/salt.
Houseplants or HEPA purifier for closed-window months.

Fast Timeline (pin this to the fridge)

Late August–September

Gutters/downspouts, roof/caulking, HVAC service, lawn care, plant bulbs, exterior tap shut-off plan, path lighting.

October

Weatherstripping/sweeps, fire pit setup, organize mudroom/garage, test alarms, sump check, downspout extensions, dryer vent cleaning.

Financing smarter: make your mortgage work for your home

Annual mortgage check-in. As rates, income, and goals evolve, a quick review can free up cash flow or open options for a small fall project budget.
HELOC vs. top-up refinance. For bite-size projects, a HELOC can be flexible. For bigger renos you plan to pay down, a top-up refi might make more sense.
Bundle & prioritize. Knock out the high-impact, low-cost items first (air sealing, safety, water management) before the cosmetic upgrades.

Not sure which route fits your fall plans? We’ll run the numbers and map the best financing path for your specific budget and goals.

Quick Checklist (copy/paste)

☐ Clean gutters/downspouts; add guards
☐ Roof & flashing visual check
☐ Re-caulk, weatherstrip, add door sweeps
☐ HVAC service + new filter
☐ Aerate/overseed/fertilize; trim trees; plant bulbs
☐ Path & entry lighting
☐ Drain/bleed outdoor taps; store hoses
☐ Downspout extensions; sump test
☐ Dryer vent cleaning
☐ Mudroom/garage organization
☐ Schedule mortgage review / discuss HELOC vs refi

Ready to make fall your low-stress season?

Book a quick fall mortgage check-up—15 minutes to see if a small credit line or a tweak to your current mortgage could cover your priority projects without straining cash flow.

Protect Yourself at Renewal

Thu, 21 Aug 2025 07:15:00 GMT

It’s a commonly held belief that if you’ve made your mortgage payments on time throughout the entirety of your mortgage term, that the lender is somehow obligated to renew your mortgage.

The truth is, a lender is never under any obligation to renew your mortgage. When you sign a mortgage contract, the lender draws it up for a defined time, so when that term comes to an end, the lender has every right to call the loan.

Now, granted, most lenders are happy to renew your mortgage, but several factors could come into play to prevent this from happening, including the following:

You’ve missed mortgage payments over the term.
The lender becomes aware that you’ve recently claimed bankruptcy.
The lender becomes aware that you’re going through a separation or divorce.
The lender becomes aware that you lost your job.
Someone on the initial mortgage contract has passed away.
The lender no longer likes the economic climate and/or geographic location of your property.
The lender is no longer licensed to lend money in Canada.

Again, while most lenders are happy to renew your mortgage at the end of the term, you need to understand that they are not under any obligation to do so.

So how do you protect yourself?

Well, the first plan of action is to get out in front of things. At least 120 days before your mortgage term expires, you should be speaking with an independent mortgage professional to discuss all of your options. By giving yourself this lead time and seeking professional advice, you put yourself in the best position to proactively look at all your options and decide what’s best for you.

When assessing your options at the time of renewal, even if the lender offers you a mortgage renewal, staying with your current lender is just one of the options you have. Just because your current lender was the best option when you got your mortgage doesn’t mean they are still the best option this time around. The goal is to assess all your options and choose the one that lowers your overall cost of borrowing. It’s never a good idea to sign a mortgage renewal without looking at all your options.

Also, dealing with an independent mortgage professional instead of directly with the lender ensures you have someone working for you, on your team, instead of seeking guidance from someone with the lender’s best interest in mind.

So if you have a mortgage that’s up for renewal, whether you’re being offered a renewal or not, the best plan of action is to protect yourself by working with an independent mortgage professional. Please connect anytime; it would be a pleasure to work with you!

The Property Matters in Mortgage Financing

Thu, 14 Aug 2025 07:15:08 GMT

When looking to qualify for a mortgage, typically, a lender will want to review four areas of your mortgage application: income, credit, downpayment/equity and the property itself. Assuming you have a great job, excellent credit, and sufficient money in the bank to qualify for a mortgage, if the property you’re looking to purchase isn’t in good condition, if you don't have a plan, you might get some pushback from the lender.

The property matters to the lender because they hold it as collateral if you default on your mortgage. As such, you can expect that a lender will make every effort to ensure that any property they finance is in good repair. Because in the rare case that you happen to default on your mortgage, they want to know that if they have to repossess, they can sell the property quickly and recoup their money.

So when assessing the property as part of any mortgage transaction, an appraisal is always required to establish value. If your mortgage requires default mortgage insurance through CMHC, Sagen (formerly Genworth), or Canada Guaranty, they’ll likely use an automated system to appraise the property where the assessment happens online. A physical appraisal is required for conventional mortgage applications, which means an appraiser will assess the property on-site.

So why is this important to know? Well, because even if you have a great job, excellent credit, and money in the bank, you shouldn’t assume that you’ll be guaranteed mortgage financing. A preapproval can only take you so far. Once the mortgage process has started, the lender will always assess the property you’re looking to purchase. Understanding this ahead of time prevents misunderstandings and will bring clarity to the mortgage process.

Practically applied, if you’re attempting to buy a property in a hot housing market and you go in with an offer without a condition of financing, once the appraisal is complete, if the lender isn’t satisfied with the state or value of the property, you could lose your deposit.

Now, what happens if you’d like to purchase a property that isn’t in the best condition? Being proactive includes knowing that there is a purchase plus improvements program that can allow you to buy a property and include some of the cost of the renovations in the mortgage. It’s not as simple as just increasing the mortgage amount and then getting the work done, there’s a process to follow, but it’s very doable.

So if you have any questions about financing your next property or potentially using a purchase plus improvements to buy a property that needs a little work, please connect anytime. It would be a pleasure to walk you through the process.

Getting a Mortgage While on Parental Leave

Thu, 07 Aug 2025 07:15:04 GMT

Chances are if the title of this article piqued your interest enough to get you here, your family is probably growing. Congratulations!

If you’ve thought now is the time to find a new property to accommodate your growing family, but you’re unsure how your parental leave will impact your ability to get a mortgage, you’ve come to the right place!

Here’s how it works. When you work with an independent mortgage professional, it won’t be a problem to qualify your income on a mortgage application while on parental leave, as long as you have documentation proving that you have guaranteed employment when you return to work.

A word of caution, if you walk into your local bank to look for a mortgage and you disclose that you’re currently collecting parental leave, there’s a chance they’ll only allow you to use that income to qualify. This reduction in income isn’t ideal because at 55% of your previous income up to $595/week, you won’t be eligible to borrow as much, limiting your options.

The advantage of working with an independent mortgage professional is choice. You have a choice between lenders and mortgage products, including lenders who use 100% of your return-to-work income.

To qualify, you’ll need an employment letter from your current employer that states the following:

Your employer’s name preferably on the company letterhead
Your position
Your initial start date to ensure you’ve passed any probationary period
Your scheduled return to work date
Your guaranteed salary

For a lender to feel confident about your ability to cover your mortgage payments, they want to see that you have a position waiting for you once your parental leave is over. You might also be required to provide a history of your income for the past couple of years, but that is typical of mortgage financing.

Whether you intend to return to work after your parental leave is over or not, once the mortgage is in place, what you decide to do is entirely up to you. Mortgage qualification requires only that you have a position waiting for you.

If you have any questions about this or anything else mortgage-related, please connect anytime. It would be a pleasure to work with you.

Bridge Financing and Deposit Lending

Thu, 31 Jul 2025 07:15:03 GMT

Let’s say you have a home that you’ve outgrown; it’s time to make a move to something better suited to your needs and lifestyle. You have no desire to keep two properties, so selling your existing home and moving into something new (to you) is the best idea.

Ideally, when planning out how that looks, most people want to take possession of the new house before moving out of the old one. Not only does this make moving your stuff more manageable, but it also allows you to make the new home a little more “you” by painting or completing some minor renovations before moving in.

But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in.

Bridge financing allows you to bridge the financial gap between the firm sale of your current home and the purchase of your new home. Bridge financing allows you to access some of the equity in your existing property and use it for the downpayment on the property you are buying.

So now let’s also say that it’s a very competitive housing market where you’re looking to buy. Chances are you’ll want to make the best offer you can and include a significant deposit. If you don’t have immediate access to the cash in your bank account, but you do have equity in your home, a deposit loan allows you to make a very strong offer when negotiating the terms of purchasing your new home.

Now, to secure bridge financing and/or a deposit loan, you must have a firm sale on your existing home. If you don’t have a firm sale on your home, you won’t get the bridge financing or deposit loan because there is no concrete way for a lender to calculate how much equity you have available.

A firm sale is the key to securing bridge financing and a deposit loan.

So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.

Getting a Mortgage After Bankruptcy

Thu, 24 Jul 2025 07:15:03 GMT

Sometimes life throws you a financial curveball. Bankruptcy and consumer proposals happen. It doesn’t mean your life is over, and it doesn’t mean you won’t ever qualify for a mortgage again.

The key to financial success here is getting things under control as quickly as possible. You must demonstrate to the potential lenders that what happened in the past won’t happen again in the future.

So if you’re thinking about getting a mortgage post-bankruptcy, lenders will want answers to the following questions:

How long have you been discharged?

Securing a mortgage will be dependent on how long it has been since you were discharged from your bankruptcy or consumer proposal. Most lenders consider the discharge date on both to be your new ground zero.

And while there is no legally defined waiting period for when you can apply for a new mortgage post-bankruptcy, what lenders will assess is how you’re managing your finances after your financial troubles.

Have you established new credit?

You can show lenders that they can trust you after bankruptcy by establishing new credit and managing that credit flawlessly. So as soon as you’ve been discharged, it’s a good idea to get a secured credit card and start rebuilding your credit score.

To be considered completely established, you’ll want to have two years of credit history on two trade lines with a credit limit of $2500 on each trade line. You’ll also want to make sure that you have no late or missed payments.

How much do you have available for a downpayment?

The more money you have to put towards purchasing a property, or the more equity you have in your property in the case of a refinance, the better your chances of getting a mortgage. The more money you bring to the table, the more comfortable a lender will feel about the risk they take of losing their investment should you run into future financial difficulty.

What is your total debt service ratio?

Another consideration lenders will look at is how much money you make compared to the cost of making your mortgage payments. So it probably goes without saying that the more money you make compared to the amount you want to borrow, the better.

Conventional or insured financing.

If you’re looking to get the best mortgage products available, here are some of the things a lender will want to see:

You’ve been discharged for at least two years plus a day.
You’ve established your credit (as listed above).
You have at least 5% down for the first $500k of the purchase and 10% down for anything over $500k.
If you don’t have a 20% downpayment, you will be required to secure mortgage insurance through CMHC, Sagen (formerly Genworth), or Canada Guaranty.
The cost to service the property and all your debts don’t exceed 44% of your gross income.

Alternative lending

As independent mortgage professionals, our job is to provide solutions and strategies for our clients. As such, in addition to dealing with many traditional lending institutions, we also have access to lenders who specialize in working with clients whose financial situation isn't all that straightforward. These private lenders offer alternative lending solutions that consider the overall strength of your mortgage application.

While you won’t qualify for the best rates and terms on the market by going with an alternative lender, if you’re looking for options, you might find that alternative lending is a very reasonable solution for you. Alternative lending isn’t for everyone, but it’s an excellent solution for some, especially if you’ve gone through a bankruptcy or consumer proposal and need a mortgage before fully establishing your credit.

Get in touch anytime.

So whether you’re looking for a plan to help you qualify for a mortgage with the most favourable terms or if you need something more immediate. Please connect anytime. It would be a pleasure to outline your options and work on a plan to get you a mortgage.

Mortgage Options for Older Canadians

Thu, 17 Jul 2025 07:15:03 GMT

Although it’s ideal to have your mortgage paid off by the time you retire, that isn’t always possible in today’s economy. The cost of living is considerably higher than it has ever been, and as a result, many Canadians are putting off retirement, hoping to make just a bit more money to add to that nest egg.

So if you find yourself in the position where you’re considering your mortgage options into retirement, you’ve come to the right place.

The advantage of working with an independent mortgage professional instead of a single bank is choice. When you work with an independent mortgage professional, you won’t be limited to an individual institution’s products; rather, you will have access to considerably more options.

Here are some options available to older Canadians as they plan for mortgage financing through their retirement.

Standard Mortgage Financing

If you’ve got a steady income, decent credit, and equity in your home, there is no reason you shouldn’t qualify for standard mortgage financing, which usually comes at the lowest interest rates and best terms. Some lenders use pension and retirement income to support your mortgage application even if you’ve already retired.

Reverse Mortgage Financing

A reverse mortgage allows Canadian homeowners 55 years and older to borrow money from their homes with no proof of income, no credit check, and no health questions. A reverse mortgage is a fabulous mortgage solution that has helped thousands of older Canadians enhance their lifestyle.

Home Equity Line of Credit (HELOC)

A line of credit secured to the equity you have in your home is an excellent tool to allow you to access money when you need it but not pay interest if you don’t need it. Many older Canadians like the idea of rolling all their expenses and income into one account.

Private Financing

If you happen to be in a bit of a tight spot, you have a plan but need a financial solution; private financing might be the answer. Indeed not the first choice for many because of the higher interest rates. However, private financing can provide you with options where a traditional bank can’t.

If you have any questions about securing mortgage financing for your retirement, please connect anytime. It would be a pleasure to work with you and walk you through all your options.

Buying a Vacation Home? Here’s What You Need to Know

Wed, 16 Jul 2025 08:30:00 GMT

The idea of owning a vacation home—your own cozy escape from everyday life—is a dream many Canadians share. Whether it’s a lakeside cabin, a ski chalet, or a beachside bungalow, a second property can add lifestyle value, rental income, and long-term wealth. But before you jump into vacation home ownership, it’s important to think through the details—both financial and practical.

Start With Your 5- and 10-Year Plan

Before you get swept away by the perfect view or your dream destination, take a step back and ask yourself:

Will you use it enough to justify the cost?
Are there other financial goals that take priority right now?
What’s the opportunity cost of tying up your money in a second home?

Owning a vacation home can be incredibly rewarding, but it should fit comfortably within your long-term financial goals—not compete with them.

Financing a Vacation Property: What to Consider

If you don’t plan to pay cash, then financing your vacation home will be your next major step. Mortgage rules for second properties are more complex than those for your primary residence, so here’s what to think about:

1. Do You Have Enough for a Down Payment?

Depending on the type of property and how you plan to use it, down payment requirements typically range from 5% to 20%+ . Factors like whether the property is winterized, the purchase price, and its location all come into play.

2. Can You Afford the Additional Debt?

Lenders will calculate your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to assess whether you can take on a second mortgage.

GDS: Should not exceed 39% of your income
TDS: Should not exceed 44%

If you’re not sure how to calculate these, that’s where I can help!

3. Is the Property Mortgage-Eligible?

Remote or non-winterized properties, or those located outside of Canada, may not qualify for traditional mortgage financing. In these cases, we may need to look at creative lending solutions .

4. Owner-Occupied or Investment Property?

Whether you’ll live in the home occasionally, rent it out, or use it strictly as an investment affects what type of financing you’ll need and what your tax implications might be.

Location, Location… Logistics

Choosing the right vacation property is more than just finding a beautiful setting. Consider:

Current and future development in the area
Available municipal services (sewer, water, road maintenance)
Transportation access – how easy is it to get to your vacation home in all seasons?
Resale value and long-term potential
Seasonal access or weather challenges

What Happens When You’re Not There?

Unless you plan to live there full-time, you'll need to consider:

Will you rent it out for extra income?
Will you hire a property manager or rely on family/friends?
What’s required to maintain valid home insurance while it’s vacant?

Planning ahead will protect your investment and give you peace of mind while you’re away.

Not Sure Where to Start? I’ve Got You Covered.

Buying a vacation home is exciting—but it can also be complicated. As a mortgage broker, I can help you:

Understand your financial readiness
Calculate your GDS/TDS ratios
Review down payment and lending requirements
Explore creative solutions like second mortgages , reverse mortgages , or alternative lenders

Whether you’re just starting to dream or ready to take action, let’s build a plan that gets you one step closer to your ideal getaway.

Reach out today—it would be a pleasure to work with you.

How to Withdraw from Your FHSA for a Down Payment

Mon, 14 Jul 2025 20:30:52 GMT

The First Home Savings Account (FHSA) is a fantastic way to save for your down payment tax free. It’s easy enough to open one but where most people have questions is when it comes to the withdrawal.

Here’s a simple breakdown so you know exactly how to take money out of your FHSA tax-free for your first home.

What Is the First Home Savings Account (FHSA)?

The FHSA is a federal savings program designed to help Canadians buy their first home. It combines the tax advantages of both an RRSP and a TFSA:

Contributions are tax-deductible (like an RRSP).
Withdrawals (including investment growth) are tax-free when used for a qualifying home (like a TFSA).

Contribution limits:

Up to $8,000 per year.
Lifetime maximum of $40,000 .
Unused annual room carries forward (up to $8,000).

Couples can each have their own FHSA, effectively doubling the savings power.

How the Withdrawal Works

Step 1: Check Your Eligibility

You must be a first-time homebuyer (neither you nor your spouse/common-law partner owned and lived in a home in the year of withdrawal or the previous four calendar years).
You must have a written agreement to buy or build a qualifying home in Canada.
You must intend to occupy the home as your principal residence within one year.

Step 2: Complete the CRA Form

Use Form RC725 – Request to Make a Qualifying Withdrawal from your FHSA.
One form is required for each institution if you have multiple FHSAs.

Step 3: Submit the Form to Your Financial Institution

Your FHSA provider will review the form and process your withdrawal.
Funds must be paid directly to you (not to a third party).

Step 4: Receive the Funds

Once approved, money is typically deposited into your account within a few business days.
Plan ahead so funds are available well before your closing date.

When Should You Start the Withdrawal?

Timing matters:

You can only withdraw after your offer has been accepted.
Ideally, wait until after subject removal in case you don’t end up removing subjects.
If the funds are needed for the deposit or you have a very quick closing , you can request the withdrawal before subject removal — just make sure you’re comfortable with that risk.
As a rule of thumb, start the process at least 5–7 business days before you need the money.

Important Considerations

15-year limit : You must use the FHSA within 15 years of opening it (or by the year you turn 71). Otherwise, funds must be transferred to an RRSP/RRIF or withdrawn (and taxed).
Eligible uses only : Withdrawals must be for a qualifying home purchase. If you withdraw for another purpose, it becomes taxable income.
Plan your timing : Processing can take a few days. Start early to avoid closing delays.

Quick Summary

FHSA = tax-deductible contributions + tax-free withdrawals for a first home.
Withdrawals require Form RC725 and a written purchase/building agreement.
Up to $40,000 per person can be contributed.
Must be used within 15 years (or by age 71).
Can be combined with RRSP HBP for maximum savings.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Glossary

FHSA (First Home Savings Account): A federal savings program allowing tax-deductible contributions and tax-free withdrawals for a first home purchase.
Form RC725: The CRA form required to make a qualifying FHSA withdrawal.
Home Buyers’ Plan (HBP): A separate program that lets first-time buyers withdraw up to $60,000 from their RRSP tax-free for a home purchase.

Deciphering the Latest Housing Affordability Initiatives in Canada

Thu, 10 Jul 2025 07:15:03 GMT

In recent years, housing affordability has become a significant concern for many Canadians, particularly for first-time homebuyers facing soaring prices and strict mortgage qualification criteria. To address these challenges, the Canadian government has introduced several housing affordability measures. In this blog post, we'll examine these measures and their potential implications for homebuyers.

Increased Home Buyer's Plan (HBP) Withdrawal Limit

Effective April 16, the Home Buyer's Plan (HBP) withdrawal limit will be raised from $35,000 to $60,000. The HBP allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use towards a down payment on a home. By increasing the withdrawal limit, the government aims to provide young Canadians with more flexibility in saving for their down payments, recognizing the growing challenges of entering the housing market.

Extended Repayment Period for HBP Withdrawals

In addition to increasing the withdrawal limit, the government has extended the repayment period for HBP withdrawals. Individuals who made withdrawals between January 1, 2022, and December 31, 2025, will now have five years instead of two to begin repayment. This extension provides borrowers with more time to manage their finances and repay the withdrawn amounts, alleviating some of the immediate financial pressures associated with using RRSP funds for a down payment.

30-Year Mortgage Amortizations for Newly Built Homes

Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. This change extends the maximum mortgage repayment period from 25 years to 30 years, resulting in lower monthly mortgage payments. By offering longer amortization periods, the government aims to increase affordability and assist homebuyers in managing their housing expenses more effectively.

Changes to the Canadian Mortgage Charter

The government has also introduced changes to the Canadian Mortgage Charter to provide relief to homeowners facing financial challenges. These changes include early mortgage renewal notifications and permanent amortization relief for eligible homeowners. By implementing these measures, the government seeks to support homeowners in maintaining affordable mortgage payments and mitigating the risk of default during times of financial hardship.

The recent housing affordability measures announced by the Canadian government are aimed at addressing the challenges faced by homebuyers in today's market. These measures include increasing withdrawal limits, extending repayment periods, and offering longer mortgage amortizations. The goal is to make homeownership more accessible and affordable for Canadians across the country.

As these measures come into effect, it's crucial for homebuyers to stay informed about the changes and their implications. Consulting with a mortgage professional can help individuals explore their options and make informed decisions about their housing finances.

If you're interested in learning more about these changes and how they may affect you, please don't hesitate to connect with us. We're here to walk you through the process and help you consider all your options and find the one that makes the most sense for you.

Make the Most of Summer: Outdoor Project Ideas for Every Space

Wed, 09 Jul 2025 08:30:00 GMT

Summer in Canada is short—but sweet. With warm weather and long evenings, it’s the perfect time to get outside and enjoy your outdoor space, no matter how big (or small) it is. Whether you have a tiny patio or a sprawling backyard, a few creative upgrades can go a long way toward turning your space into your personal summer oasis.

Below are ideas for every type of outdoor space, from cozy balconies to large backyards!

For Patio-Only Spaces

Limited to a balcony or concrete patio? No problem! Small spaces can still offer big enjoyment.

1. Upgrade the Flooring
Add interlocking tiles to give your concrete floor a more polished look—wood grain, grass panels, or composite styles are all popular, easy-to-install options.

2. Create an Outdoor Movie Zone
Hang a pull-down screen or grab a portable stand, pair it with a mini projector, and voilà—your very own outdoor movie theatre under the stars!

3. Start an Herb Garden
Railing planters are perfect for growing basil, mint, parsley, and more. Fresh herbs at your fingertips—and they smell amazing too!

4. Add Some Twinkle
Wrap fairy lights around your railing or overhead beams to bring cozy vibes and nighttime charm.

5. Grill Like a Pro
Maximize your BBQ season with a compact baby-que. Weber’s Q Series is a great option for small spaces without compromising grilling power.

For Small Yards

A little yard can still pack a lot of personality. Here are ways to make the most of every square foot:

1. Game Time!
Add a mini putting green or an axe-throwing target (just be safe!) for quick bursts of backyard fun that don’t take up much space.

2. Warm Up Your Nights
Add a heating lamp or portable fire bowl to keep your evenings cozy well into the fall.

3. Grow Your Own Produce
Build or buy a raised garden box to grow tomatoes, cucumbers, lettuce, or other easy vegetables. Gardening is relaxing—and delicious!

4. DIY Bird Bath
Make a pedestal bird bath using an old vase, a platter, and strong glue. You likely have everything you need already at home—and the local birds will thank you!

For Big Yards

If space isn’t an issue, the sky’s the limit! Here are some larger-scale projects to take your yard to the next level:

1. Build a Catio
Yep, it’s a “cat patio”! Give your feline friends a safe way to enjoy the outdoors with a screened-in enclosure attached to your home.

2. Create a Permanent Fire Pit
Use stones and a fire ring to build a beautiful, safe fire pit. You can even add airflow cutouts to reduce smoke—perfect for those marshmallow roasts!

3. Tile a Dining Area
Install paving stones or tiles to define an outdoor dining space. Add a table, some string lights, and enjoy al fresco meals all summer long.

Need More Inspiration?

If none of these projects quite fit your vision, check out Home Depot’s DIY backyard ideas—complete with step-by-step instructions and material lists to help you bring your outdoor dreams to life.

Soak It Up While It Lasts

No matter the size of your space, there’s always something you can do to enhance your outdoor experience. So get out there, get creative, and make the most of these sunny summer days.

See you back here in August—with more tips, tricks, and homeowner insights!

Purchase Plus Improvements: Turn a Good Home into Your Dream Home

Tue, 08 Jul 2025 07:15:02 GMT

In today’s housing market, finding a home that checks every box can feel nearly impossible. Maybe the location is ideal, but the kitchen feels dated. Or perhaps the layout is right, but the basement needs finishing. That’s where a Purchase Plus Improvements mortgage comes in—it allows you to buy the house you want and roll the cost of renovations into one simple mortgage. It can even help you qualify for a more expensive home if you use the improvements to add a suite.

What is a Purchase Plus Improvements Mortgage?

A Purchase Plus Improvements mortgage combines the cost of buying a home with the cost of planned renovations, all in one mortgage. Instead of arranging separate financing (like a line of credit), you borrow the funds upfront based on the home’s value after renovations are complete.

How Does It Work?

Here’s the general process:

Get Contractor Quotes: Before applying, you’ll need detailed quotes for the renovations you want.
Apply for the Mortgage: Your down payment is based on the improved property value (purchase price + renovations, or the appraised improved value—whichever is lower).
Close on the Home: At possession, the seller is paid as usual. The renovation funds are held back by the lender.
Complete the Work: You typically have 90–120 days to finish renovations.
Inspection & Fund Release: Once work is confirmed as complete, the lender releases the funds (sometimes in stages for larger projects).

Eligible Renovations

Examples of upgrades typically allowed include:

Kitchen or bathroom remodels
Flooring and windows
Roof replacement or repairs
Furnace/air conditioning upgrades
Electrical or plumbing updates (like replacing knob-and-tube wiring)
Basement finishing or waterproofing
Septic system upgrades
Decks, patios, or additions
Adding a rental suite (potential rental income may even help with qualification)

Important Details

Improvement Costs: Usually $5,000 minimum and up to $100,000.
Down Payment: Minimum based on the improved value. 5% of the first $500k;
10% between $500k and $1.5m
Timeline: Renovations must typically be completed within 90–120 days of possession.
Payment Flexibility: For smaller projects (<$40k), you submit invoices for reimbursement. For larger ones, lenders may pay contractors directly in stages.
Rates: You get the lenders best rates, nothing extra
Mortgage Insurance: The most competitive programs are insured, meaning they must meet insurer criteria (owner-occupied, income guidelines, etc.). With more than 20% down, uninsured options are possible.

Key Benefits

One Simple Payment: Combine purchase and renovation costs into a single mortgage.
Lower Cost Than a Line of Credit: Renovation funds in the mortgage amortize over time, unlike an interest-only LOC.
Customization: Create the home you want right away instead of “making do.”
Qualification Help: Adding a rental suite? Future rental income may help you qualify for a larger mortgage.

Important Considerations

You need to pay contractors upfront or arrange financing until funds are released.
DIY projects are limited, lenders will only reimburse materials, not your labour.
If you skip renovations after funding, the renovation funds stay in the mortgage (applied to your principal), but your payment remains the same.

Quick Summary

• Purchase + Reno in One: Finance both with a single mortgage.
• Improvement Range: $5,000–$100,000 allowed.
• Upfront Quotes Needed: Contractor estimates required before approval.
• Timeline: 90–120 days to complete the work.
• Better Cash Flow: Often cheaper than using a line of credit.

Next Steps

If you’re house-hunting and finding “almost perfect” homes that just need some updates, a Purchase Plus Improvements mortgage could make all the difference.

If you have questions or want to see if this option fits your situation, I’d be happy to walk you through it.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Mortgage Term Glossary

Amortization: The total length of time it will take to fully repay your mortgage (usually 25–30 years in Canada).

Down Payment: The upfront portion you pay when purchasing a home, usually a percentage of the purchase price.

Equity: The difference between your home’s value and what you owe on your mortgage.

Improved Value: The appraised value of a home after planned renovations are completed.

Line of Credit (LOC): A flexible loan where you only pay interest on the amount borrowed. Often used for renovations, but payments are usually interest-only.

Pre-approval: A budget put together by your mortgage broker to show what you can afford.

Purchase Plus Improvements: A mortgage program that lets you finance both the purchase price and renovation costs in one loan.

Stress Test: A rule requiring borrowers to qualify at a higher rate than their actual mortgage rate, ensuring they can handle future increases.

Can you Trust Online Mortgage Calculators?

Thu, 26 Jun 2025 07:15:01 GMT

You’d think an online calculator is a pretty straightforward device, one that you should be able to place your confidence in, and for the most part, they are. Calculators calculate numbers. The numbers are reliable, but how you interpret those numbers, not so much, especially if the goal is mortgage qualification.

If you rely on the numbers from a “What can I afford” or “Mortgage Qualification” calculator without talking to an independent mortgage professional, you’re going to be misinformed.

Don’t be fooled. Even though an online mortgage calculator can help you calculate mortgage payments or help you assess how additional payments would impact your amortization, they’ll never be able to give you an exact picture of what you can afford and how a lender will consider your mortgage application.

While mortgage calculators are objective, mortgage lending isn’t. It’s 100% subjective. Lenders consider your financial situation, employment, credit history, assets, liabilities, the property you are looking to purchase. Then, they will compare that with whatever internal risk profile they are currently using to assess mortgage lending. Simply put, they don’t just look at the numbers.

An online calculator is a great tool to help you run different financial scenarios and help assess your comfort level with different payment schedules and mortgage amounts. However, if you rely on an online calculator for mortgage qualification purposes, you’ll be disappointed.

The first step in the mortgage qualification process is a preapproval. A preapproval will examine all the variables on your application, assess your financial situation, and provide you with a framework to buy a property based on your unique circumstance.

Securing a preapproval comes at no cost to you and without any obligation to buy. It’ll simply allow you the freedom to move ahead with confidence, knowing exactly where you stand. Something a calculator is unable to do.

Please connect anytime if you’d like to talk more about your financial situation and get a preapproval started. It would be a pleasure to work with you.

First-Time Homebuyer? A New GST Rebate Could Put Thousands Back in Your Pocket

Fri, 20 Jun 2025 23:22:07 GMT

If you’re a first-time homebuyer eyeing a new build or major renovation, there's encouraging news that could make homeownership significantly more affordable.

The federal government has proposed a new GST rebate aimed at easing the financial burden for Canadians entering the housing market. While still awaiting parliamentary approval, the proposed legislation offers the potential for thousands in savings —and could be a game-changer for buyers trying to break into today’s high-cost housing landscape.

What’s Being Proposed?

Under the new legislation, eligible first-time homebuyers would receive:

A full GST rebate on homes priced up to $1 million
A partial GST rebate on homes between $1 million and $1.5 million

This could mean up to $50,000 in tax savings on a qualifying home—a major boost for anyone working hard to save for a down payment or meet mortgage qualification requirements.

Why This Matters

With interest rates still elevated and home prices holding steady in many regions, affordability remains a challenge. This rebate could offer meaningful relief in several ways:

Lower Upfront Costs: Removing GST from the purchase price reduces the total amount of money buyers need to save before closing.
Smaller Monthly Payments: A lower purchase price leads to a smaller mortgage, which translates to more manageable monthly payments.
Improved Mortgage Qualification: With a reduced purchase amount, buyers may find it easier to meet lender criteria.

According to recent estimates, a homebuyer purchasing a $1 million new home could see monthly mortgage payments drop by around $240 —money that could go toward savings, home improvements, or simply everyday expenses.

Helping Families Help Each Other

This proposal also offers a win for parents who are supporting their children in buying a first home. Whether through gifted down payments or co-signing, a lower purchase price and more affordable monthly costs mean that family support can go further—and set first-time buyers up for long-term success.

Is This the Right Time to Buy?

If you’re thinking about buying a new or substantially renovated home, this proposed rebate could dramatically improve your financial position. Now is the perfect time to explore your options and make sure your mortgage strategy is aligned with potential policy changes.

�� Let’s connect for a free mortgage review or pre-approval. Whether you’re buying your first home or helping someone else take that first step, I’m here to help you make informed, confident decisions.

Protect Your Credit Through a Divorce

Thu, 19 Jun 2025 07:15:04 GMT

Divorces are challenging as there’s a lot to think about in a short amount of time, usually under pressure. And while handling finances is often at the forefront of the discussions related to the separation of assets, unfortunately, managing and maintaining personal credit can be swept aside to deal with later.

So, if you happen to be going through or preparing for a divorce or separation, here are a few considerations that will help keep your credit and finances on track. The goal is to avoid significant setbacks as you look to rebuild your life.

Manage Your Joint Debt

If you have joint debt, you are both 100% responsible for that debt, which means that even if your ex-spouse has the legal responsibility to pay the debt, if your name is on the debt, you can be held responsible for the payments. Any financial obligation with your name on the account that falls into arrears will negatively impact your credit score, regardless of who is legally responsible for making the payments. A divorce settlement doesn’t mean anything to the lender.

The last thing you want is for your ex-spouse’s poor financial management to negatively impact your credit score for the next six to seven years. Go through all your joint credit accounts, and if possible, cancel them and have the remaining balance transferred into a loan or credit card in the name of whoever will be responsible for the remaining debt.

If possible, you should eliminate all joint debts. Now, it’s a good idea to check your credit report about three to six months after making the changes to ensure everything all joint debts have been closed and everything is reporting as it should be. It’s not uncommon for there to be errors on credit reports.

Manage Your Bank Accounts

Just as you should separate all your joint credit accounts, it’s a good idea to open a checking account in your name and start making all deposits there as soon as possible. You’ll want to set up the automatic withdrawals for the expenses and utilities you’ll be responsible for going forward in your own account.

At the same time, you’ll want to close any joint bank accounts you have with your ex-spouse and gain exclusive access to any assets you have. It’s unfortunate, but even in the most amicable situations, money (or lack thereof) can cause people to make bad decisions; you want to protect yourself by protecting your assets.

While opening new accounts, chances are your ex-spouse knows your passwords to online banking and might even know the pin to your bank card. Take this time to change all your passwords to something completely new, don’t just default to what you’ve used in the past. Better safe than sorry.

Setup New Credit in Your Name

There might be a chance that you’ve never had credit in your name alone or that you were a secondary signer on your ex-spouse’s credit card. If this is the case, it would be prudent to set up a small credit card in your name. Don’t worry about the limit; the goal is to get something in your name alone. Down the road, you can change things and work towards establishing a solid credit profile.

If you have any questions about managing your credit through a divorce, please don’t hesitate to connect anytime. It would be a pleasure to work with you.

Worried About Your Mortgage Renewal? You’re Not Alone

Wed, 18 Jun 2025 20:22:35 GMT

Worried About Your Mortgage Renewal? You’re Not Alone

If your mortgage renewal is coming up soon, you're likely feeling a bit of financial pressure—and you’re not the only one.

A recent survey shows that over half of Canadian homeowners believe their upcoming mortgage renewal could impact their current living situation. With interest rates still higher than what many borrowers locked in before 2022, 45% of those renewing in the next 12 months expect their monthly payments to increase.

Even though the Bank of Canada has held its key overnight rate steady at 2.75%, borrowing costs remain elevated compared to the low-rate years we saw earlier in the decade. And that’s changing how Canadians think about their finances.

Changing Plans and Tightening Budgets

Among those worried about their renewal, 73% say they’re already cutting back on discretionary spending—things like eating out, entertainment, or travel—to brace for higher mortgage payments.

For many, it goes deeper than just trimming the budget. Nearly one in four surveyed homeowners said they’re rethinking their entire financial strategy. Some are pressing pause on home renovations (43%), while others are considering downsizing or relocating to a more affordable area (29%). A smaller group (15%) is even open to major lifestyle changes, like moving in with roommates or relocating to a new neighbourhood altogether.

Fixed-Rate Mortgages on the Rise

In this climate, most homeowners looking to renew are leaning toward fixed-rate mortgages, with 75% preferring the stability of predictable payments. For those facing uncertainty, locking in a rate for the next few years can offer peace of mind—even if it means paying a little more in the short term.

First-Time Buyers Are Feeling It Too

It’s not just current homeowners feeling the pinch. A separate survey found that more than half of Canadians planning to buy a home are cutting back on non-essential spending to save for their down payment or other buying costs. About 31% are even considering tapping into savings or investment accounts like TFSAs, RRSPs, or first-time home savings accounts to make their purchase possible.

What This Means for You

Whether you’re preparing to renew or purchase for the first time, this environment calls for smart, strategic planning. You’re not alone in feeling uncertain—but with the right guidance, you can navigate these changes confidently.

Have questions about your upcoming renewal or wondering what type of mortgage is right for today’s market? Let’s connect. We're here to help you make informed, confident decisions about your home financing.

Understanding your Employment Status

Thu, 12 Jun 2025 07:15:06 GMT

Chances are if you’re applying for a mortgage, you feel confident about the state of your current employment or your ability to find a similar position if you need to. However, your actual employment status probably means more to the lender than you might think. You see, to a lender, your employment status is a strong indicator of your employer’s commitment to your continued employment.

So, regardless of how you feel about your position, it’s what can be proven on paper that matters most. Let’s walk through some of the common ways lenders can look at employment status.

Permanent Employment

The gold star of employment. If your employer has made you a permanent employee, it means that your position is as secure as any position can be. When a lender sees permanent status (passed probation), it gives them the confidence that you’re valuable to the company and that they can rely on your income.

Probationary Period

Despite the quality of your job, if you’ve only been with the company for a short while, you’ll be required to prove that you’ve passed any probationary period. Although most probationary periods are typically 3-6 months, they can be longer. You might now even be aware that you’re under probation.

The lender will want to make sure that you’re not under a probationary period because your employment can be terminated without any cause while under probation. Once you’ve made it through your initial evaluation, the lender will be more confident in your employment status.

Now, it’s not the length of time with the employer that the lender is scrutinizing; instead, it’s the status of your probation. So if you’ve only been with a company for one month, but you’ve been working with them as a contractor for a few years, and they’re willing to waive the probationary period based on a previous relationship, that should give the lender all the confidence they need. We’ll have to get that documented.

Parental Leave

Suppose you’re currently on, planning to be on, or just about to be done a parental leave, regardless of the income you’re now collecting, as long as you have an employment letter that outlines your guaranteed return to work position (and date). In that case, you can use your return to work income to qualify on your mortgage application. It’s not the parental leave that the lender has issues with; it’s the ability you have to return to the position you left.

Term Contracts

Term contracts are hands down the most ambiguous and misunderstood employment status as it’s usually well-qualified and educated individuals who are working excellent jobs with no documented proof of future employment.

A term contract indicates that you have a start date and an end date, and you are paid a specific amount for that specified amount of time. Unfortunately, the lack of stability here is not a lot for a lender to go on when evaluating your long-term ability to repay your mortgage.

So to qualify income on a term contract, you want to establish the income you’ve received for at least two years. However, sometimes lenders like to see that your contract has been renewed at least once before considering it as income towards your mortgage application.

In summary

If you’ve recently changed jobs or are thinking about making a career change, and qualifying for a mortgage is on the horizon, or if you have any questions at all, please connect anytime. We can work through the details together and make sure you have a plan in place. It would be a pleasure to work with you!

Incentives for First-Time Homebuyers

Wed, 11 Jun 2025 15:03:48 GMT

There are a lot of programs and incentives for first-time homebuyers, but it can be hard to keep track of them all.

Each one has its own rules, limits, and fine print—which makes it easy to feel confused or overlook something valuable.

In this post, I’ll break everything down clearly so you understand exactly what’s available and make sure you’re not missing out on any savings.

What Counts as a First-Time Homebuyer?

Before getting into the incentives, it helps to know what “first-time homebuyer” means for most of these programs:

You (or your spouse/common-law partner) haven’t owned a home that was your principal residence in the current year or in the 4 previous calendar years.
You plan to live in the home as your principal residence.

(Provincial/local programs may have additional or slightly different requirements.)

Federal Incentives for First-Time Homebuyers

1. First Home Savings Account (FHSA)

A registered account that combines the best of an RRSP and TFSA: contributions are tax-deductible, and withdrawals for your first home (including investment growth) are tax-free.

Annual limit: $8,000
Lifetime limit: $40,000
Unused annual room carries forward , so if you don’t contribute the full $8,000 in one year, you can catch up later.
Funds must be used within 15 years of opening the account or before age 71.

Important Note : Can be stacked with the Home Buyers’ Plan (HBP).

2. Home Buyers’ Plan (HBP)

Withdraw up to $60,000 from your RRSP to buy or build a qualifying home.

Repayment: spread over 15 years , starting the second year after withdrawal.
Contributions don’t affect your regular RRSP deduction limit if designated as HBP repayments.

3. GST/HST New Housing Rebate (First-Time Buyers GST Rebate – New in 2025)

For new or substantially renovated homes, first-time buyers may be eligible for a full or partial rebate on GST or the federal portion of HST.

Full rebate : Homes valued up to $1 million
Partial rebate : Homes between $1 million–$1.5 million (phased out linearly)
No rebate : Homes above $1.5 million
Potential savings: up to $50,000

Important Note: The federal government has announced this program, but as of now, we don’t yet have final details on how it will work in practice. More guidance is expected.

4. 30-Year Amortization for First-Time Buyers of Insured Mortgages

As of 2025, all first-time buyers with insured mortgages (less than 20% down) may qualify for a 30-year amortization.

Benefit: Lower monthly payments allowing for better cashflow or more purchasing power
Trade-off: More total interest paid over time

5. Home Buyers’ Amount (First-Time Home Buyers’ Tax Credit)

A non-refundable federal tax credit to help with closing costs such as legal fees, inspections, and appraisals.

Maximum claim: $10,000
Value: up to $1,500 back at tax time.

Provincial Incentive – British Columbia

First-Time Home Buyers’ Program (Property Transfer Tax Exemption)

In BC, first-time homebuyers may qualify for a full or partial exemption from the Property Transfer Tax (PTT) .

What is PTT?
1% on the first $200,000 of fair market value (FMV)
2% on FMV between $200,000–$2,000,000
3% on FMV above $2,000,000
Exemptions:
Full exemption if FMV is $500,000 or less
Partial exemption between $500,000–$835,000
No exemption if FMV is $860,000 or more
Eligibility Criteria:
Canadian citizen or permanent resident
Filed at least 2 income tax returns as a BC resident in the last 6 years
Never previously owned a principal residence anywhere in the world
Must move in and make the property your principal residence

This program alone can save buyers up to $8,000 on closing costs.

Real-World Example

Let’s say you’re buying a $800,000 home in BC :

You use your FHSA savings , withdrawn tax-free.
You withdraw $40,000 from your RRSP under the Home Buyers’ Plan .
You save $8,000 on BC’s property transfer tax (since the home is above $500,000 but below $860,000).
You also claim the Home Buyers’ Tax Credit = $1,500 .

Total savings : Tens of thousands between rebates, exemptions, and tax advantages—bringing homeownership closer within reach.

Potential Savings – At a Glance

Quick Summary

FHSA: Save up to $40,000, tax-deductible in, tax-free out
HBP : Withdraw up to $60,000 from RRSP, repay over 15 years
Home Buyers’ Tax Credit : Up to $1,500 tax reduction
GST Rebate : Up to $50,000 on new builds under $1.5M (pending details)
30-Year Amortization : Lower monthly payments on insured mortgages for all FTHBs
BC PTT Exemption : Up to $8,000 in tax savings

Next Steps

Check eligibility: Federal vs BC programs differ slightly.
Plan savings early : Use FHSA + RRSP contributions strategically.
Run the numbers : GST rebate and PTT thresholds can make or break affordability.
Talk with a mortgage broker : Ensure you’re combining incentives properly and not leaving money on the table.

Need help navigating these programs? Book a consultation or call 778-988-8409 .

Mortgage Term Glossary

Amortization: The total length of time to fully repay your mortgage (typically 25–30 years).

Down Payment: The upfront amount you pay toward the purchase price of a home, typically expressed as a percentage of the total price.

Equity: The difference between your home’s value and your outstanding mortgage balance.

FHSA (First Home Savings Account): A registered plan that allows tax-deductible contributions and tax-free withdrawals for your first home.

GST Rebate: A federal rebate for first-time buyers of new or substantially renovated homes, providing up to $50,000 back (pending government guidance).

HBP (Home Buyers’ Plan): A program allowing you to withdraw up to $60,000 from your RRSP for a down payment, repayable over 15 years.

Mortgage Term: The contract period for your mortgage rate and conditions (usually 1–5 years).

PTT (Property Transfer Tax): A provincial tax charged in BC when registering your home’s title; exemptions are available for first-time buyers.

RRSP (Registered Retirement Savings Plan): A registered savings plan where contributions are tax-deductible and investment growth is tax-deferred.

How to Withdraw from Your RRSP For a Down Payment (as a First Time Buyer)

Thu, 29 May 2025 07:15:06 GMT

Buying your first home is exciting—but figuring out how to pull money from your RRSP for a down payment can feel confusing. The Home Buyers’ Plan (HBP) lets you use your retirement savings without tax penalties, but the withdrawal rules are specific.

Here’s a simple breakdown so you know exactly what to do and don’t miss a step.

What Is the Home Buyers’ Plan (HBP)?

The HBP is a federal program that allows eligible Canadians to use up to $60,000 from their RRSP for the purchase or construction of a qualifying home.

Each individual can withdraw up to $60,000.
Couples can each participate, meaning up to $120,000 may be available for a down payment.

How the Withdrawal Works

Step 1: Check Your Eligibility
You must be a first-time homebuyer (or qualify under the rules for a specified disabled person).
You must have a written agreement to buy or build a qualifying home.
You must be a resident of Canada when you withdraw the funds.
Step 2: Fill Out the Form
Use Form T1036 – Home Buyers’ Plan (HBP) Request to Withdraw Funds from an RRSP .
Download it here: Form T1036 (CRA) .
If you’re withdrawing from multiple RRSP accounts, a separate form is needed for each one.
Step 3: Submit the Form to Your Financial Institution
Your RRSP provider will complete their part of the form and process the withdrawal.
Step 4: Receive the Funds
It can take up to 5 business days (sometimes longer) for the money to reach your account.
Plan ahead — I always recommend starting the process early so the funds are available well before you need them.

Benefits

Tax-free withdrawal (if you follow the repayment rules).
Larger down payment without needing taxable withdrawals or additional loans.
Flexible repayment over up to 15 years , interest-free.

Important Considerations

Repayments are mandatory — each year (starting the second year after your withdrawal) you must repay at least 1/15 of the amount withdrawn. If you don’t, that portion will be added to your taxable income.
89-day rule — RRSP contributions must be on deposit for at least 89 days before you can withdraw them under the HBP.
Plan your timing — since institutions may take several days to release funds, don’t wait until the last minute.

Next Steps

If you’re planning to use your RRSP for your first home:

Confirm your eligibility.
Download and complete Form T1036 .
Request your withdrawal early to avoid delays.

Need help with your mortgage? Book a consultation or call 778-988-8409 .

Glossary

Home Buyers’ Plan (HBP): A federal program that lets first-time buyers withdraw up to $60,000 from their RRSP tax-free for a home purchase.
RRSP (Registered Retirement Savings Plan): A government-registered account that allows Canadians to save for retirement with tax advantages.
Form T1036: The official CRA form required to withdraw RRSP funds under the HBP.

Understanding Your Pre-Approval: What to Do Now and What Happens Next

Wed, 28 May 2025 22:40:31 GMT

Congratulations! You've received your pre-approval and you're ready to start shopping. But you might have questions: What does this pre-approval actually mean? How do you use it? What happens when you find a property?

This guide explains everything you need to know now that you're pre-approved.

What Your Pre-Approval Means

Your pre-approval is my expert analysis of what you'll qualify for, based on:

Thorough verification of your income, down payment, debts, and credit
My in-depth knowledge of lender guidelines and policies across 50+ lenders
Current interest rates and mortgage products
Analysis performed the same way a lender's underwriter will review your file

Important: At this stage, no lender has formally reviewed your file. That happens only after you have an accepted offer.

Why You Can Shop with Confidence

You might wonder: "If a lender hasn't seen my file, how can I trust this?"

I analyze your file the exact same way a lender will. I understand what each lender looks for, how they calculate income, what down payment sources they accept, and their credit requirements.

I catch issues before they become problems. By thoroughly reviewing everything myself, I identify concerns early when we have time to address them, not when you're under pressure with an accepted offer.

I take responsibility for accuracy. When I tell you what you're pre-approved for, I'm putting my professional reputation behind that assessment.

This approach gives you flexibility. Once you find your property, we can choose the optimal lender for your specific situation rather than being locked into one from the start.

After Your Pre-Approval

Now that you're pre-approved, here's what you need to know while shopping:

Share Your Budget With Your Realtor

Let your realtor know your price range so they can focus on suitable properties.
Tip: Your comfortable budget and your maximum pre-approval amount are not the same thing. Many clients choose to stay below their maximum to keep room for:

Unexpected costs or repairs
Furniture or moving expenses
Comfortable monthly cash flow
Future flexibility

Do Not Take On New Debt

This is critical. Avoid applying for or taking on any new credit, including:

Car loans or leases
New credit cards or “store savings” cards
Furniture or appliance financing
Personal loans
Co-signing for someone else’s debt
Increasing credit limits

Why it matters: Every $100 in new monthly payments can reduce your mortgage borrowing power by about $13,500 . A $400 car payment could lower your maximum purchase price by more than $50,000.

When in doubt, call me first before financing anything new.

Other Changes to Avoid

Large withdrawals from your down payment funds
Job changes or switching to commission-based income
Big purchases on credit (even if you plan to pay them off)
Co-signing for someone else’s loan

A simple call before making a financial move can prevent major delays or lost opportunities.

Pre-Approval Validity

Your pre-approval stays accurate as long as:

Your income, employment, debts, and credit remain the same
Interest rates don't change dramatically
Lender policies remain consistent

If rates or lender policies shift significantly, I’ll contact you to review and update your numbers.

Rate Protection

If you’re worried about interest rates increasing while you shop, we can look at setting up a rate hold.

What’s a rate hold?

A rate hold is a commitment from a lender to lock in a rate for up to 120 days. If rates rise, you’re protected. If rates fall, you’ll get the lower market rate instead.

When does it make sense?

Rate holds are most useful when:

Rates are expected to increase in the near future
You’re close to your maximum budget and even a small rate increase could affect your approval
You simply want peace of mind about potential rate changes

My Approach

Rate holds don’t lock you in permanently with that lender, but they can limit flexibility because the lender, term and rate type has to be selected upfront. More importantly, rate hold rates are usually higher than current market rates, so I only recommend one if it looks like rates will rise significantly.

In a rising rate environment, a rate hold makes sense and becomes standard practice. In a flat or declining rate market, it usually isn’t necessary.

Questions Always Welcome

Want to discuss different scenarios? Found a property that's slightly outside what we discussed? Need to run numbers on a specific home? Wondering if a financial decision will affect your approval? I'm always available.

When You Find Your Home

Here's exactly what happens when you're ready to make an offer:

Step 1: Give Me a Heads Up

Share the property address and details
I'll confirm it fits within your pre-approval
I'll flag any special considerations for that property type

Step 2: Your Realtor Includes a Financing Condition

Your offer should include a "subject to financing" condition. This protects you if financing cannot be secured. Standard condition periods are 5-10 days.

Step 3: I Submit Your Application to the Optimal Lender

Once your offer is accepted:

I evaluate the best lenders and options for your situation and this specific property
We have a call to go through the options and finalize the lender and mortgage product that you want.
I submit your complete application with all documentation

Step 4: The Lender Reviews and Provides Conditional Approval

The lender examines everything I've already verified
They may request additional clarification or documents
Usually issue conditional approval within 1-3 days

Step 5: We Clear Any Conditions

Provide any additional items the lender requested
Complete property appraisal if needed
Typically 3-7 days total

Step 6: You Receive Full Approval

All conditions satisfied
You're fully approved
You can remove your financing condition with confidence

Step 7: Closing

Your mortgage funds
You get the keys to your new home

Because I've already thoroughly analyzed your file, this process typically goes smoothly with few surprises.

Common Questions

What if something about the property affects lending?

Some properties require special financing (e.g., certain condos, properties with rental suites, unique property types). When you share property details with me before making an offer, I'll flag any special considerations and ensure we're targeting the right lenders.

What if I accidentally applied for new credit?

Contact me immediately. Depending on the timing and amount, it may or may not affect your approval. The sooner I know, the better I can help you manage any impacts.

What if I want to look at properties above my pre-approved amount?

Let's talk. Sometimes there are ways to increase your purchasing power (larger down payment, co-signer, etc.). Other times, it's better to stay within budget. I'll give you honest advice about what's realistic.

Can my pre-approval be denied when we go to a lender?

This is extremely rare when I've done thorough analysis and your situation hasn't changed. If it happens, it's usually because something changed (new debt, job change) or there was undisclosed information. My full underwriting process minimizes this risk.

Your Next Steps

Start shopping: You're ready to look for homes with your realtor. Share your comfortable budget with them (which may be less than your maximum pre-approval).

Protect your approval: Don't take on any new debt or make major financial changes. When in doubt, call me first.

Rate protection: If you're concerned about rates increasing, let's discuss whether a rate hold makes sense.

Found something? Give me a heads up before making an offer so I can confirm it fits your pre-approval.

Questions? I'm always available to discuss scenarios, properties, or any concerns.

Glossary

Pre-Approval: My professional review of what you qualify for, based on verified finances and lender guidelines.

Conditional Approval: A lender’s preliminary approval pending document or property verification.

Financing Condition: A clause in your offer that protects you if financing cannot be secured.

Lender: A financial institution that provides mortgage financing. This can be a bank, credit union, monoline lender, or other regulated lending institution.

Lender Approval: The lender’s final commitment after full review of your application and property.

Rate Hold: A rate guarantee (usually 120 days) that protects you from increases while you shop.

If You’re Looking to Sell Your Property, Start Here

Thu, 22 May 2025 07:15:03 GMT

If you’ve been thinking about selling your existing property, for whatever reason, it would be in your best interest to connect with an independent mortgage professional before calling your real estate agent or listing it yourself.

And while talking with your mortgage professional might not sound like the most logical place to start, here are a few scenarios that explain why it makes the most sense.

If you’re buying a new property

If you’re selling your property, chances are, you’ll have to move somewhere! So, if you plan on buying a new property using the equity from the sale of your existing property, chances are you’ll need a new mortgage.

Don’t assume that just because you’ve secured mortgage financing before, that you’ll qualify again. Mortgage rules are constantly changing; make sure you have a pre-approval in place before you list your property.

Also, by connecting with a mortgage professional first, you can look into your existing mortgage terms. You might be able to port your mortgage instead of getting a new one, which could save you some money.

If you’re not buying a new property

Even if you aren’t buying a new property and want to sell your existing property, it’s still a good idea to connect with a mortgage professional first, as we can look at the cost of breaking your mortgage together.

Unless you have an open mortgage, or a line of credit, there will be a penalty to break your mortgage. The goal is to work on a plan to minimize your penalty. Because of how mortgage penalties work, sometimes it’s just a matter of waiting a few months to save thousands. You'll never know unless you take a look at the details.

Marital breakdown

The simple truth is that marriages break down. When that happens, often, people want closure, and unfortunately, they make decisions without really thinking them through or seeing the full picture. So, instead of simply selling the family home because that feels like the only option, please know that special programs exist that allow one party to buy out the former spouse. The key here is to have a legal separation agreement is in place.

If you’d like to discuss the sale of your property and your plans for the future, connect anytime. It would be a pleasure to work with you!

Downpayment Options

Thu, 15 May 2025 07:15:07 GMT

Your downpayment refers to the initial payment you make when buying a property through mortgage financing. A downpayment is always required when purchasing, because in Canada, lenders are only allowed to lend up to 95% of the property value, leaving you with the need to come up with at least 5% for a downpayment.

In fact, securing mortgage financing with anything less than 20% down is only made possible through mortgage default insurance. Canada has three default insurance providers: the Canadian Mortgage and Housing Corporation (CMHC), Sagen (formerly Genworth Canada), and Canada Guaranty. There is a cost for default insurance which is usually rolled into the total mortgage amount and is tiered depending on how much you put down.

As your downpayment can be a significant amount of money, you probably need a plan to put this money together. So, let’s take a look at some of the options you have to come up with a downpayment.

Money from your resources

If you’ve been saving money and have accumulated the funds and set them aside for to use for your downpayment, you'll need to prove a 90-day history of those funds. As far as the lender is concerned, this is the most straightforward way to prove a downpayment.

Any large deposits to your bank account that aren’t from payroll will require you to prove the source of funds. For example, if you recently sold a vehicle, you’ll need to provide the paperwork as proof of ownership, which corresponds to your account’s deposit. Or, if you have funds in an investment account that you’ve transferred over, statements of that transfer or account would suffice.

You have to prove the source of your downpayment funds to the lender when qualifying for a mortgage to help prevent money laundering.

Funds from the sale of another property

If you’ve recently sold a property and you’re using the proceeds of that sale as the downpayment from your new purchase, you can provide the paperwork from that transaction to substantiate your downpayment.

RRSPs through the Home Buyer’s Plan

Okay, so let’s say you don’t have all the money set aside in your savings, but you do have cash in your RRSP. Assuming you’re a first-time homebuyer, you can access the funds from your RRSP Tax-Free to use as a downpayment.

You’re able to access up to $35k individually or $70k as a couple. The money has to be paid back over the next 15 years. If you’d like more information on what this program looks like, please get in touch.

Gifted downpayment

Now, if you don’t have enough money in your savings, but you have a family member who is willing to help, they can gift you funds for your downpayment. With the increased cost of living, making it harder to save for a downpayment, receiving a gift from a family member is becoming increasingly commonplace.

Now, to qualify, the gift has to come from an immediate family member who will sign a gift letter indicating there is no schedule of repayment and that the gift doesn’t have to be repaid. Proof that the money has been deposited into your account is required through bank statements.

Gifted funds can make up part of or the entire amount of downpayment. For example, if you purchase a property for $300k and have $10k saved up, your parents can gift you the remaining $5k to make up the total 5% downpayment.

Borrowed downpayment

Suppose you aren’t fortunate enough to have a family member who can gift you a downpayment, but you have excellent credit and a high income compared to the amount you’re looking to borrow. In that case, you might qualify to borrow part or all of your downpayment.

It’s possible to borrow your downpayment as long as you include the payments in your debt service ratios. Typically this is 3% of the outstanding balance.

So there you have it, to qualify for a mortgage, you’ll need to come up with a downpayment. That can be through your resources, a property you sold, an RRSP, a gift from a family member, borrowed funds, or a combination of all five sources.

If you’d like to discuss your downpayment or anything else related to mortgage financing; it’s never too early to start the conversation about getting pre-approved for a mortgage. Please connect anytime. It would be a pleasure to work with you!

Pay Down Your Mortgage Faster

Thu, 08 May 2025 07:15:00 GMT

Being a home owner is excellent, having a huge mortgage isn’t. So, if you have a mortgage that you’re looking to get rid of as quickly as possible, here are four things you should consider doing.

Accelerate your payments

Making the change from monthly payments to accelerated bi-weekly payments is one of the easiest ways you can make a difference to the bottom line of your mortgage. Most people don’t even notice the difference or increased payment.

A traditional mortgage with monthly payments splits the amount owing annually into 12 equal payments. Accelerated biweekly is simply taking a regular monthly payment and dividing it in two, but instead of making 24 payments, you make 26. The extra two payments accelerate the paying down of your mortgage.

Increase your regular mortgage payments

Chances are, depending on the terms of your existing mortgage, you can increase your regular mortgage payment by 10-25%. Alternatively, some lenders even offer the ability to double-up your mortgage payments. These are great options as any additional payments will be applied directly to the principal amount owing on your mortgage instead of a prepayment of interest.

Make a lump-sum payment

Depending on your lender and your mortgage product, you should be able to put down anywhere from 10-25% of the original mortgage balance in a bulk payment. Some lenders are particular about when you can make these payments; however, you should be eligible if you haven’t taken advantage of a lump sum payment yet this year.

Making a lump-sum payment is a great option if you’ve come into some money and you’d like to apply it to your mortgage. As this will lower your principal amount owing on the mortgage, it will reduce the amount of interest charged over the life of the mortgage.

Review your options regularly

As your mortgage payments debit from your bank account directly, it’s easy to put your mortgage on auto-pilot and not think twice about it until your term is up for renewal. Unfortunately, this removes you from the driver's seat and doesn’t allow you to make informed decisions about your mortgage or keep up to date with market conditions.

So let’s talk about an annual mortgage review. Working through an annual mortgage review with an independent mortgage professional is beneficial as there may be opportunities to refinance your mortgage and lower your overall cost of borrowing. By reviewing your mortgage at least once a year, you can be sure that you’ve always got the best mortgage for you! There is no cost involved here, just a quick assessment and peace of mind.

If you’ve got questions about your existing mortgage or want to compare your mortgage to options available today, please connect anytime. It would be a pleasure to work with you.

Lowering Your Overall Cost of Borrowing

Thu, 01 May 2025 07:15:07 GMT

If you’re like most Canadians, chances are you don’t have enough money in the bank to buy a property outright. So, you need a mortgage. When you’re ready, it would be a pleasure to help you assess and secure the best mortgage available. But until then, here’s some information on what to consider when selecting the best mortgage to lower your overall cost of borrowing.

When getting a mortgage, the property you own is held as collateral and interest is charged on the money you’ve borrowed. Your mortgage will be paid back over a defined period of time, usually 25 years; this is called amortization. Your amortization is then broken into terms that outline the interest cost varying in length from 6 months to 10 years. From there, each mortgage will have a list of features that outline the terms of the mortgage.

When assessing the suitability of a mortgage, your number one goal should be to keep your cost of borrowing as low as possible. And contrary to conventional wisdom, this doesn’t always mean choosing the mortgage with the lowest rate. It means thinking through your financial and life situation and choosing the mortgage that best suits your needs.

Choosing a mortgage with a low rate is a part of lowering your borrowing costs, but it’s certainly not the only factor. There are many other factors to consider; here are a few of them:

How long do you anticipate living in the property? This will help you decide on an appropriate term.
Do you plan on moving for work, or do you need the flexibility to move in the future? This could help you decide if portability is important to you.
What does the prepayment penalty look like if you have to break your term? This is probably the biggest factor in lowering your overall cost of borrowing.
How is the lender’s interest rate differential calculated, what figures do they use? This is very tough to figure out on your own. Get help.
What are the prepayment privileges? If you’d like to pay down your mortgage faster.
How is the mortgage registered on the title? This could impact your ability to switch to another lender upon renewal without incurring new legal costs, or it could mean increased flexibility down the line.
Should you consider a fixed rate, variable rate, HELOC, or a reverse mortgage? There are many different types of mortgages; each has its own pros and cons.
What is the size of your downpayment? Coming up with more money down might lower (or eliminate) mortgage insurance premiums, saving you thousands of dollars.

So again, while the interest rate is important, it’s certainly not the only consideration when assessing the suitability of a mortgage. Obviously, the conversation is so much more than just the lowest rate. The best advice is to work with an independent mortgage professional who has your best interest in mind and knows exactly how to keep your cost of borrowing as low as possible.

You will often find that mortgages with the rock bottom, lowest rates, can have potential hidden costs built in to the mortgage terms that will cost you a lot of money down the road. Sure, a rate that is 0.10% lower could save you a few dollars a month in payments, but if the mortgage is restrictive, breaking the mortgage halfway through the term could cost you thousands or tens of thousands of dollars. Which obviously negates any interest saved in going with a lower rate.

It would be a pleasure to walk you through the fine print of mortgage financing to ensure you can secure the best mortgage with the lowest overall cost of borrowing, given your financial and life situation. Please connect anytime!

Before You Co-Sign a Mortgage

Thu, 24 Apr 2025 07:15:00 GMT

So you’re thinking about co-signing on a mortgage? Great, let’s talk about what that looks like. Although it’s nice to be in a position to help someone qualify for a mortgage, it’s not a decision that you should make lightly. Co-signing a mortgage could have a significant impact on your financial future. Here are some things to consider.

You’re fully responsible for the mortgage.

Regardless if you’re the principal borrower, co-borrower, or co-signor, if your name is on the mortgage, you are 100% responsible for the debt of the mortgage. Although the term co-signor makes it sound like you’re somehow removed from the actual mortgage, you have all the same legal obligations as everyone else on the mortgage. When you co-sign for a mortgage, you guarantee that the mortgage payments will be made, even if you aren’t the one making them.

So, if the primary applicant cannot make the payments for whatever reason, you’ll be expected to make them on their behalf. If payments aren’t made, and the mortgage goes into default, the lender will take legal action. This could negatively impact your credit score. So it’s an excellent idea to make sure you trust the primary applicant or have a way to monitor that payments are, in fact, being made so that you don’t end up in a bad financial situation.

You’re on the mortgage until they can qualify to remove you.

Once the initial mortgage term has been completed, you won’t be automatically removed from the mortgage. The primary applicant will have to make a new application in their own name and qualify for the mortgage on their own merit. If they don’t qualify, you’ll be kept on the mortgage for the next term.

So before co-signing, it’s a good idea to discuss how long you can expect your name will be on the mortgage. Having a clear and open conversation with the primary applicant and your independent mortgage professional will help outline expectations.

Co-signing a mortgage impacts your debt service ratio.

When you co-sign for a mortgage, all of the debt of the co-signed mortgage is counted in your debt service ratios. This means that if you’re looking to qualify for another mortgage in the future, you’ll have to include the payments of the co-signed mortgage in those calculations, even though you aren’t the one making the payments directly.

As this could significantly impact the amount you could borrow in the future, before you co-sign a mortgage, you’ll want to assess your financial future and decide if co-signing makes sense.

Co-signing a mortgage means helping someone get ahead.

While there are certainly things to consider when agreeing to co-sign on a mortgage application, chances are, by being a co-signor, you'll be helping someone you care for get ahead in life. The key to co-signing well is to outline expectations and over-communicate through the mortgage process.

If you have any questions about co-signing on a mortgage or about the mortgage application process in general, please connect anytime. It would be a pleasure to work with you.

Costs Associated with Buying Property

tim@lyonmtg.com (Tim Lyon) — Thu, 10 Apr 2025 07:15:00 GMT

When calculating if you can afford to purchase a property, don’t just figure out a rough downpayment and quickly move on from there. Several other costs need to be considered when buying a property; these are called your closing costs. Closing costs refer to the things you’ll have to pay for out of your pocket and the amount of money necessary to finalize the purchase of a property.

And like most things in life, it pays to plan ahead when it comes to closing costs. Closing costs should be part of the pre-approval conversation as they are just as important as saving for your downpayment.

Now, if your mortgage is high-ratio and requires mortgage default insurance, the lender will need to confirm that you have at least 1.5% of the purchase price available to close the mortgage. This is in addition to your downpayment. So if your downpayment is 10% of the purchase price, you’ll want to have at least 11.5% available to bring everything together. But of course, the more cash you have to fall back on, the better.

So with that said, here is a list of the things that will cost you money when you’re buying a property. As prices vary per service, if you’d like a more accurate estimate of costs, please connect anytime, it would be a pleasure to walk through the exact numbers with you.

Inspection or Appraisal

A home inspection is when you hire a professional to assess the property's condition to make sure that you won’t be surprised by unexpected issues. An appraisal is when you hire a professional to compare the property's value against other properties that have recently sold in the area. The cost of a home inspection is yours, while the appraisal cost is sometimes covered by your mortgage default insurance and sometimes covered by you!

Lawyer or Notary Fees

To handle all the legal paperwork, you’re required to hire a legal real estate professional. They’ll be responsible for transferring the title from the seller's name into your name and make sure the lender is registered correctly on the title. Chances are, this will be one of your most significant expenses, except if you live in a province with a property transfer tax.

Taxes

Depending on which province you live in and the purchase price of the property you’re buying, you might have to pay a property transfer tax or land transfer tax. This cost can be high, upwards of 1-2% of the purchase price. So you’ll want to know the numbers well ahead of time.

Insurance

Before you can close on mortgage financing, all financial institutions want to see that you have property/home insurance in place for when you take possession. If disaster strikes and something happens to the property, your lender must be listed on your insurance policy.

Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. Not necessary, but worth a conversation.

Moving Expenses

Congratulations, you just bought a new property; now you have to get all your stuff there! Don’t underestimate the cost of moving. If you’re moving across the country, the cost of hiring a moving company is steep, while renting a moving truck is a little more reasonable; it all adds up. Hopefully, if you’re moving locally, your costs amount to gas money and pizza for friends.

Utilities

Hooking up new services to a property is more time-consuming than costly. However, if you’re moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services. It doesn’t really make sense to buy a property if you can’t afford to turn on the power or connect the water.

So there you have it; this covers most of the costs associated with buying a new property. However, this list is by no means exhaustive, but as mentioned earlier, planning for these costs is a good idea and should be part of the pre-approval process.

If you have any questions about your closing costs or anything else mortgage-related, please connect anytime; it would be great to hear from you!

Alternative Lending Provides You With Options

Thu, 03 Apr 2025 07:15:00 GMT

Alternative lending refers to any lending practices that fall outside the normal banking channels. Alternative lenders think outside the box and offer solutions to Canadians who wouldn’t otherwise qualify for traditional mortgage financing.

In an ideal world, we’d all qualify for the best mortgage terms available. However, this isn’t the case. Securing the most favourable terms depends on your financial situation. Here are a few circumstances where alternative lending might make sense for you.

Damaged Credit

Bad credit doesn’t disqualify you from mortgage financing. Many alternative lenders look at the strength of your employment, income, and your downpayment or equity to offer you mortgage financing. Credit is important, but it’s not everything, especially if there is a reasonable explanation for the damaged credit.

When dealing with alternative lending, the interest rates will be a little higher than traditional mortgage financing. But if the choice is between buying a property or not, or getting a mortgage or not, having options is a good thing. Alternative lenders provide you with mortgage options. That’s what they do best.

So, if you have damaged credit, consider using an alternative lender to provide you with a short-term mortgage option. This will give you time to establish better credit and secure a mortgage with more favourable terms. Use an alternative lender to bridge that gap!

Self-Employment

If you run your own business, you most likely have considerable write-offs that make sense for tax planning reasons but don’t do so much for your verifiable income. Traditional lenders want to see verifiable income; alternative lenders can be considerably more understanding and offer competitive products.

As interest rates on alternative lending aren’t that far from traditional lending, alternative lending has become the home for most serious self-employed Canadians. While you might pay a little more in interest, oftentimes, that money is saved through corporate structuring and efficient tax planning.

Non-traditional income

Welcome to the new frontier of earning an income.

If you make money through non-traditional employment like Airbnb, tips, commissions, Uber, or Uber eats, alternative lending is more likely to be flexible to your needs.

Most traditional lenders want to see a minimum of two years of established income before considering income on a mortgage application. Not always so with alternative lenders, depending on the strength of your overall application.

Expanded Debt-Service Ratios

With the government stress test significantly lessening Canadians' ability to borrow, the alternative lender channel allows expanded debt-service ratios. This can help finance the more expensive and suitable property for responsible individuals.

Traditional lending restricts your GDS and TDS ratios to 35/42 or 39/44, depending on your credit score. However, alternative lenders, depending on the loan-to-value ratio, can be considerably more flexible. The more money you have as a downpayment, the more you’re able to borrow and expand those debt-service guidelines. It’s not the wild west, but it’s certainly more flexible.

Connect anytime

Alternative lending can be a great solution if your financial situation isn’t all that straightforward. The goal of alternative lending is to provide you with options. You can only access alternative lending through the mortgage broker channel.

Please connect anytime if you’d like to discuss mortgage financing and what alternative lending products might suit your needs; it would be a pleasure to work with you.

Benefits of Working with an Independent Mortgage Professional

Thu, 27 Mar 2025 10:00:02 GMT

If you need a mortgage, working with an independent mortgage professional will save you money and provide you with better options than dealing with a single financial institution. And if that is the only sentence you read in this entire article, you already know all you need to know.

However, if you’d like to dig a little deeper, here are some reasons that outline why working with an independent mortgage professional is in your best interest.

The best mortgage is the one that costs you the least over the long term. An independent mortgage professional can help you achieve this.

Mortgages aren’t created equally. Oftentimes slick marketing leads us to believe the lowest “sticker price” is the best value. So when it comes to mortgage financing, you might assume the mortgage with the lowest rate is the best option. This isn’t always the case.

When considering a mortgage, your goal should be to find the mortgage that will cost you the least amount of money over the total length of the mortgage. There are many factors to consider, such as your specific financial situation, the rate, initial term length, fixed or variable rate structure, amortization, and the penalties incurred should you need to break your mortgage early; the fine print matters.

An independent mortgage professional can walk through all these factors with you and will help you find the mortgage that best suits your needs. Sometimes taking a mortgage with a slightly higher rate can make sense if it gives you flexibility down the line or helps you avoid huge payout penalties.

Working the numbers with an independent mortgage professional will save you money in the long run instead of just going with what a single lender is offering.

Save time by letting an independent mortgage professional find the best mortgage product for you.

Let's face it, getting a mortgage can be challenging enough on its own. Everyone’s financial situation is a little different and making sense of lender guidelines is a full-time job in itself.

So instead of dealing with multiple lending institutions on your own, when you work with an independent mortgage professional, you submit a single mortgage application that is compared to the lending guidelines of various mortgage lenders. This will save you time as you don’t have to go from bank to bank to ensure you’re getting the best mortgage.

Simply put, an independent mortgage professional works for you and has your best interest in mind, while a bank specialist works for the bank and has the bank's best interest in mind.

It’s no secret that Canadian banks make a lot of money. It seems every quarter they turn billions of dollars in profit (despite the economic environment). They do this at the expense of their customers by charging as much interest as they can and structuring mortgages to their benefit.

It’s all about the alignment of interest. Bank employees work for the bank; the bank pays them to make money for the bank. In contrast, independent mortgage professionals are provincially licensed to work for their clients and are paid a standardized placement or finder’s fee for matching borrowers with lenders. When you work with a single bank, you only have access to the products of that bank. When you work with an independent mortgage professional, you have access to all of the lenders that mortgage professionals have relationships with and all their products.

Working with an independent mortgage professional will save you money, time, and provide you with better mortgage options. Plus, you have the added benefit of working with a licensed professional looking out for your best interest, providing you with the best possible advice.

If you’d like to know more or to discuss mortgage financing, please connect anytime; it would be a pleasure to work with you.

How to Ensure a Smooth Home Purchase

Thu, 20 Mar 2025 10:00:04 GMT

Chances are, buying a home is one of the most important financial decisions you’ll make in your life. And as mortgage financing can be somewhat confusing at the best of times, to alleviate some of the stress and to ensure your home purchase goes as smoothly as possible, here are six very high-level steps you should follow.

While it might seem like the best place to start the home buying process is to browse MLS on your phone and then contact a Realtor to go out and look at properties, it’s not. First, you’re going to want to work with a licensed independent mortgage professional.

When you work with an independent mortgage professional, instead of working with a single bank, you’ll be working with someone who has your best interest in mind and can present you with mortgage options from several financial institutions.

The second step in the home buying process is to put together a mortgage plan. Unless you have enough money in the bank to buy a home with cash, you’re going to need a mortgage. And as mortgage financing can be challenging and not so straightforward, the best time to start planning for a mortgage is right now. Don’t make another move until you discuss your financial situation with an independent mortgage professional. It’s never too early to start planning.

As part of your mortgage plan, you’ll want to figure out what you can afford on paper, assess your credit score, run some financial scenarios, calculate mortgage payments, and have a clear picture of exactly how much money is required for a downpayment and closing costs. You’ll also be able to discuss which mortgage product is best for you, considering different mortgage terms, types, amortizations, and features.

Now, what you qualify to borrow on paper doesn’t necessarily mean you can actually afford the payments in real life. You need to consider your lifestyle and what you spend your money on. Understanding your cash flow is the key. Make a budget to verify you can actually afford your proposed mortgage payments and that you have enough funds to close on the mortgage. No one wants to be house-poor or left scrambling to come up with funds to close at the last minute.

If everything looks good at this point, the next step will be to get a preapproval in place. Now, a pre-approval is more than just typing some numbers into a form or online calculator; you need to complete a mortgage application and submit all the documents requested by your mortgage professional.

Only proceed with looking at properties when you’ve been given the green light from your mortgage professional. When you’ve found a property to purchase, you’ll work very closely with your mortgage professional to arrange mortgage financing in a short period of time. This is where being prepared pays off.

As you’ve already collected and submitted many documents upfront during the preapproval process, you should be set up for success. However, remain flexible and provide any additional documentation required by the lender to secure mortgage financing.

Once you have firm lender approval and you’ve removed conditions on the purchase agreement, don’t change anything about your financial situation until you have the keys. Don’t quit your job, don’t take out a new loan, or don’t make a large withdrawal from your bank account. Put your life into a holding pattern until you take possession of your new home.

So there you have it, six steps to ensuring a smooth home purchase:

Work with an independent mortgage professional.
Put together a mortgage plan.
Figure out what you can actually afford.
Get a pre-approval.
Provide the necessary documentation.
Don’t change anything about your financial situation until you take possession.

If you’d like to discuss your personal financial situation and find the best mortgage product for you, let’s work together. We can figure out a plan to buy a home as stress-free as possible.

Please connect anytime; it would be a pleasure to work with you.

What is a Cashback Mortgage?

Thu, 13 Mar 2025 10:00:01 GMT

As the name implies, a cashback mortgage is similar to a standard mortgage, except that you receive a lump sum of cash upon closing. This lump sum will either be a fixed amount of money or a percentage of the mortgage amount, usually between 1-7%, depending on the mortgage term selected.

How you use the cash is entirely up to you. Some of the most common reasons to secure a cashback mortgage are to:

Cover closing costs.
Buy new furniture.
Renovate your property.
Supplement cashflow.
Consolidate higher-interest debt.

Really, you can use the cash for anything you like. It’s tax-free and paid to you directly once the mortgage closes.

Understanding the cost of a cashback mortgage.

Now, while it might appear like a cashback mortgage is a great way to get some free money, it’s not. Banks aren’t altruistic; they’re in the business of making money by lending money. Securing a mortgage that provides you with cash back at closing will cost you a higher interest rate over your mortgage term.

A cashback mortgage is like getting a fixed loan rolled into your mortgage. Your interest rate is increased to cover the additional funds being lent.

Now, with so many different cashback options available and with interest rates constantly changing, it's nearly impossible to run through specific calculations on a simple article to outline how much more you’d pay over the term. So, if you'd like to identify the true cost of securing a cashback mortgage, the best place to start is to discuss your financial situation with an independent mortgage professional.

When you work with an independent mortgage professional instead of a single bank, you receive unbiased advice, more financing options, and a clear picture of the cost associated with securing a mortgage.

Getting cashback at closing is a mortgage feature that makes the bank more money at your expense. This isn’t necessarily a bad thing; the key is to be informed of the costs involved so you can make a good decision.

Eligibility for a cashback mortgage.

Simply put, a cashback mortgage isn’t for everyone. This is a mortgage product that has tougher qualifications than standard mortgage financing. Any lender willing to offer a cashback mortgage will want to see that you have stable employment, a fabulous credit score, and healthy debt service ratios. If your mortgage application is in any way “unique,” the chances of qualifying for a cashback mortgage are pretty slim.

Breaking your mortgage term early.

In addition to paying a higher interest rate to cover the cost of receiving the cashback at closing, a cashback mortgage also limits your options down the line.

If your life circumstances change and you need to break your mortgage mid-term, depending on the conditions set out in your mortgage contract, you’ll most likely be required to either pay all of the cashback received or at least a portion, depending on how long you’ve had the mortgage.

As all cashback mortgages are tied to fixed-rate terms, so in addition to repaying the cashback, you’d also be required to pay the interest rate differential penalty; or 3 months interest, whichever is greater for breaking your mortgage term early.

Sufficed to say, should you need to pay out your mortgage early, breaking your cashback mortgage will be costly. Certainly, this is something to consider when assessing the suitability of this mortgage product.

Get independent mortgage advice.

Understanding the intricacies of mortgage financing can be difficult at the best of times. With all the different terms, rates, and mortgage products available, it’s hard to know which mortgage is best for you.

So while a mortgage that offers a cash incentive upon closing might initially seem like an attractive offer, make sure you seek out the guidance of an independent mortgage professional to help you navigate the costs associated with a cashback mortgage. While it might be a great option for you, there might be other mortgage options that better suit your needs. It's worth a conversation for sure!

If you’d like to discuss what a cashback mortgage or any other mortgage product would look like for you, please get in touch. It would be a pleasure to work with you.

Buying a Second Property

Thu, 06 Mar 2025 11:00:04 GMT

If you’ve been thinking about buying a second property and you’re looking to put some of the pieces together, you’ve come to the right place!

Whether you’re looking to buy a vacation property, start a rental portfolio, or help accommodate a family member, there are many reasons to buy a second property (while keeping your existing property), which might make sense for you!

Now, while there are many great reasons to buy a second property, there is also a lot to know as you walk through the process. The key here is to have absolute clarity around your why.

Ask yourself, why do you want to buy a second property? This isn’t a decision to be taken lightly or one that should be made too quickly. Buying a second property should be a strategic decision that allows you to accomplish your goals, and it should include an assessment of your overall financial health.

So with clear goals in mind, the best place to start the process is to have a conversation with an independent mortgage professional. This will allow you to assess your financial situation, outline the costs, and put together a plan to make it happen.

While purchasing a second property is similar to buying a primary residence, there are some key differences. Just because you’ve qualified in the past for your existing mortgage doesn’t mean you’ll qualify to purchase a second property.

One key difference is the amount of downpayment you might be required to come up with. A property that is owner-occupied or occupied by a family member on a rent-free basis will require less of a downpayment than if the second property will be used to generate an income. So, depending on the property's intended use, you might have to come up with as much as 25%-35% down.

This is where strategic planning comes in. Consider unlocking the equity in your existing home to finance the downpayment to purchase your second home. Here are a few ways you can go about doing that:

Securing a new mortgage if you own your property clear title
Refinancing your existing mortgage to access additional funds
Securing a home equity line of credit (HELOC)
Getting a second mortgage behind your existing first mortgage
Securing a reverse mortgage

The conversation about buying a second property should include assessing your overall financial health, leveraging your existing assets to lower your overall cost of borrowing, and figuring out the best way to accomplish your goals.

And as it's impossible to outline every scenario in a simple blog post, if you’d like to discuss your goals and put a plan together to finance a second property, connect anytime. It would be a pleasure to work with you.

How to Buy a Home: A Step-by-Step Guide

Mon, 03 Mar 2025 17:41:34 GMT

Buying a home is one of the biggest financial decisions you’ll ever make. Whether it’s your first home or your next one, the process can feel overwhelming without a clear roadmap. This guide breaks down each step so you know what to expect, who’s involved, and how to prepare.

What Does Buying a Home Involve?

At its core, buying a home means matching your budget with the right property, securing financing, and completing all the legal steps to make it yours. The journey usually takes 3–6 months from start to possession, though it can be quicker or longer depending on the market and your situation.

The Home Buying Timeline

Here’s how the process typically unfolds:

Pre-Approval – Meet with a mortgage broker to review your income, down payment, and debts. A pre-approval shows what you can afford and locks in a rate if needed.
Initial Consultation with Your Realtor – Define your search criteria, including location, size, and must-have features.
House Hunting (1–3 months) – Tour properties with your Realtor. Share potential homes with your broker to ensure they fit lending guidelines.
Making an Offer – Your Realtor helps draft and negotiate the offer, including important conditions (“subjects”) like financing and inspection.
Subject Removal (7–10 days) – Work with your mortgage broker, inspector, and lawyer to complete due diligence. Once you remove subjects and provide your deposit, the home is officially SOLD.
Preparation for Closing (2–6 weeks) – Arrange insurance, utilities, moving details, and gather your down payment and closing costs.
Closing (3–5 days before possession) – Meet with your lawyer/notary to sign documents and pay the balance of your down payment.
Possession Day – Final walkthrough and key handoff. Time to move in!

Who Are the Key Players?

You’ll interact with several professionals during this process:

You, the Buyer – Deciding what you want and what you can afford.
Realtors – The listing agent represents the seller; your buyer’s agent represents you, negotiates on your behalf, and is paid by the seller.
Mortgage Broker – Helps secure financing, compare lenders, and structure your mortgage.
Lender – The bank or credit union providing your mortgage loan.
Lawyer/Notary – Handles the legal transfer of funds and property title.
Home Inspector – Checks for issues with the property.
Appraiser – Confirms the property’s market value for the lender.

Costs to Budget For

Beyond your down payment, you’ll need cash set aside for closing costs:

Legal Fees: $1,400–$2,200
BC Property Transfer Tax (PTT):
1% on the first $200,000 of the property’s market value
2% on the portion between $200,000 and $2,000,000
3% on the portion between $2,000,000 and $3,000,000
5% on any amount above $3,000,000
There are exemptions for first-time buyers and for those purchasing newly built homes . Use my Property Transfer Tax Calculator to estimate your costs.
Appraisal: Around $400
Home Inspection: Around $500
I nsurance & Moving Costs: Variable

You can also use my Closing Cost Calculator to create a personalized budget.

Rule of thumb: budget 1.5% of the purchase price for closing costs. First-time buyers may need less due to property transfer tax exemptions.

Quick Summary

Step 1: Get pre-approved so you know your budget
Step 2: Work with the right team (Realtor, broker, lawyer, inspector)
Step 3: Budget for both down payment and closing costs
Step 4: Follow the process—offer, subjects, closing, possession
Step 5: Enjoy your new home with confidence!

Next Steps

If you’re thinking about buying your first home—or it’s just been a while since your last purchase—the best place to start is a conversation. Let’s walk through your numbers and get a plan in place. Book a consultation or call 778-988-8409 .

Mortgage Term Glossary

Amortization: Length of time to fully pay off your mortgage (commonly 25–30 years).
Appraisal: Professional estimate of your home’s market value, often required by lenders.
Deposit: Money you pay when your offer becomes firm; goes toward your down payment.
Down Payment: Your initial contribution toward the home’s purchase price.
Equity: The difference between your home’s value and what you owe on the mortgage.
Fixed Rate: Mortgage rate that stays the same for your term.
Mortgage Term: The length of your mortgage contract (1–5 years).
Pre-Approval: A budget put together by your mortgage broker to show what you can afford.
Stress Test: Rule requiring buyers to qualify at a higher interest rate than their actual rate.
Variable Rate: Mortgage rate that can fluctuate with the lender’s prime rate.

Is It the Right Time to Refinance? 5 Signs You Should Consider It

Thu, 27 Feb 2025 19:58:46 GMT

Refinancing your mortgage can be a smart financial move, but how do you know if it’s the right time? Whether you’re looking to lower your monthly payments, access home equity, or consolidate debt, refinancing can offer valuable benefits. Here are five key signs that it might be the right time to refinance your mortgage in Canada.

1. Interest Rates Have Dropped

One of the most common reasons Canadians refinance is to secure a lower interest rate. Even a small decrease in your mortgage rate can lead to significant savings over time. If rates have dropped since you took out your mortgage, refinancing could help you reduce your monthly payments and save thousands in interest.

✅ Tip: Check with your mortgage broker to compare your current rate with today’s market rates.

2. Your Financial Situation Has Improved

If your credit score has increased or your income has stabilized since you first got your mortgage, you might qualify for better loan terms. Lenders offer lower rates and better conditions to borrowers with strong financial profiles.

✅ Tip: If you’ve paid off debts, improved your credit score, or increased your savings, refinancing could work in your favour.

3. You Want to Consolidate High-Interest Debt

Carrying high-interest debt from credit cards, personal loans, or lines of credit? Refinancing can help consolidate those debts into your mortgage at a much lower interest rate. This can make monthly payments more manageable and reduce the overall cost of borrowing.

✅ Tip: Make sure the savings from refinancing outweigh any prepayment penalties or fees.

4. You Need to Free Up Cash for a Major Expense

Many Canadians refinance to access their home’s equity for renovations, education costs, or major life expenses. With home values rising in many areas, a refinance could help you tap into that value while still keeping manageable payments.

✅ Tip: Consider a home equity line of credit (HELOC) if you need flexible access to funds.

5. Your Mortgage Term is Ending, and You Want Better Terms

If your mortgage is up for renewal, it’s the perfect time to explore refinancing options. Instead of simply accepting your lender’s renewal offer, compare rates and terms to see if you can get a better deal elsewhere.

✅ Tip: A mortgage broker can help you shop around and negotiate better terms on your behalf.

Is Refinancing Right for You?

Refinancing isn’t always the best move—there can be penalties for breaking your current mortgage, and not all savings are worth the switch. However, if you relate to any of the five signs above, it’s worth discussing your options with a mortgage professional.

Thinking about refinancing? Let’s chat and find the best option for you!

Reposition Your Debts Through Mortgage Financing

Thu, 27 Feb 2025 11:00:01 GMT

If you’re a homeowner looking to optimize your finances, consider taking advantage of your home’s equity to reposition any existing debts you may have.

If you’ve accumulated consumer debt, the payments required to service these debts can make it difficult to manage your daily finances. A consolidation mortgage might be a great option for you!

Simply put, debt repositioning or debt consolidation is when you combine your consumer debt with a mortgage secured to your home. To make this happen, you’ll borrow against your home’s equity.

This can mean refinancing an existing mortgage, securing a home equity line of credit, or taking out a second mortgage. Each mortgage option has its advantages which are best outlined in discussion with an independent mortgage professional.

Some of the types of debts that you can consolidate are:

Credit Card
Unsecured Line of Credit
Car Loan
Student Loans
Personal or Payday Loans

Most unsecured debt carries a high interest rate because the lender doesn't have any collateral to fall back on should you default on the loan. However, as a mortgage is secured to your home, the lender has collateral and can provide you with lower rates and more favourable terms.

Debt consolidation makes sense because it allows you to take high-interest unsecured debts and reposition them into a single low payment.

So, when considering the best mortgage for you, getting a low rate is important, but it’s not everything. Your goal should be to lower your overall cost of borrowing. A mortgage that allows for flexibility in prepayments helps with this. It’s not uncommon to find a mortgage at a great rate that allows you to increase your payments by 15% per payment, double your payments, or make a lump sum payment of up to 15% annually.

As additional payments go directly to the principal repayment of the loan, once you’ve consolidated all your debts into a single payment, it’s smart to take advantage of your prepayment privileges by paying more than just your minimum required mortgage payment, as this will help you become debt-free sooner.

While there is a lot to unpack here, if you’d like to discuss what using a mortgage to reposition your debts could look like for you, here’s a simple plan we can follow:

First, we’ll assess your existing debt to income ratio.
We’ll establish your home’s equity.
We’ll consider all your mortgage options.
Lastly, we’ll reposition your debts to help optimize your finances.

If this sounds like the plan for you, the best place to start is to connect directly. It would be a pleasure to work with you.

How To Avoid An Accidental Home Purchase

Thu, 20 Feb 2025 11:00:03 GMT

Buying a property might actually be easier than you think. So, if you have NO desire AT ALL to qualify for a mortgage, here are some great steps you can take to ensure you don’t accidentally buy a property.

Fair warning, this article might get a little cheeky.

Quit your job.

First things first, ditch that job. One of the best ways to make sure you won’t qualify for a mortgage is to be unemployed. Yep, most mortgage lenders aren’t in the practice of lending money to unemployed people!

If you already have a preapproval in place and don’t want to go through with financing, no problems. Unexpectedly quit your job mid-application. Because, even if you’re making a lateral move or taking a better job, any change in employment status can negatively impact your approval.

Spend All Your Savings.

To get a mortgage, you’ll have to bring some money to the table. In Canada, the minimum downpayment required is 5% of the purchase price. Now, if the goal is not to get a mortgage, spending all your money and having absolutely nothing in your account is a surefire way to ensure you won’t qualify for a mortgage. So, if you’ve been looking for a reason to go out and buy a new vehicle, consider this your permission.

Collect as Much Debt as Possible.

After quitting your job and spending all your savings, you should definitely go out and incur as much debt as possible! The higher the payments, the better.

You see, one of the main qualifiers on a mortgage is called your debt-service ratio. This takes into count the amount of money you make compared to the amount of money you owe. So the more debt you have, the less money you’ll have leftover to finance a home.

Stop Making Your Debt Payments

So let’s say you can’t shake your job, you still have a good amount of money in the bank, and you’ve run out of ways to spend money you don’t have. Don’t panic; you can still absolutely wreck your chances of qualifying for a mortgage! Just don’t pay any of your bills on time or stop making your payments altogether.

Why would any lender want to lend you money when you have a track record of not paying back any of the money you’ve already borrowed?

Provide Ugly Supporting Documentation.

Now, if all else fails, the last chance you have to scuttle your chances of getting a mortgage is to provide the lender with really ugly documents. To support your mortgage application, lenders must complete their due diligence. Here are three ways to make sure the lender won’t be able to verify anything.

Firstly, and probably the most straightforward, make sure your name doesn’t appear anywhere on any of your statements. This way, the lender can’t be sure the documents are actually yours or not.

Secondly, when providing bank statements to prove downpayment funds, make sure there are multiple cash deposits over $1000 without explaining where the money came from. This will look like money laundering and will throw up all kinds of red flags.

And lastly, consider blacking out all your “personal information.” Just use a black Sharpie and make your paperwork look like classified FBI documents.

Follow-Through

So there you have it, to avoid an accidental home purchase, you should quit your job, spend all your money, borrow as much money as possible, stop making your payments, and make sure the lender can’t prove anything! This will ensure no one will lend you money to buy a property!

Now, on the off chance that you’d actually like to qualify for a mortgage, you’ve come to the right place. The suggestion would be to actually keep your job, save for a downpayment, limit the amount of debt you carry, make your payments on time, and provide clear documentation to support your mortgage application!

If you'd like to make sure you're on the right track, connect anytime. It would be a pleasure to walk through the mortgage process with you.

Standard or Collateral Charge Mortgage. What’s best for you?

Thu, 13 Feb 2025 11:00:01 GMT

When arranging mortgage financing, your mortgage lender will register your mortgage in one of two ways. Either with a standard charge mortgage or a collateral charge mortgage. Let’s look at the differences between the two.

Standard charge mortgage

This is your good old-fashioned mortgage. A standard charge mortgage is the mortgage you most likely think about when you consider mortgage financing. Here, the amount you borrow from the lender is the amount that is registered against the title to protect the lender if you default on your mortgage.

When your mortgage term is up, you can either renew your existing mortgage or, if it makes more financial sense, you can switch your mortgage to another lender. As long as you aren’t changing any of the fine print, the new lender will usually cover the cost of the switch.

A standard charge mortgage has set terms and is non-advanceable. This means that if you need to borrow more money, you'll need to reapply and requalify for a new mortgage. So there will be costs associated with breaking your existing mortgage and costs to register a new one.

Collateral charge mortgage

A collateral charge mortgage is a mortgage that can have multiple parts, usually with a re-advanceable component. It can include many different financing options like a personal loan or line of credit. Your mortgage is registered against the title in a way that should you need to borrow more money down the line; you can do so fairly easily.

A home equity line of credit is a good example of a collateral charge mortgage.

Unlike a standard charge mortgage, here, your lender will register a higher amount than what you actually borrow. This could be for the property's full value, or some lenders will go up to 125% of your property's value.

In the future, if the value of your property appreciates, with a collateral charge mortgage, you don't have to rewrite your existing mortgage to borrow more money (assuming you qualify). This will save you from any costs associated with breaking your existing mortgage and registering a new one.

However, if you’re looking to switch your mortgage to another lender at the end of your term, you might be forced to discharge your mortgage and incur legal fees. Also, by registering your mortgage with a collateral charge, you potentially limit your ability to secure a second mortgage.

So what’s a better option for you?

Well, there are benefits and drawbacks to both. Finding the best option for you really depends on your financial situation and what you believe gives you the most flexibility. This is probably a question better handled in a conversation rather than in an article.

With that said, undoubtedly, the best option is to work with an independent mortgage professional. It’s our job to understand the intricacies of mortgage financing, listen to and assess your needs, and recommend the best mortgage to meet your needs. As we work with many lenders, we can provide you with options. Don’t get stuck dealing with a single institution that may only offer you a collateral charge mortgage when what you need is a standard charge mortgage.

So if you’d like to have a conversation about mortgage financing, please get in touch. It would be a pleasure to work with you and answer any questions you might have.

What Banks Won’t Tell You About Mortgage Financing

tim@lyonmtg.com (Tim Lyon) — Thu, 06 Feb 2025 11:00:00 GMT

If you’re looking to buy a property or have a mortgage up for renewal, and you’re thinking about connecting with your bank directly, save yourself a lot of money and regret by reading this article first.

Here are four things that your bank won’t tell you, accompanied by four reasons that explain why working with an independent mortgage professional is in your best interest.

Banks have Limited Access to Mortgage Products.

Now, while this one may seem pretty straightforward, if you’re dealing with a single institution, they can only offer mortgages from their product catalogue. This means that you’ll be restricted to their qualifications which are usually very narrow. Working with a single institution significantly limits your options, especially if your financial situation isn’t straightforward.

In contrast, dealing with an independent mortgage professional, you will have access to products from over 200 lenders, including banks, monoline lenders, credit unions, finance companies, alternative lenders, institutional B lenders, Mortgage Investment Corporations, and private funds. Working with an independent mortgage professional will give you considerably more options to secure a better mortgage.

Banks Employ Salespeople, not Mortgage Experts.

Banks don’t employ mortgage experts; they employ salespeople. Banks pay and incentivize salespeople to sell their products. There is a fundamental misalignment of values here. If the bank incentivizes a banker to make a profit for the bank, how can they at the same time advocate for you and your best interest? They can’t.

Banks don’t have your best interest in mind. In fact, the more money they make off of you, the better it is for their bottom line.

However, when you work with an independent mortgage professional, you get the experience of someone who understands the intricacies of mortgage financing and will advocate on your behalf to get you the best mortgage. It’s actually in our best interest to assist you in finding the mortgage with the best terms for you.

Once your mortgage completes, we get paid a standardized finder’s fee by the lender for arranging the financing. So although we get paid by the lender, that lender has had to compete with other lenders to earn your business.

When you work with an independent mortgage professional, everyone wins. You get the best mortgage available, we get paid a standardized finder’s fee, and the lender gets a new borrower.

Banks Rarely Offer You Their Best Terms Upfront.

Banks are in the business of making money, and they’re usually pretty good at it. As such, banks will rarely offer you their best terms at the outset of your negotiation.

This is especially true if you’re looking to refinance your existing mortgage. With over half of Canadians simply accepting the renewal offer they get sent in the mail without question, banks don’t have to put their best rate forward. Instead, they rely on you to be ignorant of the process and will take advantage of your trust in them.

When you work with an independent mortgage professional, we don’t play games with rates and terms. Our goal is always to seek out the lender who has the best mortgage for you from the start of the process, and if there are any negotiations to be had, we handle them for you. There is no reason for us to do otherwise. In fact, the better we do our job, the more likely it is that you’ll be happy with our services and refer your friends and family.

Banks Promote Restrictive Mortgage Products.

As if it’s not bad enough that banks don’t offer their best terms upfront, they actually promote mortgage products that are restrictive in nature. The fine print in your mortgage contract matters; understanding it is challenging. Banks do what they can to make it hard for you to leave.

Now, if you’ve ever heard stories of outrageous penalties being charged, this is what’s called an Interest Rate Differential penalty (IRD). Each lender has its own way of calculating the IRD. Chartered banks are known for their restrictive mortgages and high IRD penalties.

When you work with an independent mortgage professional, we take the time to listen to your goals and assess your mortgage needs based on your life circumstances.

The best mortgage is the one that lowers your overall cost of borrowing. So not only will we walk through the cost of the mortgage financing, but we’ll also clearly outline the costs incurred should you need to break your mortgage before the end of your term. This might be the deciding factor in choosing the right lender and mortgage for you.

Working with an Independent Mortgage Professional is in Your Best Interest.

Banks have limitations to the mortgage products they offer. Working with an independent mortgage professional gives you mortgage options!

Bankers work for the bank; they are incentivized to make money for the bank. An independent mortgage professional advocates on your behalf to get you the best mortgage available.

Banks rarely offer their best terms upfront; they leave negotiations up to you. An independent mortgage professional outlines the best terms from multiple lenders at the start of the process.

Banks promote restrictive mortgage products that make it difficult to leave them. An independent mortgage broker will outline all the costs associated with different mortgage products and recommend the mortgage best suited for your needs.

So if you’d like to talk about the best mortgage product for you, you’ve come to the right place. Please connect anytime. It would be a pleasure to work with you.

Are You Ready To Buy A Home?

Thu, 30 Jan 2025 13:00:05 GMT

Buying your first home is a big deal. And while you may feel like you’re ready to take that step, here are 4 things that will prove it out.

1. You have at least 5% available for a downpayment.

To buy your first home, you need to come up with at least 5% for a downpayment. From there, you’ll be expected to have roughly 1.5% of the purchase price set aside for closing costs.

If you’ve saved your downpayment by accumulating your own funds, it means you have a positive cash flow which is a good thing. However, if you don’t quite have enough saved up on your own, but you have a family member who is willing to give you a gift to assist you, that works too.

2. You have established credit.

Building a credit score takes some time. Before any lender considers you for mortgage financing, they want to see that you have an established history of repaying the money you’ve already borrowed. Typically two trade lines, for a period of two years, with a minimum amount of $2000, should work!

Now, if you’ve had some credit issues in the past, it doesn’t mean you aren’t ready to be a homeowner. However, it might mean a little more planning is required! A co-signor can be considered here as well.

3. You have the income to make your mortgage payments. And then some.

If you’re going to borrow money to buy a house, the lender wants to make sure that you have the ability to pay it back. Plus interest. The ideal situation is to have a permanent full-time position where you’re past probation. Now, if you rely on any inconsistent forms of income, having a two-year history is required.

A good rule of thumb is to keep the costs of homeownership to under a third of your gross income, leaving you with two-thirds of your income to pay for your life.

4. You’ve discussed mortgage financing with a professional.

Buying your first home can be quite a process. With all the information available online, it’s hard to know where to start. While you might feel ready, there are lots of steps to take; way more than can be outlined in a simple article like this one.

So if you think you’re ready to buy your first home, the best place to start is with a preapproval! Let's discuss your financial situation, talk through your downpayment options, look at your credit score, assess your income and liabilities, and ultimately see what kind of mortgage you can qualify for to become a homeowner!

Please connect anytime; it would be a pleasure to work with you!

Mortgage Financing For Home Renos

Thu, 23 Jan 2025 13:00:04 GMT

If you’re looking to do some home renovations but don’t have all the cash up front to pay for materials and contractors, here are a few ways to use mortgage financing to bring everything together.

Existing Home Owners - Mortgage Refinance

Probably the most straightforward solution, if you’re an existing homeowner, would be to access home equity through a mortgage refinance.

Depending on the terms of your existing mortgage, a mid-term mortgage refinance might make good financial sense; there’s even a chance of lowering your overall cost of borrowing while adding the cost of the renovations to your mortgage.

As your financial situation is unique, it never hurts to have the conversation, run the numbers, and look at your options. Let’s talk!

If you're not in a huge rush, it might be worth waiting until your existing term is up for renewal. This is a great time to refinance as you won’t incur a penalty to break your existing mortgage.

Now, regardless of when you refinance, mid-term or at renewal, you’re able to access up to 80% of the appraised value of your home, assuming you qualify for the increased mortgage amount.

Home Equity Line of Credit

Instead of talking with a bank about an unsecured line of credit, if you have significant home equity, a home equity line of credit (HELOC) could be a better option for you.

An unsecured line of credit usually comes with a pretty high rate. In contrast, a HELOC uses your home as collateral, allowing the lender to give you considerably more favourable terms.

There are several different ways to use a HELOC, so if you’d like to talk more about what this could look like for you, connect anytime!

Buying a Property - Purchase Plus Improvements

If you’re looking to purchase a property that could use some work, some lenders will allow you to add extra money to your mortgage to cover the cost of renovations. This is called a purchase plus improvements. The key thing to keep in mind is that the renovations must increase the value of the property. There is a process to follow and a lot of details to go over, but we can do this together.

So if you’d like to discuss using your mortgage to cover the cost of renovating your home, please connect anytime!

Mortgage Financing Through A Separation Or Divorce

Thu, 09 Jan 2025 13:00:06 GMT

With the latest stats claiming that about half of marriages end in divorce and with around three-quarters of Canadians being homeowners, it’s important to know how to handle your mortgage if you decide to separate. Here’s a quick list of things to consider.

Keep making your payments.

A mortgage is a legally binding contract between you and the lender. It doesn’t take marriage into account. If your name appears on the mortgage, you're responsible for making sure the regular payments are made. A marital breakdown does not give you an excuse not to make your mortgage payments.

If, during your marriage, you've relied on your spouse to make the mortgage payments and you aren’t certain payments are being made after separating, it's in your best interest to contact the lender directly to verify your mortgage is being paid. If payments aren't being made, it could affect your credit score or worse; the lender could start foreclosure proceedings.

There is always a financial cost to break your mortgage.

When working through how to split your finances, you decided to either refinance your mortgage, remove someone from the title, or sell the property, keep in mind that you will incur legal costs.

If you’re in the middle of a term, the penalty for breaking your mortgage might be significant, especially if you have a fixed-rate mortgage. It’s certainly worth contacting your mortgage lender directly to verify the cost of breaking your mortgage. Having that information accessible when writing out your separation agreement will provide increased clarity.

Listing your marital status as separated or divorced.

When completing a mortgage application for securing new mortgage financing, when you list your marital status as separated or divorced, you can expect that a lender will want to see your legal separation agreement or your divorce papers. The lender wants to make sure you aren’t responsible for support payments. So if you haven’t finalized the paperwork, expect delays in securing mortgage financing.

It could be harder to qualify for a new mortgage.

With the separation of assets also comes the separation of incomes. If you qualified for your existing mortgage on a double income, you might find it hard to maintain the same quality of lifestyle post-separation.

This is where careful planning comes in. Working closely with your independent mortgage professional will ensure you understand exactly where you stand. You’ll want to put together a plan for how to handle the mortgage on the matrimonial home.

Purchasing the matrimonial home from your ex.

There are special considerations given to people going through a separation to buy out the matrimonial home. Instead of looking at the transaction like a refinance where you can only borrow up to 80% of the property’s value, lenders will consider one spouse buying out the other up to a 95% loan to value ratio. This comes in handy when dividing assets and liabilities.

Navigating the ins and outs of mortgage financing isn’t something you have to do alone. If you're going through a separation and you’d like to discuss all your mortgage options, please connect anytime. It would be a pleasure to walk you through the process.

Mortgage Insurance Rule Changes Enable Homeowners to Add Secondary Suites

Fri, 03 Jan 2025 18:41:26 GMT

As housing affordability challenges persist across Canada, innovative solutions are reshaping the way homeowners can contribute to housing supply. Starting January 15, 2025, new mortgage insurance rule changes will allow Canadian homeowners to access insured refinancing options to create secondary suites, such as basement apartments or laneway homes.

This move, announced in Budget 2024 and detailed by the Department of Finance Canada, is part of a broader strategy to increase housing density and improve affordability while offering homeowners the chance to generate additional income.

Why These Changes Matter

Historically, converting extra space into rental units has been both costly and mired in municipal red tape. Recent zoning reforms across Canada’s major cities, driven by Housing Accelerator Fund agreements, are reducing these barriers. The creation of secondary suites not only expands housing supply but also provides financial benefits to homeowners, such as offering seniors additional income to support aging in place.

Key Parameters for the New Rules

The new mortgage insurance program is designed to enable homeowners to build legal, self-contained secondary suites that comply with municipal requirements.

Here are the essential details:

Eligibility Requirements

Homeowners must already own the property.

The homeowner or a close relative must occupy one of the existing units.

Additional units must not be used as short-term rentals.

Project Specifications

New units must be fully self-contained with separate entrances (e.g., basement suites, laneway homes).

Up to four total dwelling units are allowed, including existing units.

Financial Parameters

The “as improved” property value must be less than $2 million.

Homeowners can refinance up to 90% of the property’s value, including the enhanced value from secondary suites.

The maximum amortization period is 30 years.

Additional financing must not exceed the project’s costs.

When Do These Rules Take Effect?

Starting January 15, 2025, lenders can submit applications for mortgage insurance under these updated parameters. This applies to all eligible properties across Canada, provided the new units align with municipal zoning requirements.

What This Means for Homeowners

For homeowners with underutilized space, such as basements or detached garages, this new program offers an opportunity to increase property value and create a source of long-term income. By building legal secondary suites, homeowners can contribute to Canada’s rental housing market while gaining financial security.

A Step Toward Housing Solutions

As housing supply remains a pressing issue, these mortgage insurance changes reflect a commitment to practical, homeowner-driven solutions. Whether you’re a senior looking to age in place or a family seeking to maximize your property’s potential, these changes represent an exciting opportunity to invest in your home and your community.

Stay informed and explore your options with your lender to determine if this program is right for you. The path to unlocking your property’s potential begins in 2025.

Getting A Second Mortgage

Thu, 02 Jan 2025 13:00:05 GMT

If you're not all that familiar with the ins and outs of mortgage financing, the term "second mortgage" might cause a bit of confusion. Many people incorrectly assume that a second mortgage is arranged when your first term is up for renewal or when you sell your first home. They think that the next mortgage you get is your "second mortgage." This is not the case.

A second mortgage is an additional mortgage on a single property, not the second mortgage you get in your lifetime.

When you borrow money to buy a house, your lawyer or notary will register your mortgage on the property title in what is called first position. This means that your mortgage lender has the first claim against the sale proceeds if you sell your property. If you happen to default on your mortgage, this is the security the lender has in repossessing your property. A second mortgage falls in behind the first mortgage on your property title.

When you sell your property, the lawyers will use the sale proceeds to pay off your mortgages in sequence, the first position mortgage is paid out first, and the second mortgage is paid out second. After both mortgages are paid off completely, you get the remaining equity.

When you secure a second mortgage, you continue making payments on your first mortgage as per your mortgage agreement. You must also then fulfill the terms of the second mortgage.

So why would you want a second mortgage? Well, a second mortgage comes in handy when you're looking to access some of your home equity, but you either have excellent terms on your first mortgage that you don't want to break, or you’d incur a huge penalty to break your first mortgage. Instead of refinancing the first mortgage, a second mortgage can be a better option.

A second mortgage is often used as a short-term debt consolidation tool to help provide you with better cash flow. If you’ve accumulated a considerable amount of high-interest unsecured debt, and you have equity in your home, you can secure a second mortgage to lower your overall cost of borrowing.

If you'd like to know more about how a second mortgage works, or if you'd like to discuss anything related to mortgage financing, please connect anytime!

Navigating The Housing Market

Thu, 26 Dec 2024 13:00:04 GMT

If you’ve been thinking about buying a property, whether that be your first home, next home, forever home, or a home to retire into, the current state of the Canadian economy might have you wondering: Is this really the right time to make a move? There is certainly no shortage of doom and gloom in the news out there.

The truth is, that’s a tough question to answer in the best of times. It’s nearly impossible to know for sure what’s going to happen next with the housing market in Canada. It could heat up or it could cool down.

So here’s some advice. Instead of basing your buying decision entirely on external market factors, like the economy or housing market, consider looking for the answers internally. When you stop looking at the market to determine your timing to buy a home, and instead examine the personal reasons you have for wanting to buy a home, the picture can become much clearer.

Here are some questions to consider. Although they are subjective, they will help bring you clarity. Ask yourself:

Does buying a property now put me in a better financial position?
Do I make enough money now to afford a new home and maintain my lifestyle?
Do I feel confident with my current employment status?
Have I saved enough money for a down payment?
How long do I plan on living in this new home?
Is there any scenario where I might have to sell quickly and potentially lose money?
Does buying a property now move me closer to my life goals?
Do I really want to buy now or am I just feeling a lot of pressure to just buy something?
Am I holding back because I'm scared property prices might drop soon?

There’s no doubt that buying a home can be stressful, but it doesn’t have to be. Having a plan in place is the best course of action to help you make good decisions and alleviate that stress.

If you’d like to have a conversation to discuss your plans, ask some questions, and map out what buying a home looks like for you, we can address many of the unknowns together.

The best place to start is to work through a mortgage pre-approval. There is no cost for this service, you’ll learn exactly what you can qualify for, and it will provide a lot of clarity about your situation.

You might decide that it’s best to wait before buying, and that’s just fine. You might find that now’s a perfect time for you to buy! If you'd like to talk, please connect anytime. You’re not in this alone. We can work through everything together.

How To Improve Your Credit Score

Thu, 19 Dec 2024 13:00:09 GMT

Your credit score and how you manage credit are huge factors in qualifying for a mortgage. If you want the best interest rates and mortgage products available on the market, you want a high credit score. Here are a few things you can do to improve your credit score.

Make all your payments on time.

Making your payments on time is so important; in fact, it might just be the most important factor in managing your credit.

Here's how credit works. When you borrow money from a lender, you agree to make payments with interest on a set schedule until the debt is repaid in full. Good credit is established and maintained by making your payments on time. However, If you break the terms of that schedule by not making your payments, the lender will report the missed payments to the credit reporting agencies, and your credit score suffers. It’s that simple.

The more payments you miss, the lower your score will be. If you fail to make payments for over 120 days, the lender will most likely send your debt to be recovered by a collection agency. Collections stay on your report for a long time.

So the moment you realize you have missed a payment or as soon as you have the money for it, make the payment. If something prevents you from making a payment, consider contacting the lender directly to let them know what happened and work out an arrangement to make the payment as soon as possible.

It's good to note that lenders only report late payments after a payment is 30 days late. If you miss a payment on a Friday and catch it the following Monday, you won't have anything to worry about - except maybe an NSF fee.

Now, just because payments don't report until being 30 days late, don’t get comfortable with making late payments; the best advice is to pay your debts on time, as agreed.

Stop acquiring new credit.

If you already have at least two different trade lines, you shouldn’t acquire new trade lines just for the sake of it. Of course, if you need to borrow money, like to purchase a vehicle to commute to work, go ahead and apply. Just remember: having more credit available to you doesn’t really help your credit score. In fact, each time a potential lender looks at your credit report, it may lower your credit score a little bit.

With that said, if you already have two different trade lines and your lender offers you an increase on your limit, take it. A credit card with a $10k limit is better for you than a credit card with a $2k limit because how much you spend compared to your credit card's limit impacts your credit score. This leads us directly into the next point.

Keep a reasonable balance.

The more credit you use compared to the limit you have, the less creditworthy you appear. It’s better to carry a reasonable balance (15-25% of the card’s limit) and pay it off each month than to max out your credit cards and just make the minimum payments. If you have to spend more than 25% of your card limit, try to remain under 60%. That shows good utilization. Paying down your credit cards every month and carrying a zero balance will undoubtedly improve your credit score.

Check your credit report regularly.

Did you know that roughly 20% of credit reports have misinformation on them? Mistakes happen all the time. Lenders misreport information, or people with the same names get merged reports. Any number of things could be inaccurate without you knowing about it. You might even have become a victim of fraud or identity theft.

By checking your credit regularly, you can stay on top of everything and correct any errors promptly. Both of Canada's credit reporting agencies, Equifax and Transunion, have programs that, for a small fee, will monitor and update you on any changes made to your credit report.

Handle collections immediately.

When checking your credit report for accuracy, if you happen to find a collection has been registered against you, deal with it immediately. It could be a closed-out cell phone account with a small balance owing, a final utility bill that got missed, unpaid parking tickets, wage garnishments, or spousal support payments. Regardless of what it is, it will harm your credit score if it's registered on your credit report. The best plan of action is to handle any collections or delinquent accounts as soon as possible.

Use your credit card.

If you have acquired credit cards to build your credit score, but you rarely use them, there is a chance the lender might not report your usage, and that won’t help your credit score. You'll want to make sure that you use your credit at least once every three months. Many people find success using their credit cards for gas and groceries and paying off the outstanding balance each month.

There you have it. Regardless of what your credit looks like now, you will continue to increase your credit score if you follow the points outlined above.

If you're looking to buy a property and you’d like to work through your credit report in detail, let’s put together a plan to get you qualified for a mortgage. Get in touch anytime; it would be a pleasure to work with you!

Establishing New Credit

Thu, 12 Dec 2024 13:00:05 GMT

If you’re new to managing personal finance and you want to learn about credit, you’ve come to the right place. Establishing new credit is a bit of a catch-22. To build a credit history, you need credit. But it’s hard to get credit without having a credit history. So, where do you start?

Well, the first thing you should know is that building credit takes time. It’s not something that happens overnight. If you’re looking to secure mortgage financing, you will want to have a minimum of two trade lines (credit cards, loans, or lines of credit) with a minimum limit of $2500, reporting for at least two years.

If you don’t have any credit yet, the best time to get started is right now. However, that may be difficult because, as we've already identified, without a credit history, most lenders won’t feel confident about taking a chance on you. What’s the solution? Consider a secured credit card.

With a secured credit card, you make a deposit upfront that matches the amount you want to borrow. A reasonable amount would be $1000 deposited on a single secured credit card. You then use your secured credit card to make household purchases and regular utility payments, paying off the total balance each month. If you default on the money borrowed for whatever reason, the lender will retain the money you put up as collateral.

When looking for a secured credit card, be sure to ask whether they report to the two nationwide credit bureaus, Equifax and TransUnion. If the credit card company doesn't report, the credit card account will be useless for your purposes; move on until you find a company that reports to both credit bureaus.

Once your secured credit card begins reporting to the credit bureaus, you begin to have a credit score; usually, this takes about three months. Now you can start to seek out a second trade line in the form of an unsecured credit card. Don’t forget to ensure that this card reports to both of the credit reporting agencies. Another option at this point could be a car loan. From here, you simply want to make all your payments on time!

But what happens if you’re looking to secure mortgage financing before you have a fully established credit report?

Well, if you have someone who would consider co-signing, you can certainly go that route. The mortgage application will depend on their income and credit report, but your name will be on the mortgage. Hopefully, when the mortgage is up for renewal, you’ll have the established credit required to remove them from the mortgage and qualify on your own.

Although establishing credit takes a minimum of two years, it really begins with putting together a plan. If you’d like to discuss anything credit or mortgage-related, please get in touch!

Accessing Your Home Equity

Thu, 05 Dec 2024 13:00:05 GMT

If you've been a homeowner for many years, it is likely your property value has increased significantly. One advantage of homeownership is the opportunity to build equity. Home equity growth, partnered with the security of living in your own home, is why most Canadians believe homeownership is the best choice for them!

While home equity is one of your greatest assets, accessing home equity is often overlooked when putting together a comprehensive financial plan. So if you’re looking for a way to access some of your home equity, you’ve come to the right place!

Simply put, home equity is the actual market value of your property minus what you owe. For instance, if your home has a market value of $650k and you owe $150k, you have $500k in home equity.

If you want to stay in your home but also access the equity you have built up over the years, there are four options to consider.

Conventional Mortgage Refinance

Assuming you qualify for the mortgage, most lenders will allow you to borrow up to 80% of your property’s value through a conventional refinance.

Let’s say your property is worth $500k and you owe $300k on your existing mortgage. If you were to refinance up to 80%, you would qualify to borrow $400k. After paying out your first mortgage of $300k, you’d end up with $100k (minus any fees to break your mortgage) to spend however you like.

Even if you paid off your mortgage years ago and own your property with a clear title (no mortgage), you can secure a new mortgage on your property.

Reverse Mortgage

A reverse mortgage allows Canadian homeowners 55 or older to turn the equity in their home into tax-free cash. There is no income or credit verification; you maintain ownership of your home, and you aren't required to make any mortgage payments. The full amount of the mortgage will become due when you decide to move or sell.

Unlike a conventional mortgage refinance, reverse mortgages won’t allow you to borrow up to 80% of your home equity. Rather, you can access a lesser amount of equity depending on your age.

The interest rates on a reverse mortgage can be slightly higher than the best rates currently being offered through standard mortgage financing. However, the difference is not outrageous, and this is an option worth considering as the benefits of freeing up cash without mortgage payments provides you with increased flexibility.

Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit allows you to set up access to the equity you have in your home but only pay interest if you use it. Qualifying for a HELOC may be challenging as lender criteria can be pretty strict. Unlike a conventional mortgage, a HELOC doesn't usually have an amortization, so you're only required to make the interest payments on the amount you've borrowed.

Second Position Mortgage

If the cost to break your mortgage is really high, but you need access to cash before your existing mortgage renews, consider a second mortgage.

A second mortgage typically has a set amount of time in which you have to repay the loan (term) as well as a fixed interest rate. This rate is usually higher than conventional financing. After you have received the loan proceeds, you can spend the money any way you like, but you will need to make regular payments on the second mortgage until it's paid off.

If you’re looking for a way to access the equity in your home to free up some cash, please get in touch. You’ve got options, and we can work together to find the best option for you!

The Home Buying Process Explained

Thu, 21 Nov 2024 13:00:07 GMT

If you’re in the early stages of planning to buy either your first home or your next home, you’ve come to the right place! Even if you’ve been through it before, the home buying process can be daunting, but it doesn’t have to be when you have the right people on your side!

The purpose of this article is to share a high-level view of the home buying process. Obviously, the finer details can be addressed once you’ve submitted an application for pre-approval. But for now, here are some of the answers to general questions you may have as you work through your early preparations.

Are you credit-worthy?

Having an established credit profile is essential when applying for a mortgage. For your credit to be considered established, you’ll want to have a minimum of two trade lines (credit cards, loans, or lines of credit) with a minimum limit of $2500, reporting for a period of at least two years.

From there, you’ll want to make sure that your debt repayment is as close to flawless as possible. Think of it this way: Why would a lender want to lend you money if you don’t have a history of timely repayment on the loans you already have? Making your payments on time, as agreed, is crucial.

We all know, however, that mistakes can happen and payments might get missed. If that's the case, it’s best to catch up as quickly as possible! Late payments only register on your credit report if you're past due by 30 days.

How will you make your mortgage payments?

When providing you with a mortgage, lenders are trusting you with a lot of money. They'll want to feel really good about your ability to pay that money back, over an agreed period of time, with interest.

The more stable your employment, the better chances you have of securing mortgage financing. Typically, you’ll want to be employed in a permanent position or have your income averaged over a period of two years. If you’re self-employed, expect to provide a lot more documentation to substantiate your income.

How much skin do you have in the game?

If you're borrowing money to buy a home, you’re going to have to bring some money to the table. The best down payment comes from accumulating your own funds supported by documents proving a 90-day history in your bank account. Other down payment sources, such as a gift from a family member or proceeds from another property sale, are completely acceptable.

In Canada, 5% down is the minimum requirement. However, depending on the purchase price, it might be more. Also, you need to be aware that you will likely have to prove access to at least 1.5% of the purchase price to be allocated for closing costs.

How much can you afford?

Here’s the thing. What you can afford on paper and what you can afford in real life are often very different amounts. Just because you feel you can afford the proposed mortgage payments, know that you will have to substantiate everything through documentation.

The amount you actually qualify to borrow is based on many factors, certainly too many to list in an article designed to provide you with an overview of the home buying process. However, with that said, it’s never too early in the home buying process to seek professional advice. Our services come at no cost to you; it would be our pleasure to help.

Working with an independent mortgage professional will allow you to assess your credit-worthiness, provide insight on how a lender will view your income, help you plan for a down payment, and nail down exactly how much you can afford to borrow. And if you need help putting together a plan to improve your financial situation, we can do that too.

If you’d like to discuss your financial situation and put together a plan to secure mortgage financing, please get in touch!

What Are GDS/TDS Ratios Anyways?

Thu, 14 Nov 2024 13:00:05 GMT

One of the major qualifiers lenders look at when considering your application for mortgage financing is your debt service ratios.

Now, before we get started, if you prefer to have someone walk through these calculations with you, assess your financial situation, and let you know exactly where you stand, let’s connect. There is no use in dusting off the calculator and running the numbers yourself when we can do it for you!

However, if you’re someone who likes to know the nitty-gritty of how things work instead of simply accepting that's just the way it is, this article is for you. But be warned, there are a lot of mortgage words and some math ahead; with that out of the way, let’s get started!

“Debt servicing” is the measure of your ability to meet all of your financial obligations. There are two ratios that lenders examine to determine whether you can debt service a mortgage.

The first is called the “gross debt service” ratio, or GDS, which is the percentage of your monthly household income that covers your housing costs. The second is called the “total debt service” ratio, or TDS, which is the percentage of your monthly household income covering your housing costs and all your other debts.

GDS is your income compared to the cost of financing the mortgage, including your proposed mortgage payments (principal and interest), property taxes, and heat (PITH), plus a percentage of your condo fees (if applicable).

Here’s how to calculate your GDS.

Principal + Interest + Taxes + Heat / Gross Annual Income

Your TDS is your income compared to your GDS plus the payments made to service any existing debts. Debts include car loans, line of credit, credit card payments, support payments, student loans, and anywhere else you’re contractually obligated to make payments.

Here’s how to calculate your TDS.

Principal + Interest + Taxes + Heat + Other Debts / Gross Annual Income

With the calculations for those ratios in place, the next step is to understand that each lender has guidelines that outline a maximum GDS/TDS. Exceeding these guidelines will result in your mortgage application being declined, so the lower your GDS/TDS, the better.

If you don’t have any outstanding debts, your GDS and TDS will be the same number. This is a good thing!

The maximum ratios vary for conventional mortgage financing based on the lender and mortgage product being offered. However, if your mortgage is high ratio and mortgage default insurance is required, the maximum GDS is 39% with a maximum TDS of 44%.

So how does this play out in real life? Well, let’s say you’re currently looking to purchase a property with a payment of $1700/mth (PITH), and your total annual household income is $90,000 ($7500/mth). The calculations would be $1700 divided by $7500, which equals 0.227, giving you a gross debt service ratio of 22.7%.

A point of clarity here. When calculating the principal and interest portion of the payment, the Government of Canada has instituted a stress test. It requires you to qualify using the government's qualifying rate (which is higher), not the actual contract rate. This is true for both fixed and variable rate mortgages.

Now let’s continue with the scenario. Let’s say that in addition to the payments required to service the property, you have a car payment of $300/mth, child support payments of $500/mth, and between your credit cards and line of credit, you’re responsible for another $700/mth. In total, you pay $1500/mth. So when you add in the $1700/mth PITH, you arrive at a total of $3200/mth for all of your financial obligations. $3200 divided by $7500 equals 0.427, giving you a total debt service ratio of 42.7%.

Here’s where it gets interesting. Based on your GDS alone, you can easily afford the property. But when you factor in all your other expenses, the TDS exceeds the allowable limit of 42% (for an insured mortgage anyway). So why does this matter? Well, as it stands, you wouldn’t qualify for the mortgage, even though you are likely paying more than $1700/mth in rent.

So then, to qualify, it might be as simple as shuffling some of your debt to lower payments. Or maybe you have 10% of the purchase price saved for a downpayment, changing the mortgage structure to 5% down and using the additional 5% to pay out a portion of your debt might be the difference you need to bring it all together.

Here’s the thing, as your actual financial situation is most likely different than the one above, working with an independent mortgage professional is the best way to give yourself options. Don’t do this alone. Your best plan is to seek and rely on the advice provided by an experienced independent mortgage professional. While you might secure a handful of mortgages over your lifetime, we do this every day with people just like you.

It’s never too early to start the conversation about mortgage qualification. Going over your application and assessing your debt service ratios in detail beforehand gives you the time needed to make the financial moves necessary to put yourself in the best financial position.

So if you find yourself questioning what you can afford or if you want to discuss your GDS/TDS ratios to understand the mortgage process a little better, please get in touch. It would be a pleasure to work with you, we can get a preapproval started right away.

Collections Can Prevent Mortgage Financing

Thu, 31 Oct 2024 12:00:37 GMT

A question that comes up from time to time when discussing mortgage financing is, “If I have collections showing on my credit bureau, will that impact my ability to get a mortgage?” The answer might have a broader implication than what you might think; let's spend a little time discussing it.

Collections accounts are reported on your credit bureau when you have a debt that hasn’t been paid as agreed. Now, regardless of the reason for the collection; the collection is a result of delinquency, it’s an account you didn’t realize was in collections, or even if it’s a choice not to pay something because of moral reasons, all open collections will negatively impact your ability to secure new mortgage financing.

Delinquency

If you’re really late on paying on a loan, credit card, line of credit, or mortgage, and the lender has sent that account to collections, as they consider it a bad debt, this will certainly impact your ability to get new mortgage financing. Look at it this way, why would any lender want to extend new credit to you when you have a known history of not paying your existing debts as agreed?

If you happen to be late on your payments and the collection agencies are calling, the best plan would be to deal with the issue head-on. Settle the debts as quickly as possible and work towards establishing your credit. Very few (if any) lenders will even consider your mortgage application with open collections showing on your credit report.

If you’re unaware of bad debts

It happens a lot more than you’d think; people applying for a mortgage are completely unaware that they have delinquent accounts on their credit report. A common reason for this is that collection agencies are hired simply because the lender can’t reach someone.

Here’s an example. Let’s say you’re moving from one province to another for work, you pay the outstanding balance on your utility accounts, change your phone number, and make the move. And while you think you’ve paid the final amount owing, they read your meter, and there is $32 outstanding on your bill. As the utility company has no way of tracking you down, they send that amount to an agency that registers it on your credit report. You don't know any of this has happened and certainly would have paid the amount had you known it was due.

Alternatively, with over 20% of credit reports containing some level of inaccuracy, mistakes happen. If you’ve had collections in the past, there’s a chance they might be reporting inaccurately, even if it's been paid out.

So as far as your mortgage is concerned, it really doesn’t matter if the collection is a reporting error or a valid collection that you weren’t aware of. If it’s on your credit report, it’s your responsibility to prove it’s been remediated. Most lenders will accept documentation proving the account has been paid and won’t require those changes to reflect on your credit report before proceeding with a mortgage application.

So how do you know if you’ve got mistakes on your credit report? Well, you can either access your credit reports on your own or talk with an independent mortgage advisor to put together a mortgage preapproval. The preapproval process will uncover any issues holding you back. If there are any collections on your bureau, you can implement a plan to fix the problem before applying for a mortgage.

Moral Collections

What if you have purposefully chosen not to pay a collection, fine, bill, or debt for moral reasons? Or what if that account is sitting as an unpaid collection on your credit report because you dispute the subject matter?

Here are a few examples.

A disputed phone or utility bill
Unpaid alimony or child support
Unpaid collections for traffic tickets
Unpaid collections for COVID-19 fines

The truth is, lenders don’t care what the collection is for; they just want to see that you’ve dealt with it. They will be reluctant to extend new mortgage financing while you have an active collection reporting on your bureau.

So if you decide to take a moral stand on not paying a collection, please know that you run the risk of having that moral decision impact your ability to secure a mortgage in the future.

If you have any questions about this or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you!

What To Do Before Listing Your Home

Thu, 24 Oct 2024 12:00:06 GMT

Deciding to list your home for sale is a big decision. And while there are many reasons you might want/need to sell, here are 3 questions you should ask yourself; and have answers to, before taking that step.

What is my plan to get my property ready for sale?

Assessing the value of your home is an important first step. Talking with a real estate professional will help accomplish that. They will be able to tell you what comparable properties in your area have sold for and what you can expect to sell your property for. They will also know specific market conditions and be able to help you put a plan together.

But as you’re putting together that plan, here are a few discussion points to work through. A little time/money upfront might increase the final sale price.

Declutter and depersonalize
Minor repairs
A fresh coat of interior/exterior paint
New fixtures
Hire a home stager or designer
Exterior maintenance
Professional pictures and/or virtual tour

But then again, these are all just considerations; selling real estate isn’t an exact science. Current housing market conditions will shape this conversation. The best plan of action is to find a real estate professional you trust, ask a lot of questions, and listen to their advice.

What are the costs associated with selling?

Oftentimes it’s the simple math that can betray you. In your head, you do quick calculations; you take what you think your property will sell for and then subtract what you owe on your mortgage; the rest is profit! Well, not so fast. Costs add up when selling a home. Here is a list of costs you’ll want to consider.

Real estate commissions (plus tax)
Mortgage discharge fees and penalties
Lawyer’s fees
Utilities and property tax account settlements
Hiring movers and/or storage fees

Having the exact figures ahead of time allows you to make a better decision. Now, the real wildcard here is the potential mortgage penalty you might pay if you break your existing mortgage. If you need help figuring this number out, get in touch!

What is my plan going forward?

If you’re already considering selling your home, it would be fair to guess that you have your reasons. But as you move forward, make sure you have a plan that is free of assumptions.

If you plan to move from your existing property to another property that you will be purchasing, make sure you have worked through mortgage financing ahead of time.

Just because you’ve qualified for a mortgage in the past doesn’t mean you’ll qualify for a mortgage in the future. Depending on when you got your last mortgage, a lot could have changed. You’ll want to know exactly what you can qualify for before you sell your existing property.

If you’d like to talk through all your options, connect anytime! It would be a pleasure to work with you and provide you with professional, unbiased advice.

New 2025 Program Allows Homeowners to Refinance Up to 90% for Secondary Suites: What You Need to Know

Fri, 18 Oct 2024 23:21:15 GMT

On October 8, 2024, the government announced a new program that will take effect on January 15, 2025, allowing homeowners to refinance up to 90% of their home’s value to create secondary suites. This is a significant increase from the current refinancing limit of 80%. The program aims to provide homeowners with more flexibility to unlock their home equity and add additional legal units like basement suites or laneway homes, provided they meet municipal zoning requirements and are not used for short-term rentals.

The program comes with specific guidelines, outlined by CMHC (Canada Mortgage and Housing Corporation), that include:

Eligibility: Homeowners must already own their property, live in one of the existing units, and plan to add additional fully self-contained suites.
Refinancing Details: Homeowners can refinance up to 90% of the property's value, including the value added by the new units. The maximum property value, once the new units are built, must not exceed $2 million.
Loan Parameters: The loan-to-value limit will be 90%, and the maximum amortization period is 30 years. Any additional financing must not exceed project costs.

To give an example, under this new program, if a home is valued at $800,000, homeowners could now refinance up to $720,000 for building a secondary suite—$80,000 more than the previous limit of $640,000.

This program could be particularly beneficial for homeowners who have recently purchased their property and built up a moderate amount of equity, offering them an opportunity to create an income-generating suite or expand their home without needing to sell. As housing affordability continues to be a pressing issue in many parts of Canada, adding secondary suites could also contribute to easing the rental supply shortage.

While this program represents a significant step forward in unlocking home equity for homeowners, we are still awaiting specific guidelines from lenders. These rules will clarify how lenders will approach refinancing applications under this program. Stay tuned for further updates as more information becomes available from financial institutions.

This program is expected to spark significant interest, particularly from younger homeowners or those with growing families, as it offers a pathway to enhance both living space and long-term financial stability. Homeowners looking to leverage this new opportunity should consult with mortgage experts to fully understand the potential benefits and ensure they are making informed decisions.

If you're interested in how this program could benefit you or want to explore refinancing options to add a secondary suite, get in touch with a mortgage professional today.

Not All Mortgages Are Created Equally

Thu, 17 Oct 2024 12:00:09 GMT

A no-frills service or product is where non-essential features have been removed from the product or service to keep the price as low as possible.

And while keeping costs low at the expense of non-essential features might be okay when choosing something like which grocery store to shop at, which economy car to purchase, or which budget hotel to spend the night, it’s not a good idea when considering which lender to secure mortgage financing. Here’s why.

When securing mortgage financing, your goal should be to pay the least amount of money over the term. Your plan should include having provisions for unexpected life changes.

Unlike the inconvenience of shopping at a store that doesn’t provide free bags, or driving a car without power windows, or staying at a hotel without any amenities, the so-called “frills” that are stripped away to provide you with the lowest rate mortgage are the very things that could significantly impact your overall cost of borrowing.

Depending on the lender, a “no-frills” mortgage rate might be up to 0.20% lower than a fully-featured mortgage. And while this could potentially save you a few hundreds of dollars over a 5-year term, please understand that it could also potentially cost you thousands (if not tens of thousands) of dollars should you need to break your mortgage early.

So if you’re considering a “no-frills” mortgage, here are a few of the drawbacks to think through:

You'll pay a significantly higher penalty if you need to break your mortgage.
You'll have limited pre-payment privileges.
Potential limitations if you want to port your mortgage to a different property.
You might be limited in your ability to refinance your mortgage (without incurring a considerable penalty).

Simply put, a “no-frills” mortgage is an entirely restrictive mortgage that leaves you without any flexibility. There are many reasons you might need to keep your options open. You might need to break your term because of a job loss or marital breakdown, or maybe you decide to take a new job across the country, or you need to buy a property to accommodate your growing family. Life is unpredictable; flexibility matters.

So why do banks offer a no-frills mortgage anyway? Well, when you deal with a single bank or financial institution, it’s the banker’s job to make as much money from you as possible, even if that means locking you into a very restrictive mortgage product by offering a rock bottom rate. Banks know that 2 out of 3 people break their mortgage within three years (33 months).

However, when you seek the expert advice of an independent mortgage professional, you can expect to see mortgage options from several institutions showcasing mortgage products best suited for your needs. We have your best interest in mind and will help you through the entire process. A mortgage is so much more than just the lowest rate.

If you have any questions about this, or if you’d like to discuss anything else mortgage-related, please get in touch. Working with you would be a pleasure!

What To Do If You Have Missed A Payment

Thu, 10 Oct 2024 12:00:05 GMT

If you’ve missed a payment on your credit card or line of credit and you’re wondering how to handle things and if this will impact your creditworthiness down the road, this article is for you.

But before we get started, if you have an overdue balance on any of your credit cards at this exact moment, go, make the minimum payment right now. Seriously, log in to your internet banking and make the minimum payment. The rest can wait.

Here’s the good news, if you’ve just missed a payment by a couple of days, you have nothing to worry about. Credit reporting agencies only record when you’ve been 30, 60, and 90 days late on a payment. So, if you got busy and missed your minimum payment due date but made the payment as soon as you realized your error, as long as you haven’t been over 30 days late, it shouldn’t show up as a blemish on your credit report.

However, there’s nothing wrong with making sure. You can always call your credit card company and let them know what happened. Let them know that you missed the payment but that you paid it as soon as you could. Keeping in contact with them is the key. By giving them a quick call, if you have a history of timely payments, they might even go ahead and refund the interest that accumulated on the missed payment. You never know unless you ask!

Now, if you’re having some cash flow issues, and you’ve been 30, 60, or 90 days late on payments, and you haven’t made the minimum payment, your creditworthiness has probably taken a hit. The best thing you can do is make all the minimum payments on your accounts as soon as possible.

Getting up to date as quickly as possible will mitigate the damage to your credit score. The worst thing you can do is bury your head in the sand and ignore the problem, because it won’t go away.

If you cannot make your payments, the best action plan is to contact your lender regularly until you can. They want to work with you! The last thing they want is radio silence on your end. If they haven’t heard from you after repeated missed payments, they might write off your balance as “bad debt” and assign it to a collection agency. Collections and bad debts look bad on your credit report.

As far as qualifying for a mortgage goes, repeated missed payments will negatively impact your ability to get a mortgage. But once you’re back to making regular payments, the more time that goes by, the better your credit will get. It’s all about timing. Always try to be as current as possible with your payments.

So If you plan to buy a property in the next couple of years, it’s never too early to work through your financing, especially if you’ve missed a payment or two in the last couple of years and you’re unsure of where you stand with your credit.

Please connect directly; it would be a pleasure to walk through your mortgage application and credit report. Let’s look and see exactly where you stand and what steps you need to take to qualify for a mortgage.

How Do You Port a Mortgage?

Thu, 03 Oct 2024 12:00:07 GMT

Porting your mortgage is when you transfer the remainder of your current mortgage term, outstanding principal balance, and interest rate to a new property if you’re selling your existing home and buying a new one.

Now, despite what some big banks would lead you to believe, porting your mortgage is not an easy process. It’s not a magic process that guarantees you will qualify to purchase a new property using the mortgage you had on a previous property.

In addition to re-qualifying for the mortgage you already have, the lender will also assess the property you’re looking to purchase. Many moving parts come into play. You’re more likely to have significant setbacks throughout the process than you are to execute a flawless port. Here are some of the reasons:

You may not qualify for the mortgage

Let’s say you’re moving to a new city to take a new job. If you’re relying on porting your mortgage to buy a new property, you’ll have to substantiate your new income. If you’re on probation or changed professions, there’s a chance the lender will decline your application. Porting a mortgage is a lot like qualifying for a new mortgage, just with more conditions.

The property you are buying has to be approved

So let’s say that your income isn’t an issue and that you qualify for the mortgage. The subject property you want to purchase has to be approved as well. Just because the lender accepted your last property as collateral for the mortgage doesn’t mean the lender will accept the new property. The lender will require an appraisal and scrutinize the condition of the property you’re looking to buy.

Property values are rarely the same

Chances are, if you’re selling a property and buying a new one, there’ll be some price difference. When looking to port a mortgage, if the new property’s value is higher than your previous property, requiring a higher mortgage amount, you’ll most likely have to take a blended rate on the new money, which could increase your payment. If the property value is considerably less, you might incur a penalty to reduce the total mortgage amount.

You still need a downpayment

Porting a mortgage isn’t just a simple case of swapping one property for another while keeping the same mortgage. You’re still required to come up with a downpayment on the new property.

You’ll most likely have to pay a penalty

Most lenders will charge the total discharge penalty when you sell your property and take it from the sale proceeds. The penalty is then refunded when you execute the port and purchase the new property. So if you are relying on the proceeds of sale to come up with your downpayment, you might have to make other arrangements.

Timelines rarely work out

When assessing the housing market, It’s usually a buyer’s market or a seller’s market, not both at the same time. So although you may be able to sell your property overnight, you might not be able to find a suitable property to buy. Alternatively, you may be able to find many suitable properties to purchase while your house sits on the market with no showings.

And, chances are, when you end up selling your property and find a new property to buy, the closing dates rarely match up perfectly.

Different lenders have different port periods

Understanding that different lenders have different port periods is where the fine print in the mortgage documents comes into play. Did you know that depending on the lender, the time you have to port your mortgage can range from one day to six months? So if it’s one day, your lawyer will have to close both the sale of your property and the purchase of your new property on the same day, or the port won’t work.

Or, with a more extended port period, you run the risk of selling your house with the intention of porting the mortgage, only to not be able to find a suitable property to buy.

So while the idea of porting your mortgage can seem like a good idea, and it might even make sense if you have a low rate that you want to carry over to a property of similar value, it’s always a good idea to get professional mortgage advice and look at all your options.

While porting your mortgage is a nice feature to have because it provides you with options, please understand that it is not a guarantee that you’ll be able to swap out properties and keep making the same payments. There’s a lot to know.

If you’re looking to sell your existing property and buy a new one, please connect anytime. It would be a pleasure to walk you through the process and help you consider all your options, including a port if that makes the most sense!

OSFI Announces Removal of Stress Test for Uninsured Mortgage Switches

Mon, 30 Sep 2024 19:35:31 GMT

Starting November 21, 2024, borrowers switching lenders with uninsured mortgages will no longer face the stress test, thanks to a new policy from OSFI. Previously, uninsured borrowers needed to prove they could afford their mortgage at a higher rate, which created barriers to switching for better terms. This change encourages competition among lenders and aligns the rules with insured mortgages, providing more flexibility and choice for homeowners.

The decision responds to concerns raised by the Competition Bureau and reflects shifting risk management trends in the mortgage market.

Key Points:

Applies to Straight Switches: This policy is for borrowers switching lenders while maintaining their loan amount and amortization schedule.
Stress Test Removed: No more proving affordability at higher rates during switches, allowing for easier access to competitive offers.
Supports Borrower Flexibility: Homeowners now have more options to find the best mortgage rates at renewal without the stress test obstacle.

Why the Change?

OSFI initially maintained the stress test to manage risk but has now reversed this stance after evaluating that the original concerns have not significantly materialized. This move is designed to balance fairness for borrowers and enhance competition in the mortgage market.

How It Affects You

For those with uninsured mortgages approaching renewal, this policy change is a win. You'll now have the opportunity to seek out better mortgage rates without facing a stress test, making it easier to reduce financial strain, especially in a rising interest rate environment.

Stay informed and take advantage of these changes by reviewing your mortgage options today!

What Is A Spousal Buyout?

Thu, 19 Sep 2024 12:00:44 GMT

If you’re going through or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property and buy out your ex-spouse.

If you’re like most people, your property is your most significant asset and is where most of your equity is tied up. If this is the case, it’s possible to structure a new mortgage that allows you to purchase the property from your ex-spouse for up to 95% of the property’s value. Alternatively, if your ex-spouse wants to keep the property, they can buy you out using the same program.

It’s called the spousal buyout program. Here are some of the common questions people have about the program.

Is a finalized separation agreement required?

Yes. To qualify, you’ll need to provide the lender with a copy of the signed separation agreement, which clearly outlines asset allocation.

Can the net proceeds be used for home renovations or pay off loans?

No. The net proceeds can only buy out the other owner’s share of equity and/or pay off joint debt as explicitly agreed upon in the finalized separation agreement.

What is the maximum amount that you can access through the program?

The maximum equity you can withdraw is the amount agreed upon in the separation agreement to buy out the other owner’s share of the property and/or retire joint debts (if any), not exceeding 95% loan to value.

What is the maximum permitted loan to value?

The maximum loan to value is the lesser of 95% or the remaining mortgage + the equity required to buy out other owner and/or pay off joint debt (which, in some cases, can total < 95% LTV. The property must be the primary owner-occupied residence.

Do all parties have to be on title?

Yes. All parties to the transaction have to be current registered owners on title. Your solicitor will be required to confirm this with a title search.

Do the parties have to be a married or common-law couple?

No. Not only will the spousal buyout program support married and common-law couples who are divorcing or separating, but it’s also designed for friends or siblings who need an exit from a mortgage. The lender can consider this on an exception basis with insurer approval. In this case, as there won’t be a separation agreement, a standard clause will need to be included in the purchase contract to outline the buyout.

Is a full appraisal required?

Yes. When considering this type of mortgage, a physical appraisal of the property is required as part of the necessary documents to finalize the transaction.

While this is a good start to answering some of the questions you might have about getting a mortgage to help you through a marital breakdown, it’s certainly not comprehensive. When you work with an independent mortgage professional, not only do you get a choice between lenders and considerably more mortgage options, but you get the unbiased mortgage advice to ensure you understand all your options and get the right mortgage for you.

Please connect anytime; it would be a pleasure to discuss your needs directly and provide you with options to help you secure the best mortgage financing available. Also, please be assured that all communication will be held in the strictest of confidence.

New Mortgage Rules Make Homeownership More Affordable for Canadians

Tue, 17 Sep 2024 21:34:58 GMT

As of August 1, 2024, the federal government introduced changes to support homebuyers, particularly Millennials and Gen Z. First-time homebuyers purchasing new builds can now access 30-year insured mortgage amortizations , reducing monthly payments and making it easier to afford a home.

Additionally, as of December 15, 2024, several major reforms will take effect:

The price cap for insured mortgages will rise from $1 million to $1.5 million, helping more Canadians qualify for mortgages with less than 20% down.
30-year amortizations will be available to all first-time homebuyers and buyers of new builds , including condominiums. This expansion will incentivize new housing supply, addressing the country’s housing shortage and making homeownership more accessible.

These reforms are part of a broader housing strategy that includes the Canadian Mortgage Charter , which enables insured mortgage holders to switch lenders without undergoing a new stress test at renewal. This promotes competition among lenders, ensuring more Canadians can access better mortgage deals.

In addition to these housing measures, the government has introduced the Renters' Bill of Rights and the Home Buyers' Bill of Rights to protect Canadians from unfair practices, ensure transparency in leases and sales, and simplify homebuying procedures. With $5 billion available through the Canada Housing Infrastructure Fund , the federal government is working with provinces and territories to make housing fairer and more accessible for all Canadians.

Stay tuned for further updates, and if you’re planning to buy a home or need more information, book a call with me to learn how these new rules can benefit you!

New Mortgage Rules and CMHC Updates: A Guide for First-Time Buyers

Tue, 17 Sep 2024 21:34:14 GMT

In Budget 2024, the Canadian government introduced significant changes to help first-time homebuyers by extending mortgage amortization periods up to 30 years for those purchasing newly built homes. Effective August 1, 2024, this change will help ease monthly mortgage payments, making homeownership more accessible.

Key Eligibility Criteria for First-Time Buyers:

First-Time Buyer Status: At least one borrower must qualify as a first-time homebuyer, meaning they have either never owned a home, haven't lived in a home they owned in the past four years, or recently went through a marriage breakdown.
Newly Built Homes: The property must be a newly constructed home that has never been occupied.

These extended mortgages will only apply to high-ratio mortgages (loans covering more than 80% of the home’s purchase price) and are limited to owner-occupied properties. All other mortgage insurance eligibility criteria remain unchanged.

CMHC’s New Amortization Rules for Market MLI and MLI Select Programs

The Canada Mortgage and Housing Corporation (CMHC) has also introduced changes. As of June 19, 2024, the maximum amortization period for new construction market projects will increase from 40 years to 50 years. Additionally, the maximum period for re-amortization (for default management) will extend to 55 years for loans under the MLI Select Program.

These changes aim to encourage the construction of more rental housing units while managing housing affordability. CMHC’s modifications also include updates to energy efficiency criteria, lowering the maximum points from 100 to 50 based on energy efficiency, which means developers may need to shift focus toward affordable units to receive maximum benefits.

Changes to "Use of Funds" and Refinancing

CMHC has lifted restrictions on how refinanced funds can be used, reverting to pre-2020 rules. This allows non-approved lenders to offer bridge loans, creating more flexibility in financing options.

Environmental Site Contamination Policies

In response to industry practices, CMHC is reviewing its environmental site contamination policies. For now, projects with known site contamination will be accepted under conditional approval, pending a contamination-free site confirmation.

Why These Changes Matter

For first-time homebuyers, the ability to spread mortgage payments over 30 years is a welcome relief in today’s housing market, particularly for newly built homes. These changes are designed to improve housing affordability and supply, especially for younger Canadians looking to purchase their first home.

Meanwhile, CMHC’s new rules around extended amortizations and energy efficiency adjustments will have a significant impact on developers, especially those focused on building rental properties or using energy-efficient technologies in their projects.

If you're considering buying a home or developing a property, these changes could impact your strategy. To fully understand how these updates may apply to your situation, it's important to consult with a mortgage expert who can offer personalized advice.

Want to know how these changes could affect your home buying or property development plans? Book a call with a mortgage expert today to explore your options!

Assigning A Construction Mortgage

Thu, 12 Sep 2024 12:00:06 GMT

The good news is, there are lenders available exclusively through the broker channel that have favourable policies for assignment purchases.

Here are some of the highlights:

All standard purchase qualifications apply, including applicable income verification, established credit, and required downpayment
Assignments can be at the original purchase price or current market value
Minimum 620 beacon score with no previous bankruptcies or consumer proposals
The full downpayment must come from the purchaser and not include any incentives from the seller.

How Payment Frequency Impacts Mortgage Financing

Thu, 05 Sep 2024 12:00:04 GMT

You’ve most likely heard that there are two certainties in life; death and taxes. Well, as it relates to your mortgage, the single certainty is that you will pay back what you borrow, plus interest. With that said, the frequency of how often you make payments to the lender is somewhat up to you!

The following looks at the different types of payment frequencies and how they impact your mortgage.

Here are the six payment frequency types

Monthly payments – 12 payments per year
Semi-Monthly payments – 24 payments per year
Bi-weekly payments – 26 payments per year
Weekly payments – 52 payments per year
Accelerated bi-weekly payments – 26 payments per year
Accelerated weekly payments – 52 payments per year

Options one through four are straightforward and designed to match your payment frequency with your employer. So if you get paid monthly, it makes sense to arrange your mortgage payments to come out a few days after payday. If you get paid every second Friday, it might make sense to have your mortgage payments match your payday.

However, options five and six have that word accelerated before the payment frequency. Accelerated bi-weekly and accelerated weekly payments accelerate how fast you pay down your mortgage. Choosing the accelerated option allows you to lower your overall cost of borrowing on autopilot. Here’s how it works.

With the accelerated bi-weekly payment frequency, you make 26 payments in the year. Instead of dividing the total annual payment by 26 payments, you divide the total yearly payment by 24 payments as if you set the payments as semi-monthly. Then you make 26 payments on the bi-weekly frequency at the higher amount.

So let’s use a $1000 payment as the example:

Monthly payments formula: $1000/1 with 12 payments per year. A payment of $1000 is made once per month for a total of $12,000 paid per year.

Semi-monthly formula: $1000/2 with 24 payments per year. A payment of $500 is paid twice per month for a total of $12,000 paid per year.

Bi-weekly formula: $1000 x 12 / 26 with 26 payments per year. A payment of $461.54 is made every second week for a total of $12,000 paid per year.

Accelerated bi-weekly formula: $1000/2 with 26 payments per year. A payment of $500 is made every second week for a total of $13,000 paid per year.

You see, by making the accelerated bi-weekly payments, it’s like you end up making two extra payments each year. By making a higher payment amount, you reduce your mortgage principal, which saves interest on the entire life of your mortgage.

The payments for accelerated weekly payments work the same way. It’s just that you’d be making 52 payments a year instead of 26.

By choosing an accelerated option for your payment frequency, you lower the overall cost of borrowing by making small extra payments as part of your regular payment schedule.

Now, exactly how much you’ll save over the life of your mortgage is hard to nail down. Calculations are hard to do because of the many variables; mortgages come with different amortization periods and terms with varying interest rates along the way. However, an accelerated bi-weekly payment schedule could reduce your amortization by up to three years if maintained throughout the life of your mortgage.

If you’d like to look at some of the numbers as they relate to you and your mortgage, please don’t hesitate to connect anytime; it would be a pleasure to work with you.

My Process for Mortgage Renewals and Refinances

Thu, 29 Aug 2024 12:00:07 GMT

Whether your mortgage is coming up for renewal or you're considering a refinance, you deserve to know all your options.

Most people simply accept their existing lender's renewal offer without shopping around, often leaving thousands of dollars on the table.

I've designed a straightforward process to analyze your options across 50+ lenders and present clear recommendations so you can make an informed decision.

Here's how it works.

Step 1: The Discovery Call

We start with a conversation where I learn about your current situation and goals.

For Renewals, I'll ask about:

When is your renewal date?
What rate are you currently paying?
What has your existing lender offered your for your renewal options?
Have there been changes in your financial situation?
Do you want to adjust your payment or amortization?
Are you planning to stay in this property long-term?

For Refinances, I'll ask about:

What are you looking to accomplish? (Access equity, consolidate debt, renovations, etc.)
How much equity do you have?
What's your current mortgage balance and rate?
What's your timeline?

In both cases, we'll discuss:

Your financial goals for the next 3-5 years
Your comfort level with different payment amounts
Whether you want fixed or variable rate options

What to expect: 30 to 45 minutes. Bring details on income, debts, current mortgage, and goals.

Step 2: Application and Documentation

After our call, I'll send you a secure link to complete your application, along with a tailored document request list.

The Application

Many questions will seem familiar from our call. This redundancy is intentional and helps me catch any discrepancies.

The Documents

Typical items for renewals and refinances:

Government ID
Income verification
Recent mortgage statement and current property tax bill
Home insurance details
Void cheque or PAD form

· If refinancing: Details on any debts you're consolidating

You can review my general document checklists below:

Critical rule: Do not edit, adjust, or redact any documents. Lenders need to see everything in its original form.

Step 3: Analysis and Options Review

Once I have your application and documents, I'll analyze your situation in detail.

After my analysis, I'll send you a personalized video walkthrough that outlines:

All your options clearly explained
Pros and cons of each option
My recommendations
Next steps if you want to proceed

I typically present 3-5 options to keep it clear and digestible.

After you review the video and initial options we can schedule another call to go through any questions you might have or I can evaluate any other options you would like to consider.

Step 4: You Decide and We Move Forward

After reviewing your options, you decide how to proceed.

You might choose to:

Accept your current lender's renewal offer
Switch to a new lender for better rates or terms
Proceed with a refinance
Wait and revisit closer to your renewal date

There's no pressure. My job is to provide complete information so you can make the best decision.

Once you decide, I handle everything: negotiating with lenders, managing paperwork, coordinating with your lawyer/notary, and ensuring everything closes smoothly.

What Makes My Approach Different

Full underwriting up front : fewer surprises, faster approvals.
50+ lenders : competitive pricing and better fit on policy and features.
Numbers you can trust : complete cost and savings analysis, not just the rate.
Clear recommendation : I explain trade-offs so you can choose with confidence.

Timeline Expectations

For Renewals:

Start 4-6 months before your renewal date
Switching lenders takes 4-6 weeks
Staying with your current lender can be done in days

For Refinances:

Typically 4-6 weeks from start to finish

Common Questions

When should I start the renewal process?

Start 4-6 months before your maturity date. This gives time to compare options and ensure a smooth transition.

What if I want to stay with my current lender?

That's fine! At least you'll know their offer is competitive.

How much does refinancing cost?

Typical costs include legal fees ($1,200-$1,800), appraisal if required ($300-$500), and potentially a discharge fee ($300-$400). Many costs can be rolled into the new mortgage.

Can I refinance if I'm self-employed?

Yes, though documentation requirements may be more extensive. I work with many self-employed clients and understand how to present income effectively.

Quick Summary

My process for renewals and refinances:

Discovery Call: Discuss your current mortgage, goals, and financial situation
Application & Documents: Complete application and provide supporting documents
Analysis & Options Review: Receive clear video breakdown with recommendations
You Decide: Choose how to proceed; I handle all the details

Result : A clean, numbers-driven decision that improves your mortgage, your cash flow, or both.

Next Steps

Ready to review your renewal or explore a refinance? Let’s talk.

Book a consultation or call 778-988-8409 .

Glossary

Equity: The difference between your home's current value and what you owe on your mortgage.

Lender: A financial institution that provides mortgage financing. This can be a bank, credit union, monoline lender, or other regulated lending institution.

Mortgage Renewal: Setting up a new term when your current term expires. Your balance continues, but you negotiate a new rate and term.

Mortgage Refinance: Replacing your existing mortgage with a new one, often to access equity or consolidate debt.

Maturity Date: The date your current mortgage term ends and renewal is required.

Penalty: A fee charged if you pay off your mortgage before the term ends.

Why The Subject Property Matters

Thu, 22 Aug 2024 12:00:06 GMT

Parental Leave

Thu, 15 Aug 2024 12:00:37 GMT

Chances are if the title of this article piqued your interest enough to get you here, your family is probably growing. Congratulations!

The advantage of working with an independent mortgage professional is choice. You have a choice between lenders and mortgage products, including lenders who use 100% of your return-to-work income.

To qualify, you’ll need an employment letter from your current employer that states the following:

Your employer’s name preferably on the company letterhead
Your position
Your initial start date to ensure you’ve passed any probationary period
Your scheduled return to work date
Your guaranteed salary

If you have any questions about this or anything else mortgage-related, please connect anytime. It would be a pleasure to work with you.

Deposit Lending And Bridge Financing

Thu, 08 Aug 2024 12:01:01 GMT

But what if you need the money from the sale of your existing home to come up with the downpayment for your next home? This situation is where bridge financing comes in.

A firm sale is the key to securing bridge financing and a deposit loan.

So if you’d like to know more about bridge financing, deposit loans, or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you.

How To Get A Mortgage After Bankruptcy

Thu, 01 Aug 2024 12:00:04 GMT

Sometimes life throws you a financial curveball. Bankruptcy and consumer proposals happen. It doesn’t mean your life is over, and it doesn’t mean you won’t ever qualify for a mortgage again.

So if you’re thinking about getting a mortgage post-bankruptcy, lenders will want answers to the following questions:

How long have you been discharged?

Have you established new credit?

How much do you have available for a downpayment?

What is your total debt service ratio?

Conventional or insured financing.

If you’re looking to get the best mortgage products available, here are some of the things a lender will want to see:

You’ve been discharged for at least two years plus a day.
You’ve established your credit (as listed above).
You have at least 5% down for the first $500k of the purchase and 10% down for anything over $500k.
If you don’t have a 20% downpayment, you will be required to secure mortgage insurance through CMHC, Sagen (formerly Genworth), or Canada Guaranty.
The cost to service the property and all your debts don’t exceed 44% of your gross income.

Alternative lending

Get in touch anytime.

Understanding HELOCs: How They Work and When to Use One

Sun, 28 Jul 2024 21:19:23 GMT

You might come across the term HELOC when talking about mortgages or borrowing options. It stands for Home Equity Line of Credit , and is a flexible loan that lets you access the value you’ve built up in your home.

Even though HELOCs are fairly common, they’re often misunderstood. Many people aren’t sure how they actually work, how they differ from a mortgage, or when using one makes sense.

Whether you already own a home or are planning to buy one, understanding HELOCs can help you make smarter financial decisions. Let’s look at what they are, how they work, and when they can (and can’t) be a good idea.

What Is a HELOC?

A Home Equity Line of Credit (HELOC) lets you borrow money using the value you’ve built up in your home as security.

Before we get into the details, let’s start with the basics. A line of credit is a flexible loan with a set limit that you can borrow from as needed. You only pay interest on the amount you actually use, and you can repay and borrow again within your limit. This ability to borrow, repay, and borrow again makes it a revolving loan, which is different from an instalment loan like a mortgage, where you receive a lump sum and make regular payments until it’s fully paid off.

Now, a HELOC takes this concept and secures it against your house. Like a mortgage, if you fail to make the required payments, the lender can take and sell your house to recover their money. That’s why it’s important to treat a HELOC as a financial tool, not extra spending money.

Here’s a simple way to think about it:

Your home has value.
You likely have a mortgage, which is the amount you still owe.
The difference between what your home is worth and what you owe is your equity.
A HELOC allows you to borrow against that equity, turning part of your home’s value into available cash.
The amount you can borrow depends on both your available equity and your income , which lenders review when determining your limit.

How Is the Limit Determined?

The amount you can borrow through a HELOC depends on your home’s value, how much you still owe on your mortgage, and your income.

Based on your equity

The total amount of all loans secured by your home (your mortgage plus your HELOC) cannot exceed 80% of your home’s appraised value.
The HELOC portion specifically cannot exceed 65% of that value.

So even if you have a lot of equity, lenders won’t approve a HELOC beyond these limits.

Based on your Income

Having enough equity in your home doesn’t automatically mean you qualify. Lenders also need to confirm that your income can support both your mortgage and the full HELOC limit, even if you don’t plan to use it all.

Each lender has its own approach for calculating your borrowing capacity. Some calculate the combined mortgage and HELOC balance at the HELOC rate, while others use a mix of the mortgage rate and HELOC rate. But all of them apply a mortgage stress test —they add 2% to the contract rate(s) to make sure your total housing costs don’t exceed 44% of your gross income .

This stress test ensures you can comfortably manage payments even if interest rates rise or your income changes.

How Rates and Payments Work

The only required payments on a HELOC are the interest payments . However, it's important to have a plan to pay back both the interest and the borrowed principal. Otherwise, you're just paying interest forever without actually reducing what you owe.

The interest rate on a HELOC is variable , meaning it moves up or down with the Bank of Canada’s rate . Lenders typically base HELOC rates on their prime rate , with most ranging from prime to prime + 0.5% .

To put this in perspective:

HELOC rates usually range from prime to prime + 0.5%
Variable-rate mortgages are typically below prime
Unsecured lines of credit often range from prime + 2% to 4%

This makes HELOCs more expensive than variable mortgages but considerably cheaper than unsecured lines of credit.

Even though HELOC rates are usually higher than variable mortgage rates, the required payment is often lower (for the same principal amount) because you’re only paying the interest each month, not the principal. This can make a HELOC useful when managing short-term cash flow, but it’s still important to have a plan to start paying down the balance over time.

What Is a Re-Advanceable HELOC?

A re-advanceable HELOC automatically increases your available credit limit as you pay down your mortgage. For example, every time you reduce your mortgage principal, your HELOC limit grows, giving you access to more of your home’s equity over time.

In the past, your HELOC limit would increase dollar-for-dollar with each dollar of mortgage principal repaid. However, current rules limit the HELOC portion to 65% of your home’s value . This means your available limit still grows as you pay off your mortgage, but it will never exceed that 65% cap.

This structure can be useful if you want ongoing access to funds for renovations, investments, or other purposes over time.

What Can a HELOC Be Used For?

You can use a HELOC for anything, but since you're borrowing money that needs to be repaid with interest, it's important to use it wisely and have a repayment plan.

Common uses include:

Emergency fund: Having access to funds when unexpected expenses arise
Cash flow management: Managing short-term gaps between income and expenses
Investing: HELOC Interest may be tax-deductible if used for investment purposes.
Home renovations: Improve your property and potentially increase its value. (typically with a plan to refinance once complete)
Debt consolidation: Replace higher-interest debt with lower-cost borrowing.

Just remember, a HELOC is not free money. You’re borrowing against your home, and misuse can put that home at risk. I always recommend consulting with a trusted professional before borrowing from your HELOC to ensure the plan aligns with your overall financial goals and you won't overextend yourself.

Real-World Example

Let's say your home is worth $1,000,000 and you have a $600,000 mortgage. You could get a HELOC for up to $200,000, assuming you have enough income to qualify for the overall limit of $800,000.

Here's the breakdown:

Home value: $1,000,000
Maximum total debt allowed (80%): $800,000
Current mortgage: $600,000
Available HELOC room: $200,000

Quick Summary

HELOC (Home Equity Line of Credit): A revolving loan secured by your home.
Total borrowing limit: Up to 80% of your home’s value (mortgage + HELOC combined).
HELOC portion: Cannot exceed 65% of your home’s value.
Rates: Variable, typically ranging from prime to prime + 0.5%.
Payments: Interest-only required, but paying down principal is important to reduce long-term interest costs.
Qualification: Based on income, credit, and a stress test—not just home equity.
Re-advanceable HELOCs : The available limit increases automatically as you pay down your mortgage principal.
Use wisely: Renovations, investments, or debt consolidation, not day-to-day spending.

Next Steps

If you’re considering a HELOC or wondering how it fits into your financial plan, let’s review your options together.

Need help with your mortgage? Book a consultation or call 778-988-8409.

Glossary

Equity: The difference between your home’s market value and the amount you owe on your mortgage. For example, if your home is worth $800,000 and you owe $500,000, you have $300,000 in equity.
HELOC (Home Equity Line of Credit): A revolving line of credit secured by your home that lets you borrow against your equity up to a set limit.
Prime Rate: The base rate banks use to set variable lending rates. It’s influenced by the Bank of Canada’s policy rate and affects variable mortgages and HELOCs.
Principal: The amount of money you borrow, not including interest.
Re-advanceable HELOC: A type of HELOC where your available credit limit increases automatically as you pay down your mortgage principal.
Revolving Loan: A loan that allows you to borrow, repay, and borrow again up to your credit limit, similar to a credit card.
Secured Line of Credit: A loan that uses an asset, such as your home, as collateral.
Stress Test: A qualification rule that ensures you can afford mortgage payments if rates rise, usually tested at 2% above your actual rate.
Variable Rate: An interest rate that changes over time with the Bank of Canada’s rate and market conditions.

Older Canadians Have Mortgage Options

tim@lyonmtg.com (Tim Lyon) — Thu, 25 Jul 2024 12:00:03 GMT

So if you find yourself in the position where you’re considering your mortgage options into retirement, you’ve come to the right place.

Here are some options available to older Canadians as they plan for mortgage financing through their retirement.

Standard Mortgage Financing

Reverse Mortgage Financing

Home Equity Line of Credit (HELOC)

Private Financing

If you have any questions about securing mortgage financing for your retirement, please connect anytime. It would be a pleasure to work with you and walk you through all your options.

What You Need To Know About Online Mortgage Calculators

Thu, 18 Jul 2024 12:00:04 GMT

If you rely on the numbers from a “What can I afford” or “Mortgage Qualification” calculator without talking to an independent mortgage professional, you’re going to be misinformed.

Please connect anytime if you’d like to talk more about your financial situation and get a preapproval started. It would be a pleasure to work with you.

Going Through A Divorce? Protect your Credit

Thu, 11 Jul 2024 12:00:03 GMT

Manage Your Joint Debt

Manage Your Bank Accounts

Setup New Credit in Your Name

If you have any questions about managing your credit through a divorce, please don’t hesitate to connect anytime. It would be a pleasure to work with you.

How Employment Status Impacts Your Mortgage Application

Thu, 04 Jul 2024 12:00:03 GMT

So, regardless of how you feel about your position, it’s what can be proven on paper that matters most. Let’s walk through some of the common ways lenders can look at employment status.

Permanent Employment

Probationary Period

Parental Leave

Term Contracts

In summary

Deposit vs. Down Payment in Canada: What’s the Difference and Why It Matters

Thu, 27 Jun 2024 11:00:02 GMT

If you're buying your first home—or even your second or third—there are dozens of terms flying around that sound similar but mean very different things. Two of the most commonly confused? Down payment and deposit .

They both involve money. They both happen during the buying process. But they serve completely different purposes, come due at different times, and mixing them up can create serious stress (and financial headaches).

This post breaks down what each term means, when the money is due, and how to avoid common mistakes that can cost you real dollars.

What is a Down Payment?

Your down payment is the portion of the home's purchase price that you pay out of pocket—before the mortgage kicks in. It's your initial equity in the property.

How it Works

Let's say you're buying a home for $500,000. You have $100,000 saved up, and you secure a mortgage for the remaining $400,000. That $100,000 you're contributing? That's your down payment. It represents 20% of the home's price.

Your down payment percentage matters because it determines whether you'll need to pay mortgage default insurance (also called CMHC insurance). If your down payment is less than 20% of the purchase price, you'll be required to purchase this insurance, which protects the lender in case you default on the loan. The insurance premium is added to your mortgage balance.

When its Due

Your down payment is due at closing, the day the transaction completes.

What is a Deposit?

Your deposit is an upfront amount you pay when you finalize your purchase agreement with the seller. It's a sign of good faith that shows you're serious about buying the home.

How it Works

When you make an offer on a home and it's accepted, you'll typically include conditions (called "subjects") like financing approval or a home inspection. Once those conditions are satisfied and you remove the subjects—meaning the deal is now firm and you're committed to buying—you pay the deposit.

The deposit is held in a trust account, usually by the selling realtor's brokerage, until the deal closes. At closing, your deposit is applied toward your down payment.

When its Due

The deposit is due when your offer goes firm, which happens at subject removal. This is typically within a few days to a couple of weeks after your offer is accepted, depending on the terms of your contract.

How much is it?

Deposits generally range around 5% of the home's purchase price, but the exact amount is negotiable and depends on the terms of your offer.

How Do They Work Together?

The deposit is paid first, when subjects are removed and the offer is firm. It is part of your down payment.
The rest of your down payment is due on closing, along with your closing costs.

Important Considerations

Do not agree to a deposit that is larger than your actual down payment amount if you are planning a minimum down payment. A too-large deposit can create a cash crunch because the mortgage will not cover it. Coordinate with your realtor and plan for any gifts, investment sales, or other funds in advance.
Make sure deposit funds are liquid and accessible for subject removal. They cannot be tied up in pending transfers or investments when you need to write the cheque or send the wire.

Real-World Example

Scenario: Purchase price $600,000

Offer goes firm: You pay a 5 percent deposit of $30,000 into the listing brokerage’s trust account. This money is now committed to the deal and will be applied to your down payment at closing.
Closing day: You planned a 10 percent total down payment of $60,000. Since you already paid $30,000 as the deposit, you bring the remaining $30,000 to your lawyer along with closing costs. Your mortgage funds the rest.

What can go wrong

If you only intended a 5 percent down payment but agreed to a 7 percent deposit, you would need extra cash quickly to meet that deposit. Avoid this mismatch.

Quick Summary

Down payment: Your total contribution to the purchase, paid at closing. Sets your loan size and may affect insurance.
Deposit: Good-faith money when your offer goes firm, sits in trust, and counts toward your down payment. Usually about 5 percent. Risk of loss if the deal does not complete.
Pro tip: Align your deposit with your planned down payment and ensure funds are liquid on subject removal.

Next Steps

Planning a purchase and unsure how much to put down or how large your deposit should be? I can help you structure the numbers and the timing so you stay on track. Book a consultation or call 778-988-8409 .

Glossary

Deposit: The good-faith amount you pay when your offer goes firm; held in trust and applied to your down payment at closing. Typically about 5 percent of the price.

Down Payment: The portion of the purchase price you pay out of pocket at closing; determines your mortgage size and may affect default insurance.

Equity: The difference between the value of your home and what you owe on your mortgage.

Mortgage Default Insurance: Insurance required on certain purchases based on down payment percentage; protects the lender, not the borrower.

Subject Removal: The point when all conditions in the offer are satisfied and the deal becomes firm, which is when the deposit is typically due.

Selling Your Property? Let's Talk

Thu, 13 Jun 2024 11:00:02 GMT

And while talking with your mortgage professional might not sound like the most logical place to start, here are a few scenarios that explain why it makes the most sense.

If you’re buying a new property

If you’re not buying a new property

Marital breakdown

If you’d like to discuss the sale of your property and your plans for the future, connect anytime. It would be a pleasure to work with you!

When to Have Your Money Ready? A Timeline for Home Buyers

tim@lyonmtg.com (Tim Lyon) — Thu, 06 Jun 2024 11:00:00 GMT

Understanding when and how to pay for your home

You’ve decided how much you’ll use for your down payment and set aside money for closing costs —but when do you actually need to have the funds ready? How do you make such a large payment? And who do you give it to?

Here’s a simple timeline of when each payment is due, how it’s made, and who handles it.

The Two Key Payments You'll Make

When buying a home, your down payment isn't paid all at once. It's split into two separate payments at different times:

The Deposit
The Remaining Down Payment (plus closing costs)

Let's walk through each one.

1. The Deposit

What Is It?

The deposit is typically around 5% of the purchase price , though this amount is negotiable with the seller. Think of it as a good-faith payment showing you're serious about the purchase.

When Is It Due?

The timing depends on what's written in your purchase agreement. Common clauses include:

At subject removal
Within 24 hours of subject removal
Within 48 hours of subject removal

In most cases, you'll need the deposit ready within a week or two of getting an accepted offer.

How Do You Pay It?
You’ll pay your deposit with a bank draft made out to your realtor’s trust account . Your realtor will provide the exact details.

The realtor’s brokerage will hold your deposit in trust until closing day , when it’s sent to your lawyer or notary . The deposit forms part of your total down payment—it’s not an extra cost.

2. The Remaining Down Payment and Closing Costs

What Is It?

This is the rest of your down payment, along with most of your closing costs, including:

Property transfer tax
Legal fees
Title insurance
Adjustments (property taxes, strata fees, etc.)

When Is It Due?

You'll pay this amount when you visit your lawyer or notary to sign the final mortgage documents and title transfer paperwork. This appointment typically happens 3 to 5 days before closing , though it can vary depending on the situation.

Your lawyer or notary will tell you the exact amount you need to bring to this appointment.

How Do You Pay It?

Again, you'll pay with a bank draft made out to your lawyer or notary's trust account.

What Happens with All These Funds?

Your lawyer or notary acts as the central hub for all the money involved in your transaction. Here's how it flows:

They receive:

Your initial deposit (from the realtor's trust account)
Your remaining down payment and closing costs (from you)
The mortgage funds (from your lender)

They distribute:

The full down payment plus mortgage funds to the seller
Property transfer tax to the government
Title insurance premium to the insurer
Any adjustments to the seller
Their legal fees

Everything gets sorted in one coordinated process on closing day.

Other Payments to Plan For

Appraisal (if required): Paid directly to the appraiser before the appraisal is completed. I'll help you coordinate this.

Home Inspection: Paid directly to the inspector. Your realtor will help you coordinate this.

Key Points to Keep in Mind

If your down payment or deposit funds are in an investment or registered account , plan ahead— redemptions take time depending on your financial institution.
You’ll need to have your deposit funds ready within a week or two of getting an accepted offer.
Your down payment and closing costs must be available 3–5 days before closing.
If you bank with an online-only bank (Tangerine, Wealthsimple, EQ, etc.), allow at least a week to obtain a bank draft.

Frequently Asked Questions

Q: If my funds are spread across multiple accounts or shared with another borrower, can we use more than one bank draft?
A: Usually yes, as long as they total the required amount. Confirm with your realtor (for the deposit) or your lawyer/notary (for the down payment).

Q: My down payment is invested—when should I sell my investments?
A: As long as the funds are in your chequing account 3–5 days before closing , you’re fine. But to avoid market swings and stress, it’s best to liquidate once you’ve removed subjects . You might miss a small gain, but you’ll have certainty that your down payment is secure.

Q: How do I get a bank draft?
A: Go to your local bank branch and ask for one. You’ll need to specify the recipient name (for example, your realtor’s or lawyer’s trust account) and the amount .

Q: How long does it take to get a bank draft?
A: If your bank has local branches, it should take 10–15 minutes . With online-only banks, plan for a week or more .

Q: How do I withdraw funds from my RRSP or FHSA for my down payment?
A:
If your down payment is coming from a registered account , it’s important to understand the process:

For RRSP withdrawals , you’ll use the Home Buyers’ Plan (HBP) . Learn more here: How to withdraw from RRSP .
For FHSA withdrawals , the funds can be taken out tax-free when used for a qualifying home purchase. Learn more here: How to withdraw from FHSA .

Both withdrawals take time to process, so plan early to ensure funds are available before closing.

Quick Summary

Deposit: ~5% of the purchase price, due at subject removal , payable by bank draft to your realtor’s trust account.
Down payment + closing costs: Due 3–5 days before closing , paid by bank draft to your lawyer or notary .
Allow extra time if your funds are in investments or an online-only bank.
Appraisal and inspection are paid directly before those services take place.

Next Steps

The key to a smooth closing is knowing these timelines and planning accordingly. If you're unsure about any part of the process, or if your down payment situation is more complex, I'm here to walk you through it.

Book a consultation or call 778-988-8409 .

Glossary

Bank Draft:
A certified payment issued by your bank, guaranteeing funds to the recipient.

Closing Costs:
Expenses due at closing, including legal fees, taxes, title insurance, and adjustments.

Deposit:
Funds paid at subject removal to secure your offer, held in trust until closing and applied toward your down payment.

Down Payment:
The amount you contribute toward the purchase price of your home.

Subject Removal:
The point in your offer process when you confirm financing and inspections are complete, making your purchase binding.

Paying Off Your Mortgage As Quickly As Possible

Thu, 30 May 2024 11:00:01 GMT

Being a home owner is excellent, having a huge mortgage isn’t. So, if you have a mortgage that you’re looking to get rid of as quickly as possible, here are four things you should consider doing.

Accelerate your payments

Increase your regular mortgage payments

Make a lump-sum payment

Review your options regularly

If you’ve got questions about your existing mortgage or want to compare your mortgage to options available today, please connect anytime. It would be a pleasure to work with you.

Mortgage Financing Explained

Thu, 23 May 2024 11:00:03 GMT

When assessing the suitability of a mortgage, your number one goal should be to keep your cost of borrowing as low as possible. And contrary to conventional wisdom, this doesn’t always mean choosing the mortgage with the lowest rate. It means thinking through your financial and life situation and choosing the mortgage that best suits your needs.

Choosing a mortgage with a low rate is a part of lowering your borrowing costs, but it’s certainly not the only factor. There are many other factors to consider; here are a few of them:

How long do you anticipate living in the property? This will help you decide on an appropriate term.
Do you plan on moving for work, or do you need the flexibility to move in the future? This could help you decide if portability is important to you.
What does the prepayment penalty look like if you have to break your term? This is probably the biggest factor in lowering your overall cost of borrowing.
How is the lender’s interest rate differential calculated, what figures do they use? This is very tough to figure out on your own. Get help.
What are the prepayment privileges? If you’d like to pay down your mortgage faster.
How is the mortgage registered on the title? This could impact your ability to switch to another lender upon renewal without incurring new legal costs, or it could mean increased flexibility down the line.
Should you consider a fixed rate, variable rate, HELOC, or a reverse mortgage? There are many different types of mortgages; each has its own pros and cons.
What is the size of your downpayment? Coming up with more money down might lower (or eliminate) mortgage insurance premiums, saving you thousands of dollars.

What You Need To Know About Co-Signing A Mortgage

Thu, 16 May 2024 11:00:00 GMT

You’re fully responsible for the mortgage.

You’re on the mortgage until they can qualify to remove you.

Co-signing a mortgage impacts your debt service ratio.

As this could significantly impact the amount you could borrow in the future, before you co-sign a mortgage, you’ll want to assess your financial future and decide if co-signing makes sense.

Co-signing a mortgage means helping someone get ahead.

If you have any questions about co-signing on a mortgage or about the mortgage application process in general, please connect anytime. It would be a pleasure to work with you.

Understanding My 3-Step Mortgage Pre-Approval Process

Thu, 09 May 2024 11:00:00 GMT

Getting pre-approved is your first real step toward homeownership. It tells you what you can afford, gives you confidence when shopping, and shows sellers you're a serious buyer.

I've designed a thorough three-step process to ensure the pre-approval you receive is accurate and reliable. Unlike quick online estimates, I fully analyze your file the same way a lender will, catching potential issues early when we have time to fix them.

Here's how it works.

Step 1: The Discovery Call

Before anything else, we start with a conversation.
This is where I properly introduce myself and learn about what you’re trying to do, whether that’s buying your first home, upsizing, or planning a future purchase.

During this call, I’ll ask a lot of questions. This helps me understand:

Your financial situation
Your homeownership goals
Your comfort level with payments
Any potential challenges we should plan for

The better I understand your situation, the more accurate and relevant your pre-approval will be.

What to expect: 30-45 minutes. Come prepared to discuss your finances openly.

Step 2: Application and Documentation

After our call, I’ll send you a secure link to complete your mortgage application, along with a tailored document request list.

The Application

Many questions will seem familiar from our call. This redundancy is intentional - it helps me catch any discrepancies and ensures nothing slips through the cracks.

The Documents

This is the most tedious part, but it's essential. Everything on a mortgage application needs supporting documentation.

I'll provide a complete list with instructions. If you want to get an early idea of the type of documents that will be required. you can review my general document checklist here: Mortgage Pre-Approval Document Checklist

Critical rule: Do not edit, adjust, or redact any documents. Lenders need to see everything in its original form. Even innocent edits can cause delays or issues.

Step 3: Review and Pre-Approval

Once I’ve received your application and documents, I’ll get to work reviewing your file in detail. This is where I fully underwrite your pre-approval, meaning I look at your file the same way a lender ultimately will.

This approach lets me:

Identify any small issues early, such as:
Incorrect or outdated credit items
Down payment funds that aren’t readily accessible
Differences between actual income and what lenders will use
Low or borderline credit scores
Fix or plan around potential problems before they become deal-breakers later

After the review, I’ll send you a personalized video walkthrough of your pre-approval, outlining:

What you qualify for
The options available to you
My analysis and recommendations

I typically present 3–5 options so it’s clear and not overwhelming—but if you want to explore additional scenarios, I’m always happy to dig deeper.

Once you’ve received your video and pre-approval summary, you’re officially pre-approved .

At this point, you can shop with confidence.

What Makes My Pre-Approvals Different

My pre-approval is my expert analysis of what you'll qualify for, based on my thorough understanding of lender guidelines. At this stage, no lender has reviewed your file yet - that happens after you have an accepted offer.

You might wonder: "If a lender hasn't seen my file, how can I trust this?"

Here's why you can shop with confidence:

I analyze your file the exact same way a lender will. With access to over 50 lenders, I understand what each one looks for, how they calculate income, what down payment sources they accept, and their credit requirements.

I catch issues before they become problems. By thoroughly reviewing everything myself, I identify concerns early when we have time to address them - not when you're under pressure with an accepted offer.

I take responsibility for accuracy. When I tell you what you're pre-approved for, I'm putting my professional reputation behind that assessment.

This approach gives you flexibility. Once you find your property, we can choose the optimal lender for your specific situation rather than being locked into one lender from the start.

Quick Summary

My 3-step pre-approval process:

Discovery Call: We discuss your goals and financial details.
Application & Documents: You complete your application and send supporting documents.
Full Review & Video Summary: I analyze your options, flag issues early, and send you a clear breakdown of your pre-approval.

Bonus: Every pre-approval I issue is fully underwritten so you can move forward with confidence and avoid last-minute stress.

Next Steps

If you’re ready to start your pre-approval or just want to understand your options, let’s set up a call.

Book a consultation or call 778-988-8409 .

How Much Does It Actually Cost To Buy Property?

Thu, 02 May 2024 11:00:00 GMT

Inspection or Appraisal

Lawyer or Notary Fees

Taxes

Insurance

Moving Expenses

Utilities

If you have any questions about your closing costs or anything else mortgage-related, please connect anytime; it would be great to hear from you!

Alternative Lending

Thu, 25 Apr 2024 11:00:00 GMT

Damaged Credit

Self-Employment

Non-traditional income

Welcome to the new frontier of earning an income.

If you make money through non-traditional employment like Airbnb, tips, commissions, Uber, or Uber eats, alternative lending is more likely to be flexible to your needs.

Expanded Debt-Service Ratios

Connect anytime

Please connect anytime if you’d like to discuss mortgage financing and what alternative lending products might suit your needs; it would be a pleasure to work with you.

A First Home Savings Account (FHSA)

Fri, 19 Apr 2024 07:30:00 GMT

Dreaming of owning your first home? A First Home Savings Account (FHSA) could be your key to turning that dream into a reality. Let's dive into what an FHSA is, how it works, and why it's a smart investment for first-time homebuyers.

What is an FHSA?

An FHSA is a registered plan designed to help you save for your first home taxfree. If you're at least 18 years old, have a Social Insurance Number (SIN), and have not owned a home where you lived for the past four calendar years, you may be eligible to open an FHSA.

Reasons to Invest in an FHSA:

Save up to $40,000 for your first home.
Contribute tax-free for up to 15 years.
Carry over unused contribution room to the next year, up to a maximum of $8,000.
Potentially reduce your tax bill and carry forward undeducted contributions indefinitely.
Pay no taxes on investment earnings.
Complements the Home Buyers’ Plan (HBP).

How Does an FHSA Work?

Open Your FHSA: Start investing tax-free by opening your FHSA.
Contribute Often: Make tax-deductible contributions of up to $8,000 annually to help your money grow faster.
Withdraw for Your Home: Make a tax-free withdrawal at any time to purchase your first home.

Benefits of an FHSA:

Tax-Deductible Contributions: Contribute up to $8,000 annually, reducing your taxable income.
Tax-Free Earnings: Enjoy tax-free growth on your investments within the FHSA.
No Taxes on Withdrawals: Pay $0 in taxes on withdrawals used to buy a qualifying home.

Numbers to Know:

$8,000: Annual tax-deductible FHSA contribution limit.
$40,000: Lifetime FHSA contribution limit.
$0: Taxes on FHSA earnings when used for a qualifying home purchase.

In Conclusion

A First Home Savings Account (FHSA) is a powerful tool for first-time homebuyers, offering tax benefits and a structured approach to saving for homeownership. By taking advantage of an FHSA, you can accelerate your journey towards owning your first home and make your dream a reality sooner than you think.

Understanding the Recent Housing Affordability Measures in Canada

Fri, 19 Apr 2024 07:15:00 GMT

Increased Home Buyer's Plan (HBP) Withdrawal Limit

Extended Repayment Period for HBP Withdrawals

30-Year Mortgage Amortizations for Newly Built Homes

Changes to the Canadian Mortgage Charter

Why You Should Work With An Independent Mortgage Professional

Thu, 18 Apr 2024 11:00:00 GMT

However, if you’d like to dig a little deeper, here are some reasons that outline why working with an independent mortgage professional is in your best interest.

The best mortgage is the one that costs you the least over the long term. An independent mortgage professional can help you achieve this.

Working the numbers with an independent mortgage professional will save you money in the long run instead of just going with what a single lender is offering.

Save time by letting an independent mortgage professional find the best mortgage product for you.

Let's face it, getting a mortgage can be challenging enough on its own. Everyone’s financial situation is a little different and making sense of lender guidelines is a full-time job in itself.

Simply put, an independent mortgage professional works for you and has your best interest in mind, while a bank specialist works for the bank and has the bank's best interest in mind.

If you’d like to know more or to discuss mortgage financing, please connect anytime; it would be a pleasure to work with you.

Simplifying The Mortgage Process

tim@lyonmtg.com (Tim Lyon) — Thu, 11 Apr 2024 11:00:00 GMT

So there you have it, six steps to ensuring a smooth home purchase:

Work with an independent mortgage professional.
Put together a mortgage plan.
Figure out what you can actually afford.
Get a pre-approval.
Provide the necessary documentation.
Don’t change anything about your financial situation until you take possession.

If you’d like to discuss your personal financial situation and find the best mortgage product for you, let’s work together. We can figure out a plan to buy a home as stress-free as possible.

Please connect anytime; it would be a pleasure to work with you.

Cashback Mortgage Financing

Thu, 04 Apr 2024 11:00:01 GMT

How you use the cash is entirely up to you. Some of the most common reasons to secure a cashback mortgage are to:

Cover closing costs.
Buy new furniture.
Renovate your property.
Supplement cashflow.
Consolidate higher-interest debt.

Really, you can use the cash for anything you like. It’s tax-free and paid to you directly once the mortgage closes.

Understanding the cost of a cashback mortgage.

A cashback mortgage is like getting a fixed loan rolled into your mortgage. Your interest rate is increased to cover the additional funds being lent.

Eligibility for a cashback mortgage.

Breaking your mortgage term early.

In addition to paying a higher interest rate to cover the cost of receiving the cashback at closing, a cashback mortgage also limits your options down the line.

Get independent mortgage advice.

If you’d like to discuss what a cashback mortgage or any other mortgage product would look like for you, please get in touch. It would be a pleasure to work with you.

Financing For A Second Home

Thu, 28 Mar 2024 11:00:00 GMT

If you’ve been thinking about buying a second property and you’re looking to put some of the pieces together, you’ve come to the right place!

Now, while there are many great reasons to buy a second property, there is also a lot to know as you walk through the process. The key here is to have absolute clarity around your why.

Securing a new mortgage if you own your property clear title
Refinancing your existing mortgage to access additional funds
Securing a home equity line of credit (HELOC)
Getting a second mortgage behind your existing first mortgage
Securing a reverse mortgage

Understanding Payment Frequency

tim@lyonmtg.com (Tim Lyon) — Sun, 24 Mar 2024 07:15:02 GMT

One of the most common questions I get is: “Which mortgage payment frequency is best?” It’s a great question, and while the math can look complicated, the good news is there's not really a wrong answer. But understanding how each option works (and how much you'll actually save) can help you make the right choice for your situation. This post aims to help you come to that understanding.

What Are the Different Payment Frequencies?

Most lenders offer a few common options for how often you make your payments. The exact names can vary slightly, but these are the typical choices:

How Mortgage Payments Work

Before we compare these options, it helps to understand how mortgage payments are calculated.

Mortgage payments are made in arrears , which is a fancy way of saying you pay at the end of the pay period, not the beginning. If you're making monthly payments, your April 1st payment covers the month of March. This is the opposite of rent, where you typically pay at the beginning of the month.

Your mortgage payment always pays the interest portion first . Using the example above, interest accumulates for all 31 days in March. When you make your April 1st payment, you first pay off all that accumulated interest, and then the rest goes toward paying down your principal balance.

This is why more frequent payments can save you money—there's less time for interest to accumulate before it gets paid off.

How Much Will More Frequent Payments Save You?

Here’s an example using the same mortgage across all payment options:

Mortgage amount: $400,000
Interest rate: 5.0% (compounded monthly)
Amortization: 25 years
Term: 5 years

What Do These Numbers Tell Us?

For standard payment frequencies (non-accelerated) , paying more frequently saves you around $30 to $45 per year. That works out to less than $4 per month—not exactly life-changing.

For accelerated payments , the savings are much more significant. These payments are calculated by dividing your monthly payment by 2 (for bi-weekly) or 4 (for weekly), which means you end up making the equivalent of one extra monthly payment each year. That extra amount goes directly toward reducing your principal.

Comparing bi-weekly to accelerated bi-weekly:

You pay an additional $2,369.64 per year
Over the 5-year term, that's $11,848.20 in extra payments
Your balance will be $13,444.21 lower at the end of 5 years
Net savings in interest: $1,596.01 over five years

Important Considerations

Cash Flow Matters Most
The best payment frequency is the one that aligns with your income schedule. If you're paid bi-weekly, bi-weekly payments might feel more natural. If you prefer to see one payment per month, monthly payments work just fine.
Accelerated Payments Are Like Forced Savings
If you can afford the slightly higher annual commitment, accelerated payments are an excellent way to build equity faster. But don't stretch yourself too thin—you need to maintain this payment for the life of your term.
You Have Other Options Too
Regardless of your payment frequency, most mortgages allow lump sum prepayments . This means you can make extra payments whenever you have extra cash, without committing to a higher regular payment schedule.

Quick Summary

Standard payment frequencies (monthly, semi-monthly, bi-weekly, weekly) have minimal differences, typically less than $4 per month.
Accelerated payments (accelerated bi-weekly or weekly) create meaningful savings by adding the equivalent of one extra monthly payment per year.
Choose the frequency that matches your cash flow —there's no single "best" option for everyone.
Lump sum prepayments are always available if you want flexibility to pay down your mortgage without changing your regular payment schedule.
The difference between accelerated bi-weekly and accelerated weekly is negligible—pick whichever aligns better with your pay schedule.

Choosing the Right Option?

The best payment frequency is the one that fits your financial situation and makes it easy to stay on track with your payments. Whether you prefer the simplicity of monthly payments or want to use accelerated payments as a forced savings strategy, what matters most is choosing an option you can comfortably maintain.

Have questions about your mortgage payment options? I'm here to help you find the right fit for your situation.

Book a consultation or call 778-988-8409 .

Glossary

Accelerated Payments: A payment schedule where your regular payment is calculated by dividing the monthly payment by 2 (bi-weekly) or 4 (weekly), resulting in approximately one extra monthly payment per year that reduces your principal faster.
Amortization: The total time it takes to pay off your mortgage in full (usually 25–30 years).
Arrears: Payments made after the period they cover (mortgage payments are in arrears).
Bi-Weekly: Every two weeks, resulting in 26 payments per year
Principal: The amount you borrow, not including interest.
Semi-Monthly: Twice per month, typically on the 1st and 15th, resulting in exactly 24 payments per year.
Term: The length of time your current mortgage agreement and interest rate are locked in, typically 1-5 years. After your term ends, you renew your mortgage.

Mortgage Refinance To Consolidate Debt

Thu, 21 Mar 2024 11:00:00 GMT

If you’re a homeowner looking to optimize your finances, consider taking advantage of your home’s equity to reposition any existing debts you may have.

If you’ve accumulated consumer debt, the payments required to service these debts can make it difficult to manage your daily finances. A consolidation mortgage might be a great option for you!

Simply put, debt repositioning or debt consolidation is when you combine your consumer debt with a mortgage secured to your home. To make this happen, you’ll borrow against your home’s equity.

Some of the types of debts that you can consolidate are:

Credit Card
Unsecured Line of Credit
Car Loan
Student Loans
Personal or Payday Loans

Debt consolidation makes sense because it allows you to take high-interest unsecured debts and reposition them into a single low payment.

While there is a lot to unpack here, if you’d like to discuss what using a mortgage to reposition your debts could look like for you, here’s a simple plan we can follow:

First, we’ll assess your existing debt to income ratio.
We’ll establish your home’s equity.
We’ll consider all your mortgage options.
Lastly, we’ll reposition your debts to help optimize your finances.

If this sounds like the plan for you, the best place to start is to connect directly. It would be a pleasure to work with you.

Don't Accidentally Buy A Home

Thu, 14 Mar 2024 11:00:00 GMT

Fair warning, this article might get a little cheeky.

Quit your job.

Spend All Your Savings.

Collect as Much Debt as Possible.

After quitting your job and spending all your savings, you should definitely go out and incur as much debt as possible! The higher the payments, the better.

Stop Making Your Debt Payments

Why would any lender want to lend you money when you have a track record of not paying back any of the money you’ve already borrowed?

Provide Ugly Supporting Documentation.

Firstly, and probably the most straightforward, make sure your name doesn’t appear anywhere on any of your statements. This way, the lender can’t be sure the documents are actually yours or not.

And lastly, consider blacking out all your “personal information.” Just use a black Sharpie and make your paperwork look like classified FBI documents.

Follow-Through

If you'd like to make sure you're on the right track, connect anytime. It would be a pleasure to walk through the mortgage process with you.

Difference Between A Standard And Collateral Mortgage

Thu, 07 Mar 2024 12:00:02 GMT

Standard charge mortgage

Collateral charge mortgage

A home equity line of credit is a good example of a collateral charge mortgage.

So what’s a better option for you?

So if you’d like to have a conversation about mortgage financing, please get in touch. It would be a pleasure to work with you and answer any questions you might have.

How To Get The Best Mortgage

Thu, 29 Feb 2024 12:00:00 GMT

Here are four things that your bank won’t tell you, accompanied by four reasons that explain why working with an independent mortgage professional is in your best interest.

Banks have Limited Access to Mortgage Products.

Banks Employ Salespeople, not Mortgage Experts.

Banks don’t have your best interest in mind. In fact, the more money they make off of you, the better it is for their bottom line.

When you work with an independent mortgage professional, everyone wins. You get the best mortgage available, we get paid a standardized finder’s fee, and the lender gets a new borrower.

Banks Rarely Offer You Their Best Terms Upfront.

Banks are in the business of making money, and they’re usually pretty good at it. As such, banks will rarely offer you their best terms at the outset of your negotiation.

Banks Promote Restrictive Mortgage Products.

When you work with an independent mortgage professional, we take the time to listen to your goals and assess your mortgage needs based on your life circumstances.

Working with an Independent Mortgage Professional is in Your Best Interest.

Banks have limitations to the mortgage products they offer. Working with an independent mortgage professional gives you mortgage options!

Bankers work for the bank; they are incentivized to make money for the bank. An independent mortgage professional advocates on your behalf to get you the best mortgage available.

Banks rarely offer their best terms upfront; they leave negotiations up to you. An independent mortgage professional outlines the best terms from multiple lenders at the start of the process.

So if you’d like to talk about the best mortgage product for you, you’ve come to the right place. Please connect anytime. It would be a pleasure to work with you.

Going From A Variable Rate To A Fixed Rate Mortgage

tim@lyonmtg.com (Tim Lyon) — Thu, 22 Feb 2024 12:00:00 GMT

Interest rates on fixed rate mortgages

Penalties on fixed rate mortgages

The flexibility of a variable rate mortgage vs the cost of breaking a fixed rate mortgage is likely another reason you went with a variable rate in the first place.

Breaking your mortgage contract

Here’s is a list of potential reasons you might need to break your mortgage before the end of the term. Certainly worth reviewing before committing to a fixed rate mortgage.

Sale of your property because of a job relocation.
Purchase of a new home.
Access equity from your home.
Refinance your home to pay off consumer debt.
Refinance your home to fund a new business.
Because you got married, you combine assets and want to live together in a new property.
Because you got divorced, you need to split up your assets and access the equity in your property
Because you or someone close to you got sick
Because you lost your job or because you got a new one
You want to remove someone from the title.
You want to pay off your mortgage before the maturity date.

If you’d like to discuss this in greater detail, please connect anytime. It would be a pleasure to walk you through all your mortgage options and provide you with professional mortgage advice.

Why a Credit Check Is Essential for the Mortgage Process (And Why You Shouldn't Worry)

Thu, 15 Feb 2024 12:00:00 GMT

I get it. The idea of someone checking your credit can feel uncomfortable. Maybe you're worried about the impact on your score, or you're unsure what I'll find. Many clients feel this way before their first credit check.

Here's the truth: a credit check is one of the most valuable steps in any mortgage process. It protects you by revealing potential issues early, ensures I'm working with accurate information, and has minimal long-term impact on your credit score. Let me break down exactly why this matters and what you can expect.

Why Credit Checks Are Non-Negotiable

When I work on your mortgage, I need to see what lenders will see. This isn't about judgment. It's about accuracy and catching problems before they affect your approval or rate.

The consumer credit reports you can access for free (from Equifax, Credit Karma, Borrowell, and others) often show different scores than what lenders and I use. The difference varies by client and bureau, but it can be significant. If you think your score is 720 based on a consumer report, but lenders see 680, that's a problem we need to address upfront.

More importantly, some issues don't appear on consumer reports at all. I've had clients with old phone bills or closed credit cards showing missed payments on their lender report that weren't visible on their consumer report. These surprises can drag down your score and affect your mortgage options.

What Happens During a Credit Check

When I run your credit for a mortgage pre-approval, it's called a hard inquiry. Yes, this type of check does appear on your credit report and can have a small impact on your score.

Here's what you need to know:

The impact is minimal. Your score may dip slightly, but how much depends on your overall credit profile.
Recovery is quick. The effect diminishes over time, typically within a few weeks or months depending on your borrower profile.
Multiple mortgage checks count as one. If I check your credit and then a lender checks it during your application, those inquiries are grouped together as a single check. This applies as long as all checks happen within 45 days for Equifax or 2 weeks for TransUnion.
People with perfect credit have bureau checks too. I've seen clients with scores in the high 800s who have multiple inquiries listed. Credit checks are a normal part of financial life.

The Hidden Benefit: Catching Issues Early

This is where the credit check becomes invaluable. When I review your report, I'm looking for red flags that could hurt your approval or cost you a better rate:

Old accounts you forgot about with late payments dragging your score down
Errors or inaccuracies that need to be corrected
High credit utilization that's easy to fix
Signs of fraud or identity theft

If we find an issue, we have time to deal with it. Resolving problems with vendors or credit bureaus can take anywhere from days to weeks. Discovering these issues early gives us a buffer to fix them before we need to submit your application.

If we wait until you need urgent financing or you're up against a deadline, we may not have time to correct these issues. That could mean accepting a higher rate, having fewer lender options, or dealing with unnecessary stress.

Understanding Your Credit Score

Your credit score ranges from 300 to 900 and helps lenders evaluate how likely you are to repay your debts on time.

Here's how scores are generally viewed:

760 and up: Excellent
725 to 759: Very Good
660 to 724: Good
560 to 659: Fair
300 to 559: Poor

Your score is calculated based on several factors:

Payment History (Most Important): Your repayment behavior, number and types of accounts, and whether you pay on time.
Credit Utilization: How much of your available credit you're using. Keeping your credit cards and lines of credit under 30% of their limits is ideal.
Length of Credit History: How long you've had your credit accounts. Longer is better, as long as accounts are in good standing.
Types of Credit: The variety of credit you manage responsibly (credit cards, lines of credit, car loans, student loans, mortgages).
Inquiries: How often your credit file is accessed. Multiple inquiries can signal financial stress, but mortgage-related inquiries within a short timeframe are grouped together.

Not all credit checks impact your score. Soft checks, including when you check your own score, are not counted against you.

Real-World Examples: Errors That Could Have Derailed Approvals

I've seen countless credit report errors over the years. Here are a few scenarios where catching these issues early made all the difference:

The Phone Bill in the Wrong Name

A client came to me with a credit score well below the acceptable threshold for approval. When I reviewed their report, I found a phone bill account with numerous missed payments dragging down their score.

They contacted the phone company and discovered the account didn't even belong to them. The provider had another customer with the same name and had been reporting to the wrong credit bureau. We got the issue resolved and the account removed from my client's report. Without catching this early, they wouldn't have been able to get approved.

The $4 Charge on a Closed Account

Another client closed a credit card in 2019 after paying off the full balance. What she didn't know was that a $4 charge was billed the month after she closed the account for some residual fee. Since the account was closed, she never saw the bill.

That $4 charge sat there reporting as a missed payment month over month, dramatically impacting her credit score. She was able to sort it out with the bank and provide proof to the credit bureau, who updated her profile accordingly.

I've seen multiple variations of these scenarios: accounts registered to the wrong name, old accounts that should have closed but didn't, charges appearing after closure. These errors happen more often than you'd think.

The Broker Advantage

Here's something most people don't know: as a mortgage broker, I have a special line to Equifax that allows me to get disputes resolved in days compared to the consumer process, which can take weeks to months. When we find an error, I can help expedite the resolution so it doesn't hold up your mortgage approval or cost you a better rate.

If my clients in these examples had waited until they were further into the mortgage process to run their credit, we wouldn't have had time to fix these issues. They could have been forced to accept higher interest rates, had fewer lender options, or been unable to buy the home they wanted.

Quick Summary

A credit check protects you by revealing what lenders will see and catching issues early, whether you're buying, refinancing, or renewing.
Consumer credit reports often show different scores than lender reports, and some issues don't appear on consumer reports at all.
Common errors include accounts in the wrong name, charges on closed accounts, and old accounts that should have been removed.
As a mortgage broker, I have a special line to Equifax that can resolve disputes in days instead of weeks to months.
The impact of a hard inquiry is minimal and recovers quickly (days to weeks depending on your profile).
Multiple mortgage-related credit checks within 45 days (Equifax) or 2 weeks (TransUnion) count as one inquiry.
Even clients with perfect credit scores have bureau checks listed on their reports.

Next Steps

Whether you're exploring mortgage options or have questions about your credit, don't let concern about a credit check hold you back. The information we gain is worth far more than any temporary, minor impact on your score.

Need help with your mortgage or have questions about your credit? Book a consultation or call 778-988-8409 .

Glossary

Credit Bureau: An organization that collects and maintains credit information about consumers. In Canada, the two primary credit bureaus are Equifax and TransUnion.

Credit Utilization: The percentage of your available credit that you're currently using. For example, if you have a credit card with a $10,000 limit and a balance of $3,000, your utilization is 30%.

Hard Inquiry: A credit check that occurs when you apply for credit (like a mortgage), which appears on your credit report and may have a small, temporary impact on your score.

Lender Report: The credit report that mortgage lenders and brokers access, which may contain different information or scoring than consumer reports.

Soft Inquiry: A credit check that doesn't impact your score, such as when you check your own credit or when companies check your credit for pre-approval offers.

Trade Line: An account listed on your credit report, such as a credit card, line of credit, car loan, or mortgage.

Renovate The Home You Are Buying!

tim@lyonmtg.com (Tim Lyon) — Thu, 08 Feb 2024 12:00:00 GMT

The best place to start the mortgage process is with a pre-approval. But once you’ve been pre-approved for a mortgage and you’ve been shopping with location in mind, what happens when you can’t find a suitable property?

There's no doubt about it; finding the perfect property within your price range is a difficult task, especially for first-time homebuyers. So, before buyer’s fatigue sets in, maybe you should consider adding the cost of renovations into your purchase.

Buying a property and including the cost of renovations into the mortgage is available through a program called purchase plus improvements. When purchasing a home, you can add the cost of home upgrades into your mortgage, making it a great option if you can’t find something move-in ready and aren’t afraid to do a little work!

But while this sounds simple enough, in all honestly, it’s quite the process. There are some pretty strict rules to follow, but nothing that you can’t handle with the guidance of an independent mortgage professional.

Here’s a quick overview of the process. Firstly, you must provide quotes to the lender ahead of time for the work you would like to complete. It’s good to note that the renovations will have to increase the value of the property accordingly. From there, the lender doesn’t give you the money to do the upgrades; you have to come up with that yourself. However, once the work has been completed and verified by an appraiser, the lender will reimburse you and include the money in your mortgage.

This program isn’t for everyone. Buying a home is a stressful endeavour in and of itself. The added stress of having to undertake renovations right away might not be a good idea. But then again, if you have the financial wherewithal to handle the cost of renovations and like the idea of making it yours from the start, then this might be just the option you’ve been looking for!

Please connect directly; it would be a pleasure to walk through the exact process and outline what securing a purchase plus improvements would look like for you!

4 Signs You’re Ready for Homeownership

Thu, 01 Feb 2024 08:15:00 GMT

Buying your first home is a big deal. And while you may feel like you’re ready to take that step, here are 4 things that will prove it out.

1. You have at least 5% available for a downpayment.

To buy your first home, you need to come up with at least 5% for a downpayment. From there, you’ll be expected to have roughly 1.5% of the purchase price set aside for closing costs.

2. You have established credit.

3. You have the income to make your mortgage payments. And then some.

A good rule of thumb is to keep the costs of homeownership to under a third of your gross income, leaving you with two-thirds of your income to pay for your life.

4. You’ve discussed mortgage financing with a professional.

Please connect anytime; it would be a pleasure to work with you!

Finance Your Home Renovations

Thu, 25 Jan 2024 08:15:00 GMT

Existing Home Owners - Mortgage Refinance

Probably the most straightforward solution, if you’re an existing homeowner, would be to access home equity through a mortgage refinance.

As your financial situation is unique, it never hurts to have the conversation, run the numbers, and look at your options. Let’s talk!

If you're not in a huge rush, it might be worth waiting until your existing term is up for renewal. This is a great time to refinance as you won’t incur a penalty to break your existing mortgage.

Now, regardless of when you refinance, mid-term or at renewal, you’re able to access up to 80% of the appraised value of your home, assuming you qualify for the increased mortgage amount.

Home Equity Line of Credit

Instead of talking with a bank about an unsecured line of credit, if you have significant home equity, a home equity line of credit (HELOC) could be a better option for you.

An unsecured line of credit usually comes with a pretty high rate. In contrast, a HELOC uses your home as collateral, allowing the lender to give you considerably more favourable terms.

There are several different ways to use a HELOC, so if you’d like to talk more about what this could look like for you, connect anytime!

Buying a Property - Purchase Plus Improvements

So if you’d like to discuss using your mortgage to cover the cost of renovating your home, please connect anytime!

Mortgage Advice to Help You Through a Separation

Thu, 11 Jan 2024 08:15:00 GMT

Keep making your payments.

There is always a financial cost to break your mortgage.

When working through how to split your finances, you decided to either refinance your mortgage, remove someone from the title, or sell the property, keep in mind that you will incur legal costs.

Listing your marital status as separated or divorced.

It could be harder to qualify for a new mortgage.

Purchasing the matrimonial home from your ex.

What is a Second Mortgage?

Thu, 04 Jan 2024 08:15:00 GMT

A second mortgage is an additional mortgage on a single property, not the second mortgage you get in your lifetime.

When you secure a second mortgage, you continue making payments on your first mortgage as per your mortgage agreement. You must also then fulfill the terms of the second mortgage.

If you'd like to know more about how a second mortgage works, or if you'd like to discuss anything related to mortgage financing, please connect anytime!

Unsure About the Housing Market? Let's Talk.

Thu, 28 Dec 2023 08:15:01 GMT

Here are some questions to consider. Although they are subjective, they will help bring you clarity. Ask yourself:

Does buying a property now put me in a better financial position?
Do I make enough money now to afford a new home and maintain my lifestyle?
Do I feel confident with my current employment status?
Have I saved enough money for a down payment?
How long do I plan on living in this new home?
Is there any scenario where I might have to sell quickly and potentially lose money?
Does buying a property now move me closer to my life goals?
Do I really want to buy now or am I just feeling a lot of pressure to just buy something?
Am I holding back because I'm scared property prices might drop soon?

There’s no doubt that buying a home can be stressful, but it doesn’t have to be. Having a plan in place is the best course of action to help you make good decisions and alleviate that stress.

If you’d like to have a conversation to discuss your plans, ask some questions, and map out what buying a home looks like for you, we can address many of the unknowns together.

Improving Your Credit Score

Thu, 21 Dec 2023 08:15:00 GMT

Make all your payments on time.

Making your payments on time is so important; in fact, it might just be the most important factor in managing your credit.

Now, just because payments don't report until being 30 days late, don’t get comfortable with making late payments; the best advice is to pay your debts on time, as agreed.

Stop acquiring new credit.

Keep a reasonable balance.

Check your credit report regularly.

Handle collections immediately.

Use your credit card.

There you have it. Regardless of what your credit looks like now, you will continue to increase your credit score if you follow the points outlined above.

How To Establish New Credit

Thu, 14 Dec 2023 08:15:00 GMT

But what happens if you’re looking to secure mortgage financing before you have a fully established credit report?

Although establishing credit takes a minimum of two years, it really begins with putting together a plan. If you’d like to discuss anything credit or mortgage-related, please get in touch!

4 Ways to Access Your Home Equity

Thu, 07 Dec 2023 08:15:02 GMT

Simply put, home equity is the actual market value of your property minus what you owe. For instance, if your home has a market value of $650k and you owe $150k, you have $500k in home equity.

If you want to stay in your home but also access the equity you have built up over the years, there are four options to consider.

Conventional Mortgage Refinance

Assuming you qualify for the mortgage, most lenders will allow you to borrow up to 80% of your property’s value through a conventional refinance.

Even if you paid off your mortgage years ago and own your property with a clear title (no mortgage), you can secure a new mortgage on your property.

Reverse Mortgage

Unlike a conventional mortgage refinance, reverse mortgages won’t allow you to borrow up to 80% of your home equity. Rather, you can access a lesser amount of equity depending on your age.

Home Equity Line of Credit (HELOC)

Second Position Mortgage

If the cost to break your mortgage is really high, but you need access to cash before your existing mortgage renews, consider a second mortgage.

If you’re looking for a way to access the equity in your home to free up some cash, please get in touch. You’ve got options, and we can work together to find the best option for you!

An Overview of the Home Buying Process

Thu, 23 Nov 2023 08:15:00 GMT

Are you credit-worthy?

How will you make your mortgage payments?

How much skin do you have in the game?

How much can you afford?

If you’d like to discuss your financial situation and put together a plan to secure mortgage financing, please get in touch!

GDS/TDS Ratios Explained

Thu, 16 Nov 2023 08:15:00 GMT

One of the major qualifiers lenders look at when considering your application for mortgage financing is your debt service ratios.

“Debt servicing” is the measure of your ability to meet all of your financial obligations. There are two ratios that lenders examine to determine whether you can debt service a mortgage.

Here’s how to calculate your GDS.

Principal + Interest + Taxes + Heat / Gross Annual Income

Here’s how to calculate your TDS.

Principal + Interest + Taxes + Heat + Other Debts / Gross Annual Income

If you don’t have any outstanding debts, your GDS and TDS will be the same number. This is a good thing!

Will Collections Impact Your Mortgage?

Thu, 02 Nov 2023 07:30:00 GMT

Delinquency

If you’re unaware of bad debts

Moral Collections

Here are a few examples.

A disputed phone or utility bill
Unpaid alimony or child support
Unpaid collections for traffic tickets
Unpaid collections for COVID-19 fines

So if you decide to take a moral stand on not paying a collection, please know that you run the risk of having that moral decision impact your ability to secure a mortgage in the future.

If you have any questions about this or anything else mortgage-related, please connect anytime! It would be a pleasure to work with you!

3 Questions To Ask Yourself Before Listing Your Home!

Thu, 26 Oct 2023 07:15:00 GMT

What is my plan to get my property ready for sale?

But as you’re putting together that plan, here are a few discussion points to work through. A little time/money upfront might increase the final sale price.

Declutter and depersonalize
Minor repairs
A fresh coat of interior/exterior paint
New fixtures
Hire a home stager or designer
Exterior maintenance
Professional pictures and/or virtual tour

What are the costs associated with selling?

Real estate commissions (plus tax)
Mortgage discharge fees and penalties
Lawyer’s fees
Utilities and property tax account settlements
Hiring movers and/or storage fees

What is my plan going forward?

If you’re already considering selling your home, it would be fair to guess that you have your reasons. But as you move forward, make sure you have a plan that is free of assumptions.

If you plan to move from your existing property to another property that you will be purchasing, make sure you have worked through mortgage financing ahead of time.

If you’d like to talk through all your options, connect anytime! It would be a pleasure to work with you and provide you with professional, unbiased advice.

What is a “No-Frills” Mortgage?

Thu, 19 Oct 2023 07:15:00 GMT

A no-frills service or product is where non-essential features have been removed from the product or service to keep the price as low as possible.

When securing mortgage financing, your goal should be to pay the least amount of money over the term. Your plan should include having provisions for unexpected life changes.

So if you’re considering a “no-frills” mortgage, here are a few of the drawbacks to think through:

You'll pay a significantly higher penalty if you need to break your mortgage.
You'll have limited pre-payment privileges.
Potential limitations if you want to port your mortgage to a different property.
You might be limited in your ability to refinance your mortgage (without incurring a considerable penalty).

If you have any questions about this, or if you’d like to discuss anything else mortgage-related, please get in touch. Working with you would be a pleasure!

How to Handle Missed Payments

Thu, 12 Oct 2023 07:15:00 GMT

If you’ve missed a payment on your credit card or line of credit and you’re wondering how to handle things and if this will impact your creditworthiness down the road, this article is for you.

Getting up to date as quickly as possible will mitigate the damage to your credit score. The worst thing you can do is bury your head in the sand and ignore the problem, because it won’t go away.

Porting Your Mortgage

Thu, 05 Oct 2023 07:15:00 GMT

You may not qualify for the mortgage

The property you are buying has to be approved

Property values are rarely the same

You still need a downpayment

Porting a mortgage isn’t just a simple case of swapping one property for another while keeping the same mortgage. You’re still required to come up with a downpayment on the new property.

You’ll most likely have to pay a penalty

Timelines rarely work out

And, chances are, when you end up selling your property and find a new property to buy, the closing dates rarely match up perfectly.

Different lenders have different port periods

Or, with a more extended port period, you run the risk of selling your house with the intention of porting the mortgage, only to not be able to find a suitable property to buy.

Understanding a Spousal Buyout Mortgage

Thu, 21 Sep 2023 07:15:00 GMT

If you’re going through or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property and buy out your ex-spouse.

It’s called the spousal buyout program. Here are some of the common questions people have about the program.

Is a finalized separation agreement required?

Yes. To qualify, you’ll need to provide the lender with a copy of the signed separation agreement, which clearly outlines asset allocation.

Can the net proceeds be used for home renovations or pay off loans?

No. The net proceeds can only buy out the other owner’s share of equity and/or pay off joint debt as explicitly agreed upon in the finalized separation agreement.

What is the maximum amount that you can access through the program?

What is the maximum permitted loan to value?

Do all parties have to be on title?

Yes. All parties to the transaction have to be current registered owners on title. Your solicitor will be required to confirm this with a title search.

Do the parties have to be a married or common-law couple?

Is a full appraisal required?

Yes. When considering this type of mortgage, a physical appraisal of the property is required as part of the necessary documents to finalize the transaction.

Lyon MTG Blog

Mortgage Renewal vs. Refinance: Understanding the Key Differences

Understanding Mortgage Basics

What is a Mortgage Renewal?

What is a Mortgage Refinance?

What About Switching Lenders?

Why Timing Matters

Real-World Example

Quick Summary

Mortgage Renewal:

Mortgage Refinance:

Next Steps

Glossary

25 Year vs 30 Year Amortization: A Practical Guide

What is an amortization period?

25 years vs 30 years: the basicS

example: $500,000 mortgage

Approximate results

Summary

How amortization affects how much you qualify for

So which should you choose?

Choose 25 years if:

Choose 30 years if:

My favourite approach: flexibility first, then pay it down

A twist: invest the difference instead

Benefits of the “30 year plus prepayments” strategy

1. Extra cash flow when you need it most

2. Helps with qualifying for future properties

3. You stay in control

When a 25 year amortization still makes sense

summary

Next steps

Glossary

How Rental Income Impacts Your Mortgage Approval (And Why Lender Choice Matters)

What are Debt Service Ratios?

Gross Debt Service (GDS)

Total Debt Service (TDS)

How Lenders Treat Rental Income

Benefits of Understanding Lender Methods

Important Considerations

Real-World Example: Same Clients, Two Very Different Outcomes

Scenario

How Scotiabank viewed it

How Strive viewed it

The result

Quick Summary

Next Steps

Glossary

How to Get Pre-Approved for a Mortgage in BC (2026 Guide) | Lyon MTG

﻿ What Is a Mortgage Pre-Approval?

What Do Lenders Look At?

1. Income

2. Credit

3. Down Payment

The Mortgage Stress Test

Documents You'll Need

How Long Does a Pre-Approval Take?

Pre-Approval vs Pre-Qualification — What's the Difference?

How Long Is a Pre-Approval Valid?

Ready to Get Started?

Mortgage Stress Test Canada 2026: How It Works and What It Means for You

What Is the Mortgage Stress Test?

How Is the Stress Test Rate Calculated in 2026?

Who Does the Stress Test Apply To?

How Much Does the Stress Test Reduce What You Can Borrow?

Can You Qualify for More Despite the Stress Test?

The Bottom Line

First Time Home Buyer Programs in BC: The Complete 2026 Guide

1. First Home Savings Account (FHSA)

2. RRSP Home Buyers' Plan (HBP)

3. BC Property Transfer Tax (PTT) Exemption

4. CMHC Insured Mortgages

5. GST/HST New Housing Rebate

Putting It All Together

Mortgage Renewal vs Refinance: Which One Do You Actually Need?

What Is a Mortgage Renewal?

What Is a Mortgage Refinance?

The Critical Difference: Penalties

When Should You Renew?

When Should You Refinance?

What Is a Mortgage Pre-Approval?