Allison Swanson - Mortgage Broker

They're calling it a JUMBO drop! The Bank of Canada just made a significant move, cutting its overnight rate by 0.5% this morning, bringing it down to 3.75% and lowering the prime rate to 5.95%.

Why? This decision comes as a response to the challenges facing our economy and a surprising dip in inflation, which fell to 1.6% in September, which was well below the Bank’s target of 2%. It’s the first time inflation has dropped below that target since the pandemic began, signalling that price pressures are easing, especially in everyday essentials like food and energy.

For those with variable-rate mortgages and HELOCs, this cut means lower monthly payments!

For every $100,000 you have borrowed on your mortgage, you can expect a $24-28/month reduction on your payment. For instance, a $500,000 mortgage will drop by $130/month.

Looking ahead, many experts believe we could see more rate cuts coming, with expectations of another 50-basis-point drop in December, possibly lowering the prime rate to 4.45% by the end of the year!

If you need me, I'll be celebrating on behalf of all variable rate mortgage holders 😆

The Bank of Canada dropped another 0.25% this morning, so pour me up another cup of coffee!

This will have the prime rate drop to 6.45% bringing more ease to variable mortgage rate holders and anyone carrying a balance on their HELOC. This move reflects ongoing efforts to support the economy as inflation eases to a 40-month low of 2.5%, edging closer to the BoC’s target.

This latest cut aims to give the Canadian economy a bit more breathing room, especially with recent signs of cooling, particularly in the labor market. With more rate cuts potentially on the horizon—experts hint at a drop to 3.75% by year-end—the doors may open for more affordable mortgage options and increased spending.

As we look forward to potentially lower rates, this trend could spell great news for both the real estate market and personal finances. Lower borrowing costs mean more affordable mortgage payments and the possibility for many to either enter the housing market or reduce existing financial strains.

While we still have a long road ahead of us back to relative normalcy, this is the kind of good news we need to kick off this first week of the season!

If you’re buying a newly built home and have less than 20% for your down payment (and getting an insured mortgage), you could be eligible for a 25% refund of the default insurance premium if that home meets current Energy Efficient certifications.

On an $800,000 purchase price with a minimum down payment, that could mean $7,450 in your back pocket!

In BC, almost all new builds are required to be built to the BC Energy Step Code which would make all buyers of new homes eligible for this rebate!

Every new build has a 5 year window for insured purchasers to use the energy efficient certification for the refund. So if someone is buying a unit built in 2022 that has this certification, they are eligible for the refund if they buy today! You also have a 2 year window to apply for this rebate after you purchase the home!

This program isn’t just for first time home buyers, either! Anyone who is purchasing a new build that is energy efficient and is getting an insured mortgage is eligible!

How do you apply for the refund? Easy. You simply apply to the insurer who has insured your mortgage (CMHC, Sagen or Canada Guaranty).

Are you leaving cash on the table? Give me a call and let's uncover if you're entitled to a refund!

First time home buyers rejoice! Effective today, August 1, 30 year amortizations are available for those purchasing newly built homes with less than 20% down. The government has rolled out this program to help alleviate the pressures of affordability across the country.

So why exactly are we so excited?

This means we can now qualify FTHBs with an insured mortgage (less than 20% down payment) on a 30 year amortization! Previously, we had to qualify the buyers using 25 years. So with the bump in amortization, this will increase the buyer's borrowing power allowing them to qualify for more than before. As a quick reminder, the amortization is the total length of your mortgage loan.

With a 30 year amortization, we can expect the monthly mortgage payment obligations to also be reduced, providing less financial pressure on the buyers. This is our favourite perk of the new program - more financial flexibility!

Do you qualify?

You do if:
-You’ve never purchased a home before OR
-In the last 4 years you haven’t occupied a home as a principal residence that either you or your spouse or common-law partner owns OR
-You’ve recently experienced a breakdown of a marriage or common-law partnership

Do we love this? Or do we love this?!

RATE DROP!

The Bank of Canada has stayed true to their word and continued on the path of reducing rates. With another 0.25% decrease in the overnight rate, variable rate holders are guaranteed to be thrilled!

We are fully expecting another 0.25% reduction by the end of this year. But will it be at the next rate announcement on September 4? Time will tell - stay tuned!

The Bank of Canada made its move today, lowering the overnight rate to 4.75%. This anticipated cut marks the first in a series expected throughout the year, a sign of easing after a sustained period of high rates. So, what does this mean for homeowners and those eyeing the market?

This cut comes as inflation rates stabilize within the central bank’s target, signalling a more accommodating monetary policy could be on the horizon. For homeowners, this could mean slightly lower monthly payments on variable-rate mortgages and lines of credit. Prospective buyers might find this environment more favourable, especially if further cuts materialize as predicted.

Though a single cut may not drastically change the landscape, it sets a hopeful tone for the rest of the year. As we’ve seen, the real estate market reacts sensitively to these changes, so this could be a cue for anyone considering buying or selling to reevaluate their plans with an eye on potentially lower rates ahead.

Remember, while the rate cut is a positive sign, moving forward with financial decisions should always involve careful consideration of your personal financial situation and future rate movements. So let’s chat!

The Bank of Canada made its move today, lowering the overnight rate to 4.75%. This anticipated cut marks the first in a series expected throughout the year, a sign of easing after a sustained period of high rates. So, what does this mean for homeowners and those eyeing the market?

This cut comes as inflation rates stabilize within the central bank’s target, signalling a more accommodating monetary policy could be on the horizon. For homeowners, this could mean slightly lower monthly payments on variable-rate mortgages and lines of credit. Prospective buyers might find this environment more favourable, especially if further cuts materialize as predicted.

Though a single cut may not drastically change the landscape, it sets a hopeful tone for the rest of the year. As we’ve seen, the real estate market reacts sensitively to these changes, so this could be a cue for anyone considering buying or selling to reevaluate their plans with an eye on potentially lower rates ahead.

Remember, while the rate cut is a positive sign, moving forward with financial decisions should always involve careful consideration of your personal financial situation and future rate movements. So let’s chat!

The Bank of Canada announced this morning that it will hold the overnight rate steady at 5% for a sixth consecutive time – shocker! The decision to maintain the status quo comes amid mixed economic data and a need for further evidence of cooling inflation before considering rate cuts.

Governor Tiff Macklem and his friends pointed to the unemployment rate rising to 6.1% in March and a decline in job openings. At the same time, inflation has also continued to improve, trending closer to the Bank’s 2% target in February, and this is the sort of good news we’re looking for.

Considering all this, economists agree that the Bank of Canada is likely to shift towards rate cuts around mid-year, with many predicting the first 25 basis-point cut in June.

For buyers looking to enter the market this spring, this holding pattern offers a window of opportunity before potential rate cuts reignite competition. As borrowing costs remain stable for now, it’s a great time to assess your financial readiness and explore your options.

If you’re considering a home purchase in the near future, let’s connect to discuss how the current interest rate environment aligns with your goals and how we can strategize to make your homeownership dreams a reality!

The next rate announcement is scheduled for June 5th. Hopes are quite high that we'll see our first rate drop! Stay tuned!

The new legislation in BC banning short-term rentals is stirring up a lot of emotions for those who purchased properties that were previously zoned and approved for short-term rentals like AirBnBs or VRBOs.

The government’s aim with this change is to return more units to the long-term rental market to provide more rental housing for our booming population. Without question, we know more housing is needed.

But how is this change affecting those that paid a premium for previously approved short-term rental condos? When it comes down to it, the owners will either put the unit on the long-term rental market or they’ll opt to sell.

So how financially painful could this ban be for someone who has a short-term rental? Let’s assess.

Home prices are still falling across the country while interest rates are still at their relative peak. Although the economic climate makes most of us uneasy, there’s a very real upside to consider for anyone who is in the market to upsize their home.

Even with interest rates as high as they are, moving up in the market could be a smart and strategic move for any homeowner.

Here’s why >>>

Before you take the plunge, consider these VERY common misconceptions that first-time buyers often encounter. Avoid the pitfalls and make informed decisions on your homeownership journey. Stay informed, ya'll!

(Do we still say ya'll tho...?)

Andddd remember, I'm here to guide you every step of the way!

While the monthly costs of buying versus renting might appear comparable at first glance, the decision between the two is far from identical. Purchasing a home offers a slew of advantages that renting simply cannot match.

Ultimately, the decision between buying and renting hinges on individual circumstances, financial goals, and lifestyle preferences. That is - it's a very personal choice!

While homeownership may hold allure for some, renting remains a viable and practical option for others. It's not about which is inherently better; rather, it's about choosing the path that aligns best with your unique needs and aspirations.

Connect with me to see what's the right option for you!

Another day. Another rate announcement...

With no change to the overnight rate, we're still sitting at record highs with a prime rate of 7.2%.

But for how much longer?

The general expectation is that the Bank of Canada will be dropping their rate at the next announcement in June. If the economic data continues on the same trajectory, the likelihood of a rate drop is high. (Not me screaming on the inside in anticipation...and joy).

Stay tuned for updates and here's hoping I'll have some fab news to deliver on the BoC in June!

We’ve been waiting at the edge of our seats for a change that is going to save many first time home buyers thousands of dollars!

You certainly don’t want to miss this!

Finally - an inflation report that we can feel good about! And most notably - shelter costs (mortgage interest and rental rates) are the greatest contributors to this current inflation rate!

January brought some encouraging signs as headline growth slowed to 2.9%. We saw relief at the gas pump and a bit of moderation in grocery costs, which is a welcome change. However, the relentless climb in mortgage interest costs continues, up 27.4% year-over-year, keeping the pressure on households.

While this is good news, it doesn’t mean immediate changes in mortgage rates. The Bank of Canada is looking for core inflation to stay consistently below 3% before making any big moves. But today’s data is definitely a step in the right direction with the consensus of rate reductions in June.

If you have questions about what today’s news could mean for your mortgage and your money, let’s chat!

Just as predicted, the Bank of Canada announced this morning they’ll be keeping the overnight rate steady at 5% for now – four pauses and counting since last July’s final hike upward. And, as expected, reactions are a healthy balance of both optimism and urging patience as we wait and see how the aggressive rate hike cycle pans out against inflation in the coming months.

It’s important, as always, to remember that intense inflationary pressure all last year is what pushed the Bank to keep aggressively raising rates in an attempt to bring inflation back to their 2% target. And while slower than anyone probably hoped for, it does seem to be working – the pace of consumer price acceleration is coming down and suggests existing measures are taking hold.

But headline inflation still exceeds 3% annually. And worrying factors such as wage growth and core inflation upticks in December reveal lingering stickier spots. So, our friends in Ottawa are rightly wary about cutting too hastily and risking a re-acceleration after all the hard tightening work over 2023.

Experts are continuing to emphasize the need for gradual moderation – not intense back-and-forth swings – when nursing economic conditions back to health. Keeping rates firm at 5% will likely continue until the deceleration trend gets confirmed over the next quarter or two. Most economists and market watchers predict that we could start seeing potential cuts around this fall or maybe even as early as the spring.

The main takeaway today is don’t expect instant gratification (as if we could expect that anyway), but do take heart that inch-by-inch progress continues towards more normal conditions. Holding the line now might be frustrating, but will help prevent worse whiplash later. We’re heading cautiously in the right direction, and it’s okay to keep your eyes on the prize – it’s coming!

After 10 prime rate increases, variable rate holders have been absolutely pummelled. If you’re not one of them, you’ve probably heard your friends or colleagues dramatically complaining about their pain and suffering.

With that, this next sentence might shock you. Variable rates are getting looked at in a favourable light again!

While that may be difficult to wrap your head around, considering the bashing these mortgage rates have seen in recent times, we know that the real estate world is cyclical. Ups and downs. Good and bad. Fast and slow. Considering that we may be at the peak of the rate increase cycle, the next logical move is a decrease based on history.

So if you’re having to choose between an adjustable variable rate today and fixed term rates, who is going to be further ahead in 3 years?

Let’s look at the math! But keep in mind that these are strictly projections and estimates based on what *could* happen.

Want to run some scenarios with your own mortgage? I'm here for that!

Well, the final inflation reading of 2023 just emerged with a plot twist - sticking steady at 3.1% despite predictions that we would see a further downward slide. But while progress paused, the year-long cooling remains intact; it’s just taking a little longer than economists envisioned.

Digging deeper into the report, we find pockets of sticky inflation with food and shelter costs still running hot (tell us something we don’t know, right?), explaining everyday budget strains. But core measures within the Bank of Canada’s comfort zones reinforce that the worst of it has passed without catastrophe.

So, where does this leave us looking ahead into the new year? Experts mostly uphold existing outlooks - a continued glide downward nearing the BoC’s 2% target around mid-2024 as the shakier economy absorbs the lingering impacts of aggressive hikes. But the market’s bets on upcoming rate cuts calmed a bit with today’s hold, signalling that we still have some waiting to do.

All eyes are now locked on January’s inflation figures, shaping the next policy steps. Of course, while we are seeing positive progress here at home, we have to remember that global headwinds are liable to whip up unpredictable turmoil. So, we can expect the BoC to hold strong for at least another few months to practice prudent policy. Decreasing the overnight rate too soon could leave us liable to external forces and undo all the hard work that has gotten us this far, but it is coming!

For now, this “no news” isn’t the best news, but it isn’t bad news either. At least we know we don’t have to stress about any more reports or rate announcements until next year, right?