Point of no return

There are still many of us still riding out on a variable rate mortgage, even though there have been 5 rate changes this year and the strong possibility of another one soon. At the time it was the easiest decision out there as rates were low and the fixed rate while still low was about a percent and a half higher than the discounted variable rate.

Now there are a few things that those of us still on a variable rate should be aware of. These are the Trigger Point and the Trigger Rate. Firstly the Trigger Rate is the point that you are no longer paying interest and principal on your mortgage but only paying interest. Meaning that you are no longer paying it down. The Trigger Point is when the balance on your mortgage now exceeds the amount of your original principal due to the increase of mortgage rates.

Hitting the Trigger Rate may not warrant a call from your lender, however hitting the Trigger Point mostly likely will. This is because your mortgage now exceeds the initial principal balance and since you were no longer paying interest & principal your loan was increasing due to the fact that the increasing rates and your set payment no longer covered the new interest on the loan.

Solution now would be to simply increase your payments to bring it back below the trigger point or switch over to a fixed rate so you are paying both interest & principal. Feel free to give me a call if you are in this situation.

Today I am thankful for the schools finely being open again here in Halifax, quick solutions and partners who stepped up to help solve it and invitations from colleges to attend events.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

August inflation numbers

The inflation numbers for August 2022 for both Canada & the United States came out over the past week. In Canada our inflation rate dropped from 7.6% to 7%, and in the US it decreased from 8.5 to 8.3. While both are retreating from the highs of a few months ago, we are still well off the comfort level of 2%.

As a result of the still too high inflation rate, the US Federal Reserve delivered it’s third straight 75 basis point increase to their interest rates yesterday. To many economists this bakes in with pretty much certainty that the Bank of Canada will follow suit with another large rate increase when it meets next on October 26th. The only thing that could change the amount of the rate change would be the CPI (inflation) numbers that will be coming out on the 19th of October.

So while we are improving and prices of goods and gasoline are coming down, according to the central bankers it is just not retreating fast enough. A lot could happen in the next month to determine the size of the next rate change from the central bankers.

Today I am thankful for a warm muggy fall day which was perfect for a run this morning, the idea’s that come from reading great books and opportunities that come from working long hours.

“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.” Sam Ewing

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here


Switching

Over the course of the pandemic when the real estate market was on fire and everything and I mean everything was selling for well above the list price, the majority of people opted to go with the variable rate as opposed to the fixed. You see it was simple math at the time, as fixed rates were about 1% percentage point more expensive.

Well now thanks to soaring inflation and recent moves by the Bank of Canada, that rate disparity has all but disappeared. So if you are getting a bit nervous with your variable rate, then just reach out to your lender and ask to switch to a fixed rate for the remaining term. This is one of the advantage of the variable rate, you switch to a fixed with the same lender with out a penalty. If this will give you more peace of mind, then do it.

Today I am thankful for a quick fix for a credit card issue, a morning call with one of my girls at university and the shorter days of fall which is perfect for sleeping.

“You can only exceed your limits if you’ve discovered them.” Roel van Sleeuwen

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

High Standards

Whether personally or professionally, something that you should never ever do is to compromise your high standards. Not for friends, family, a neighbour, an old school friend or a potentially high commission. Once broken it is a slippery slope and if you do it for one then now you have to do it for everyone.

You have developed and maintained a high level of standards to a reason. You’re a professional and your reputation with your current and future clients is the life blood of your business. This is exactly how I feel and why I felt it was necessary to lose a file than have to make a concession for the standards on how I operate my business.

Today I am thankful for the good friends who have offered to help my daughter with a technical issue, an amazing handy man who came over at very short notice for some projects at our house and Sunday morning bacon for breakfast.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Parity

par·​i·​ty | \ ˈper-ə-tē  , ˈpa-rə- \plural parities

Definition of parity

 : the quality or state of being equal or equivalent

Women have fought for parity with men in the workplace.

This is the topic of the day as we have reached the point where the fixed rates and the variable rates have reached parity. With the many increases to the Bank of Canada overnight lending rate, this has now given us a prime rate of 5.45. With the available discounts to prime of between prime -.55 to prime -.90 this takes us to pretty much parity with the fixed rate.

That being said you will still need to consider the various pro’s and con’s of each product before you make your final decision of where you want to go. Here are a few things to keep in mind.

The benefit of the fixed rate right now is that your payment will not change over the term (1-5 years) of your loan. The potential downside is a higher penalty if you were to break it prior to maturity. As for the variable rate, right now you are starting off pretty much the same as the fixed and it only comes with a 3 month interest penalty if you break it. However the downside is the talk from the Bank of Canada is that they are not done with the rate increases. At the end of the day pick the product that you are most comfortable with after seeing both sides.

Today I am thankful for a long bike ride with my friends this morning, deer on my lawn at 6am to eat the fallen apples and my wife’s eye for home decor deals.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

My promise to you

My promise to you as your mortgage broker is that I will bring more value to you during your transaction than anyone else in the marketplace. I can say this as I have been in this business for 20 years and have assisted clients funding a wide range of transactions. Everything from AAA credit clients, Alternative lending, private mortgages and large commercial multi residential mortgages.

Sure other brokers or lenders may offer you a slightly lower rate ( but not always). However remember what is priceless in this process is getting the seasoned advice rather than someone who is just chasing a commission. The commission is the reward for a job well done, and my primary role is to secure the financing for you that suits your requirements. I work for you, not a large national brokerage house or any of the lenders. I believe in a fiduciary responsibility which means that I work only for your best interest.

If I am not helping you with your mortgage, then you are paying too much and not really being valued.

Today I am thankful for the amazing run I had this morning, the amazing people I get to work with who put their trust in me and the ability to look for solutions where others only see problems.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Mortgage credit insurance

When I get clients approved for their mortgage I send them out a digital signing package with all the documents that must be signed for both the lender and from a compliance standard for our industry. One of the documents that I include at the beginning of every package is the MPP mortgage protection plan, also called credit insurance.

Clients can choose to accept or waive the insurance. The main purpose of it is to protect the borrowers or their estate in the event that something where to happen to them while the mortgage was still in-force. Personally I know how it helped my family back in 2005. My Mom passed away from breast cancer in 2005, while my parents did not have a mortgage at the time then did have a secured line of credit and had the insurance on it as well. I just remember the peace of mind it gave my Dad knowing that he didn’t have to worry about making the payments.

This same peace of mind is what I want for all my clients. Some people have their own coverage with their financial advisor which is great. At the very least make sure that you have something in place so you don’t leave your family scrambling to cover your debts.

Today I am thankful for another beautiful Sunday morning to go for a run, a quite house to read after I got back and my wife for always coming up with new and creative meals for our family.

“Fun is like life insurance; the older you get, the more it costs”. Kin Hubbard

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Canadian Inflation Numbers July 2022

The inflation numbers for July 2022 just came out and they have finally started to come down. The Canadian inflation rate for July was 7.6% which is down from 8.1% in June. So it appears that we are headed in the right direction and coming down from peak inflation. This is similar to what the American’s announced last week.

On the whole consumer prices increased by only .1% the smallest change since Dec 2021. While we are not out of the woods yet as we are still well above the comfort level of 3% inflation. The next report in September will be the best indication that we are truly headed in the right direction once and for all.

The may be the news that the Bank of Canada has been looking for after hiking rates by a full percentage point in July. While there is still a strong possibility that they may still increase the rates in the next meeting in September at least this news should tamper them to only 25 or 50 basis points this time.

Today I am thankful for people who call me out of the blue for credit advice, for the YNAB program existing to help us all manage our money better and repair work getting close to being complete at my house.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Double up

Roughly one year about the fixed mortgage rates for a 5 year AAA client were 2.04%. Now the rates for the same term is 4.59%. While much higher thank last year it has come down in the past few weeks from it’s peak of 5.09% back in June.

Let’s say that you were one of the lucky ones who got a fixed rate mortgage last year with a rate of 2.04%, 25 year amortization and 300K mortgage balance with a payment of 1276.15. Most of the lenders I deal with have excellent pre payment privileges, from putting an extra 15 to 20% of your principal directly on your mortgage once per year or doubling up your payments.

Since not many would have an extra 45-60K just lying around to put directly on your principal but you’re doing well this year and as a result want to take advantage of the double up feature. Everything on and above your prescribed mortgage payment of 1276.15 which is a mix of interest & principal will go directly to paying down the principal. So by doubling up your payments, you will pay off your mortgage 14 years early and have it paid off just over 11 years instead of 25. Just something to think about if you are lucky enough to have a low fixed rate mortgage.

Today I am thankful for a nice 50K bike ride with friends this morning, because of an early start I was back early enough to get some work done and new gears on my bike made it much faster.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here

Peak Inflation

The US inflation numbers came out yesterday and it showed that inflation has started to come back from it’s high of 9.1% in June to 8.5% in July. So this has many of us hoping that we have hit peak inflation. Most of the reduction stems from gas prices coming back from their highs in June. The month over month prices of good and services were flat with a 0% change from June to July and this is after hitting a 17 year high in June.

So while this is positive news, the true indication will be where the numbers go for next month. Will this report be just a fluke or a true indication that inflation has started to reseed from it’s highs. If this is the case will bond yields come back down and bring the fixed rates with it? This has already started as rates are now about 1% off of their June highs but is there still more room for them to come back down. How will all of this effect the central banker stance on the over night interest rates?

So let’s take the good news out of the US with a grain of salt for now and see how the Canadian numbers look when they are announced next week. However the true test may be when the Bank of Canada meets on September 7th to discuss the overnight lending rate, which if you remember the last time they met in July it went up by one full percentage point.

Today I am thankful for the fact that the repair work on my office is almost complete, my girls are getting excited to start their university education next month and that the humidity has left us for the time being.

I look forward to hearing from you in regard to your mortgage needs.

Patrick

p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here