28 Sep

Eight Great Renovations You and Your Dog Will Love


Posted by: Angela Lavender

25 Sep

Benefits of Homeownership Reaffirmed in New Study

Latest News

Posted by: Angela Lavender

Despite deteriorating housing affordability across the country, buying a home is still the more affordable option when compared to renting.

A new report from Mortgage Professionals Canada has determined that, despite the rapid rise in home prices, those who are able to invest in a home would end up “significantly better off” in the long term compared to renting.

The report, authored by the mortgage broker association’s chief economist Will Dunning, found that while upfront monthly costs are in fact cheaper in most locations, the “net” cost of ownership is less than the equivalent cost of renting in a majority of cases, and becomes even more cost effective over time.

“The costs of owning and renting continue to rise across Canada,” Dunning noted. “However, rents continue to rise over time whereas the largest cost of homeownership–the mortgage payment–typically maintains a fixed amount over a set period of time – usually for the first five years. The result is that the cost of renting will increase more rapidly than the cost of homeownership.”

Additionally, the costs of ownership include considerable amounts of repayment of the mortgage principal. “When this saving is considered, the ‘net’ or ‘effective’ cost of homeownership is correspondingly reduced,” Dunning added.

On average, the monthly cost of owning exceeds the cost of renting by $541 per month. But when principal repayment is considered, the net cost of owning falls to $449 less than renting.

Interest Rate Scenarios

The analysis compared the cost of renting vs. owning both five and 10 years into the future, with higher interest rates factored into the equation. In all cases, owning comes out ahead:

Scenario #1: If interest rates remain the same (using an average of 3.25%), after 10 years the average net cost of owning is $1,014 less than the monthly cost of renting.

Scenario #2: If interest rates rise to 4.25% after five years, the average net cost of owning falls to $1,295 less than the monthly cost of renting.

Scenario #3: If interest rates rise to 5.25% after five years, the average net cost of owning is still $726 less than the monthly cost of renting.

“By the time the mortgage is fully repaid in 25 years (or less) the cost of owning will be vastly lower than the cost of renting,” the report adds, noting that the cost of owning, on average, would be $1,549 per month vs. $4,655 for an equivalent dwelling.

Canada Still a Country of Homeowners

Despite rising home prices and deteriorating affordability, Canada remains a nation of aspiring homeowners.

The study pointed to the continued strong resale activity as one indicator of this.

Resale activity in 2017 was still the third-highest year on record, at 516,500 sales, just off the peak of 541,2220 sales in 2016.

But other polls have also found a strong desire among younger generations that still dream of owning.

RBC’s Homeownership Poll found a seven-percentage-point increase in the percentage of overall Canadians who planned to buy a home within the next two years (32%), and a full 50% of millennials.

Similarly, a RE/MAX poll found more than half of “Generation Z” (those aged 18-24) also hope to own a home within the next few years.

Perhaps the biggest question is whether those aspiring homeowners will have the means to surpass the barriers to homeownership, namely larger down payments and the government’s new stress test.

“While recent changes to mortgage qualifying have made the barrier to entry higher, those who can qualify will be much better off in the long term,” Paul Taylor, President and CEO of Mortgage Professionals Canada said in a statement. “Given the economic advantages of homeownership, Mortgage Professionals Canada would recommend the government consider ways to enable more middle-class Canadians to achieve homeownership.”

Despite its affordability benefit over renting, Dunning addresses some of the impediments of homeownership, namely the longer timeframe needed to save for the down payment. Despite higher home prices and larger down payments required, first-time buyers still made an average 20% down payment.

Additional Tidbits from the Report

Some additional data included in Dunning’s report include:

  • Average house price rose 6.2% per year from $154,563 in 1997 to $510,090 in 2017
  • Average weekly wage growth was up just 2.6% per year from 1997 to 2017
  • The average minimum interest rate for the stress test during the study period: 5.26%
  • The average annual rates of increase for the following housing costs:
    • Property taxes: 2.8%
    • Repairs: 1.9%
    • Home insurance: 5.4%
    • Utilities: 1.6%
    • Rents: 2.4%
21 Sep

Could You Be a Landlord?


Posted by: Angela Lavender

Sure, the extra income would be great. But jumping blindly into owning a rental property could be disastrous. Here’s what you need to know

 April 22, 2013

With real estate prices and interest rates still low, this could be a good time to buy a rental property. Being a landlord is not only for people who can afford to own large apartment complexes. Moving into a duplex or a property with several small cottages can be a smart way to house yourself and save for the future.

If (and it’s a big if) you are able to find a property where your overall mortgage payment is within reach even without the income from renters, you can plan on stashing away that rental income — potentially saving a good deal more each year than you otherwise would be able to. Of course, property managing is not without its hassles, and it’s not for everyone. If you are curious about what it takes to be a successful landlord, this ideabook is for you.

18 Sep

Home sales should start to rise in the fall: BC Real Estate Association


Posted by: Angela Lavender

Housing activists say as many as 3,000 units of affordable rental are being lost to make way for new towers in the Metrotown area.

Housing activists say as many as 3,000 units of affordable rental are being lost to make way for new towers in the Metrotown area.

Simon Little / Global News

 A A 

Housing sales across the province continued to cool in the month of August, according to the latest numbers from the British Columbia Real Estate Association.

READ MORE: Metro Vancouver’s home price-income gap is as high as $85K — and that’s for a townhouse

Those numbers indicate sales were down 26 per cent compared to the same month a year ago, and the average residential price of just under $670,000 was down 1.2 per cent from a year ago.

However, the association’s chief economist, Cameron Muir, says the numbers also indicate the downturn in housing demand induced by the tightening of the federal government’s mortgage stress-test rules is now largely behind us.

READ MORE: Housing market calmer in August: Real Estate Board of Greater Vancouver

He says the B.C. housing market is evolving along the same path blazed by Ontario and Alberta, where the initial shock of the mortgage stress-test is already dissipating and home sales are increasing.

Home sales should start to rise in the fall: BC Real Estate Association

12 Sep

Keeping Your Credit Score Healthy


Posted by: Angela Lavender

12 SEP 2018

There is a lot of misinformation floating around about credit bureaus, credit reports and credit scores – not only that, but a large amount of the clients I work with have never even seen their credit report or score before!

I’d like to shed a bit of light, as they say, on the importance of your credit score and what does (and does not) affect this ever-changing number.

Keeping Your Credit Score Healthy
There are a few ways that you can actively ensure that your credit score is kept at a nice high number:

  • Pay your credit cards and other debts on time – this includes bills like your cell phone!
  • Pay your parking tickets on time – many people don’t realize that unpaid tickets will affect your credit score.
  • When meeting with your mortgage broker, go over your credit report line by line (a service I offer to every one of my clients). They will be able to help you catch any unsubstantiated credit checks, fraudulent activity, and any mistakes by your lenders – and have them removed from your report.
  • Have a couple of credit cards or a line of credit on your report…but! Ensure they have reasonable credit limits for each card, and that are not using your limits to their max. *The unofficial rule is only use about 30% of your available credit.
  • Don’t apply for credit too often.

My Score Falls Every Time It’s Checked
Not necessarily true. You can personally check your credit report as many times as you like, and your score will not change. What DOES affect your score is a lender or creditor looking into your credit report. The more times lenders check (especially in a short period of time), the greater chance your score is going to decrease. Research has shown that people who are actively seeking credit tend to be people who are at a greater risk of possibly not repaying their credit, or seeking credit beyond their repayment capabilities. Lenders who see a lot of credit report checks also view this as a potential risk of fraudulent behaviour, and will move (by not extending credit) to protect themselves against it.

Decreasing your credit score also functions as a protective mechanism for YOU if someone is trying to fraudulently use your identity to gain credit (for themselves) on your behalf.

The gist here is that you can apply to have your credit checked a few times a year by lenders, and expect to have little to no affect on your score.

Buying a Home? Use a Broker!
Of course, when you are in the process of applying for a mortgage, some people go to more than one bank; all of which will look into your credit report, all within a short amount of time.

One of the great benefits of using a Dominion Lending Centres mortgage broker is that your mortgage broker will only check your credit once. One check will negate many lenders checking your bureau because your broker knows which lenders will be the best for your personal situation and we can discuss your different mortgage options without needing to have multiple lenders look into your credit!

Eitan Pinsky


Dominion Lending Centres – Accredited Mortgage Professional
Eitan is part of DLC Origin Mortgages based in Vancouver, BC.

5 Sep

Bank of Canada holds key interest rate steady at 1.5%

Latest News

Posted by: Angela Lavender


Investors expect a rate hike next month

Bank of Canada governor Stephen Poloz has opted to keep the bank’s benchmark interest rate right where it is. (Sean Kilpatrick/Canadian Press)

The Bank of Canada is keeping its benchmark interest rate steady at 1.5 per cent.

The central bank’s rate, known as the target for the overnight rate, affects the percentage borrowers and savers get from retail banks on mortgages, savings accounts and other financial services.

All things being equal, the central bank raises its rate when it wants to cool down an overheated economym but cuts it when it wants to coax people to borrow money to spend and invest in a sluggish economy.

In a statement announcing the rate decision, the bank said trade uncertainty stemming from NAFTA negotiations continues to weigh on the outlook, but the economy overall is performing about as expected.

“Business investment and exports have been growing solidly for several quarters,” the bank said. “Meanwhile, activity in the housing market is beginning to stabilize as households adjust to higher interest rates and changes in housing policies.”

While it opted to stand on the sidelines for now, the bank gave every indication it does plan to keep ratcheting its rate higher in the near future.

“Recent data reinforce Governing Council’s assessment that higher interest rates will be warranted to achieve the inflation target,” the bank said.

Toronto-Dominion Bank economist Brian DePratto interpreted the bank’s comments as suggesting a “gradual approach” when it comes to hiking rates.

The last time the bank included the phrase “higher rates will be warranted,” DePratto notes, was in May, when it ended up hiking its benchmark rate at its next meeting.

“Barring a major shock, an October hike looks like a pretty safe bet,” DePratto said.

Investors certainly seem to expect that. Trading in investments known as overnight index swaps currently imply there’s about an 85 per cent change of a rate hike at the end of October — the next regularly scheduled for the bank to meet and decide on its monetary policy.