6 Dec

The bond market is now sending a clear signal: Go with a variable-rate mortgage


Posted by: Angela Lavender

Many people started out Wednesday morning expecting three or more rate hikes in the next 18 months.

Now, they’re wondering if we’ll see more than one.

That’s how much rate expectations have changed since the Bank of Canada’s latest rate statement.

If you’re shopping for a mortgage and believe what the bond market is telling us, it implies your odds of success with a fixed rate may have just changed.


The Bank of Canada still maintains that its key bank rate is headed toward its estimated “neutral range,” which means 75 to 175 basis points higher than today’s 1.75 per cent (75 basis points equals three-quarters of a percentage point).

But the bond market, which bakes in virtually all available information, is losing faith in the bank’s words. The market is focused on the facts: economic growth stalled this quarter, Canadians’ savings rate is near all-time lows, the economically critical oil sector is near crisis mode, trade war threats persist, the all-important housing sector is slowing, consumer spending is dropping, business investment is falling, the stock market is diving, and now even the U.S. Federal Reserve is chirping dovish.

That’s why Canada’s five-year bond yield, which guides five-year fixed mortgage rates, has fallen out of bed – dropping all the way down to its one-year midpoint.

All of this is inconsistent with a “rising rates” narrative.


First off, variable rates are going nowhere fast. Now, the market is not expecting the next rate hike until spring. There is almost more risk of lenders reducing variable-rate discounts due to credit, risk or margin concerns than due to Bank of Canada rate hikes. (If any of that happened, it would directly impact new variable-rate borrowers, not existing ones.)

As for five-year fixed rates, banks are doing what banks do: maintaining elevated profit margins for as long as they can. In a typical market, with bond yields down 40 basis points (bps) in less than a month, five-year fixed rates would’ve dropped by now, but they haven’t.

Previous rate hikes and tighter mortgage rules have shrunk the prime mortgage market. Intense competition for this smaller pie has led to skimpier mortgage revenue all year. Now the banks want their profit margins back.

If you want to get technical, consider mortgage “spreads,” the difference between banks’ going rates and the government’s five-year bond yield. Many big lenders have been settling for just 130-140 bps for most of this year. Normally they like to make 150-plus bps.

On top of this, if we really are nearing the end of the economic cycle, as the yield curve suggests, banks will want to price in a little extra margin for market risk and credit risk. And, let’s not forget, banks are facing stricter capital rules and higher deposit rates, which also affect their funding costs.

As we approach the winter doldrums, the slowest time of year for mortgages, banks figure that slashing rates now would barely move the needle on their mortgage market share, so why give up margin for no reason?


After today, more people are going to like their chances with floating rates (variable- and adjustable-rate mortgages). The best variable mortgage rates for well-qualified borrowers are currently:

  • 2.80 per cent or less, if the mortgage is default insured
  • 3.04 per cent if you’re refinancing

A rate near or under 3 per cent gives you at least a three-rate-hike head start over conventional five-year fixed rates. In the weeks to come, expect fewer borrowers to bet on the “over” (four-plus hikes), so variable-rate popularity will rise.

By the way, last quarter saw the highest percentage of insured borrowers going variable since Canada Mortgage and Housing Corp. started regularly publishing such stats. So, it has already started. People are becoming more educated every day about the risk/reward of variables and their other benefits, such as penalties that are drastically lower than those on big bank five-year fixed mortgages.

In short, floating-rate mortgages (which you can get with a fixed payment for peace of mind) are once again the value du jour for financially stable, risk-tolerant borrowers, despite Bank of Canada rate-speak.

Robert McLister is a mortgage planner at intelliMortgage and founder ofRateSpy.com. You can follow him on Twitter at @RateSpy.

9 Oct

Checklist: 10 home maintenance tips for this fall


Posted by: Angela Lavender

Saturday, September 22, 2018, 6:18 AM – While you soak up the remaining sun before fall officially starts, here are 10 fall home-maintenance tip so your place is ready when the temperature finally drops below 20oC for good.

RELATED: How fall affects your mood, and how to cope


When fall’s rains (and winter’s snows) arrive, few things make the season more miserable than a leaky roof.

Experts recommend doing a visual inspection of your roof, either from the ground with binoculars or heading up there with a ladder. Look for bent, cracked or missing shingles and replace them.

If there are a lot of those, and you know your roof is old, consider having it replaced. It may be costly, but so is water damage from leaks.

While you’re up there, DIY Network recommends paying special attention to areas around skylights, chimneys or vents.


When the leaves are done falling, you’ll save a lot of hassle by pulling out the ladder again and clearing out your roof gutters.

Clogged or clear, the water from fall and early winter rains won’t stop coming. Clearing the gutters allows rainwater to drain properly through your downspouts, rather than spilling over the sides and potentially getting into your home’s foundation.

For a less-gunky job, wait for dryer weather to clear out the dried leaves.

And speaking of downspouts, check them for leaks, and make sure they direct water away from the foundation, not to mention pathways and driveways.


At some point, you’ll have to accept that the season for grilling is over.

Take the cool down as a reminder to clean the barbecue’s grills and burners, as well as disconnect the tank and store it somewhere safe.

Don’t forget to guard against moisture by either covering your barbecue up or putting it out of the elements.


You won’t be getting much use out of your backyard, so fall is a good time to remove things that won’t do well when the snows come.

Move or cover backyard furniture that you know won’t react well to the cold and snow.

Your lawnmower doesn’t like those conditions either, so move all outdoor tools inside.


While your home’s warmth may insulate water in pipes from the cold rigors of Canada’s winter, outside faucets have no such protection.

Turn water off to outdoor faucets, and disconnect and store your garden hose as well. Make sure to run the tap after to drain as much of the water out before the cold sets in.


Fall is the best time to do this, not just because of fall rains and winter snows, but with an eye to the spring melt as well.

Walk around and have a look for cracks or gaps. Take a good look at doors, windows, and entry points of wires or cables. Sealing these off will save you headaches later.

Don’t delay too long in doing so, as caulking is best done before it gets too cold.


You’ve prepped the outside of your home against the rigors of the cold, now it’s time to focus on keeping the interior toasty.

Change out the air filter on your furnace (and stock up on spares), and call in an inspector to give the system a once-over, as well as check for signs of carbon monoxide buildup.

Next, check all your heating ducts and vents for dust build-up, and peek inside to see if anything fell into them over the past season. Every bit of extra clearance helps.


Having a warm home isn’t much of a boon if you’re losing heat through poor insulation.

Check your window and door seals for drafts when the weather gets cool enough. Seal any cracks with caulk or weather stripping.


Winter air is dry, and that has its own effects on your home’s infrastructure.

If your home is equipped with a humidifier, it’ll need annual maintenance as well. Clean out the filter, or replace it if it’s too encrusted. Give the equipment as a whole a good cleaning also.


While you’re giving your home its seasonal overhaul, take the time to make sure it’s safe for its inhabitants.

Check your smoke detectors to see if they are in working order (you should have one on each floor), and check your fire extinguisher. If you need to replace it, now’s a good time to do so.

Winter blackouts are a fact of life in Canada, so if you own an emergency generator, test it out (but be sure not to do so in an enclosed area, as fume build up can be hazardous or deadly).


SOURCE: Better Homes and Gardens | DIY Network | Travelers | State Farm | Forbes | Rona | Repair Clinic

Thumbnail image source: Getty Images

28 Sep

Eight Great Renovations You and Your Dog Will Love


Posted by: Angela Lavender

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.

30 Aug

What are your Labour Day plans?


Posted by: Angela Lavender

Mark the holiday with a backyard gathering, stock up on essentials and prepare for a new season

 August 28, 2018
Houzz Contributor. I cover decorating ideas, Houzz tours & the monthly home maintenance…More
Labor Day (Sept. 3) marks the unofficial end of summer. Give the season a proper sendoff with a backyard barbecue and one last scoop of ice cream. Then check off some fall tasks on your to-do list. Seven ideas for savoring one more long, summery weekend are ahead.



23 Aug

How to Choose a Remodeling Contractor


Posted by: Angela Lavender

It takes a little leg work to find the best person for the job.

Man Carrying Ladder

By: Alicia Garceau

When choosing a contractor to head up your remodel, these simple steps can mean the difference between complete confidence and sleepless nights.

Ask for Referrals
Word of mouth-hands down, is the best way to find a qualified professional to tackle the job. Ask relatives, friends and neighbors whom they’ve had good experiences with. And ask what made it a positive experience, how the contractor handled problems and whether he or she would use the same contractor again.
Look at Credentials
With recommendations in hand, do some preliminary research, whether it’s with a phone call or a visit to the contractor’s website. Find out whether he or she holds all the required licenses from state and local municipalities, along with designations from any professional associations such as the National Kitchen & Bath Association, the National Association of the Remodeling Industry and the National Association of Homebuilders. Look for contractors who have invested in course work and passed rigorous tests to earn particular certifications. Be aware, however, that not all certifications are created equal. Do some homework and find out the requirements.
Interview Candidates
Narrow down the list of contenders and set up meetings. Try to keep it to three contractors, because things can get confusing beyond that. How a contractor answers questions is extremely important, but communication goes both ways. Candidates should ask plenty of questions, too.
Check References
Ask to see some of the contractors’ projects. If you approve of them, request references and call contractors’ former customers to check up on them. Ask how the contractors did at executing the projects. Were they on time and on budget? Were the customers pleased with the outcome? Was there anything that could have been done differently?
Remember that when you’re hiring a remodeler, you are buying a service and not a product. Quality of service will determine the quality of the finished project. Here are some things you’ll want to explore and questions you’ll want to ask when interviewing a remodeler.
Business Experience and Management
Does the remodeler:
1: Maintain a permanent mailing address, e-mail address, personal phone number, fax number, cell phone and voicemail?
2: Carry insurance that protects you from liability? Ask for a copy of the remodeler’s insurance certificates to be sure. Also, ask the remodeler how much the project will add to the home’s value and attain additional insurance from your provider.
3: Have an established presence in the community? How long has the company been in business under this name? Does the remodeler maintain solid relationships with contractors such as plumbers and electricians and work with them as a team?
4: Possess a trustworthy reputation among customers and peers? Is there a track record of success?
5: Have any professional designations, such as Certified Graduate Remodeler (CGR), Certified Bath Designer (CBD), etc.? How long has the remodeler been a member or any trade organizations?
Get It in Writing
After selecting a contractor, take a look at the documents he or she has prepared. Do they look professional? Scrutinize the contract. Does it seem fair and balanced? And make sure the legal agreement includes the following:

  • a bid price and payment schedule
  • specifics about the scope of work
  • the site plan
  • a sequential schedule of primary construction tasks
  • a change-order clause
  • a written procedural list for close-out
  • an express limited warranty
  • a clause about dispute resolution
  • a waiver of lien, which would prevent subcontractors and suppliers from putting a lien on a house should their invoices go unpaid by the contractor
If everything checks out, you can sign on the dotted line with confidence.