Fingers Crossed that Rates Will Continue to Hold

General Trevor Bumstead 19 Oct

With the Bank of Canada meeting next week to discuss interest rates, I wanted to provide some insights as this continues to be a hot topic.
• September’s inflation report exceeded expectations, signaling the end of a three-month upward trend.
• Headline and core inflation rates dropped year-over-year, indicating a potential peak in the 5% Bank of Canada policy rate.
• While rate cuts aren’t expected until mid-next year, the worst of the tightening cycle may be over and we’re optimistic that there will be no rate increase next week.
Long Version:
September’s inflation report exceeded expectations, marking the end of a three-month upward trend. Both headline and core inflation rates dropped year-over-year and on a three-month average basis. Coupled with a weak Business Outlook Survey, this suggests the 5% policy rate may be the peak. Rate cuts aren’t expected until mid-next year, but the worst of the tightening cycle may be over.
Gasoline prices spiked 7.5% in September due to a base-year effect, offsetting the overall CPI deceleration. Excluding gasoline, CPI rose 3.7% in September. Looking ahead, the October CPI is expected to benefit from a favorable base effect, potentially reaching the low-3% range.
Monthly, CPI decreased 0.1% in September, mainly due to lower gasoline prices. Goods inflation fell 0.3%, a first since December 2022, while services inflation held steady on a monthly basis but slowed to 3.9% year-over-year.
Consumer perception of inflation remains higher than actual figures, partly due to prominent grocery and gasoline prices. Food inflation decelerated to 5.9%, while CPI excluding food and energy hit a cycle-low of 2.8%.
Durable goods prices rose at a slower pace in September, driven by reduced costs for new passenger vehicles, furniture, and household appliances. Air transportation costs dropped significantly.
Core inflation measures followed by the Bank of Canada also showed deceleration. Although underlying price pressures remain above the 2% target, a slowing global economy may bring inflation closer to the target range next year. The central bank will proceed cautiously, postponing rate cuts until mid-next year, as the full impact of rate hikes is yet to be realized.

How to combat rising interest rates

General Trevor Bumstead 14 Jul

As the Bank of Canada continues their assault on variable interest rate products such as mortgages, credit cards, and lines-of-credit, I’m often asked what can be done to combat rising costs. Usually people are focused on their mortgage payment as it is most often the largest single payment, but in most cases, they are neglecting to consider other more expensive and impactful factors influencing their overall financial health.
What I always remind them of, is that even though mortgage rates are on the rise, mortgages remain one of the lowest costs of borrowing money around. Credit cards are north of 20%, lines-of-credit are prime + 0.50% (or more), and even financing for a car is approaching 10% on some vehicles. If you have any other form of debt or a large upcoming expense, there may be value in refinancing to consolidate debt or pullout equity at a lower interest rate to free up cash. This action can have a dramatic impact on your cash flow position and ease the pressures being felt by rising mortgage payments.
Rising rates will not be here for ever so looking for ways to weather the storm can make a big difference as get through this phase together.
If you have any questions or would like to discuss options to improve your monthly cash flow position, please don’t hesitate to give me a call or shoot me a message – I’m here to help.

Helping the Self-Employed during Tax Time

General Trevor Bumstead 16 May

With the deadline for self-employed tax filing less than a month away, let’s take a moment to discuss how I can help you leverage the equity in your home to save money.

  1. Pay the CRA for any taxes owed to avoid costly penalties and fees.
  2. Repayment of the Canada Emergency Business Account (CEBA) loan to take advantage of the $20K in partial loan forgiveness being offered by the Canadian government. (forgiveness = free money)
  3. Improve cash flow through debt consolidation while freeing up funds for future investment and growth opportunities.
  4. Protect your investment portfolio by avoiding the costly tax implications of “cashing out”.

At first glance you may be opposed to changing your mortgage as you think you are saving money but you may be surprised. Let me run the numbers showing you how I can save you thousands of dollars compared to the lost value and cost of cashing out investments, or compared to the other high interest products you are using.

I’m here to help, so please don’t hesitate to give me a call for a no-obligation review or to answer your questions.

Be well and talk again soon.


Choosing a Payment Frequency

General Trevor Bumstead 11 May

When it comes time to select the frequency of your mortgage payment there are several factors to consider which will determine what option is right for you. When making that decision, here are a few things to remember.

  1. Select a payment frequency that best aligns to your household budget and lifestyle.
    • If you’re used to paying monthly (ex: rent) then a monthly schedule could be best for you.
    • If you are paid bi-weekly, matching your mortgage payment may help with budgeting and cash flow.
  2. Monthly, Semi-Monthly, Bi-Weekly, and Weekly all pay the mortgage down at the same rate. Despite what you may have heard, there is no interest advantage compared to each another.
  3. If your intention is to pay your mortgage off faster, there are two options.
    • Utilize the lender’s Prepayment Program while keeping your monthly payments low; Frequent or lump some payments are applied directly to the principle.
    • Increase your regular payment’s using accelerated bi-weekly or accelerated weekly options; Payments are increased to a higher locked in amount where you are making an additional 1 months worth of payments over the course of the year, evenly spread throughout the year.

In the end, it all comes down to personal preference and how you manage your household budgeting. There is no wrong choice.

If you have questions about mortgages or would like to discuss payment options in more detail, please don’t hesitate to reach out for a no-obligation review. I’m here to help.

Be well and talk again soon.


Why You Should Consider Mortgage Insurance

General Trevor Bumstead 21 Apr

Prior to becoming a licensed mortgage agent, I was in the same camp as most in asking, “Why do I need additional mortgage coverage?” Not only did I have great coverage through work, but my wife and I had also purchased a term insurance plan as secondary coverage when we got married. We were covered, right? Well guess what…live happens.

Here we are…10-Years later…2 kids…4 moves…job relocations and career changes…finally our dream house…and now, a global pandemic. Exactly how we
planned it out over a decade ago, right. Ok, so not quite.

Job changes triggered coverage gaps and our expanded family (and mortgage) meant we no longer had sufficient insurance.

As a member of your financial team, I have a responsibility to ensure that your largest single asset is protected for the future. Although you may have coverage through your workplace or privately, the above is a personal example of how mortgage protection can help fill the gaps to help protect you and your family in case the unexpected happens.

What are the two types of Mortgage Insurance?

  • Life Insurance – Pays off the mortgage if one of the mortgage holder passes
    • Most work insurance plans cover less than 2x salary
    • Work insurance acts as short-term Income Replacement vs. Mortgage Insurance which is long-term Debt Elimination
    • Immediate coverage is available
    • Mortgage payments are paid while claim is being settled (no delays)
    • 1-in-5 households would face immediate financial uncertainty if primary wage earner suddenly passed
  • Disability Insurance – If you suffer a serious injury or illness and are unable to work, mortgage payments (and property tax) will be covered
    • Disabilities can include both physical and mental health issues
    • More common than you might think as 1-in-3 Canadians will be disabled for 90 days or more before age 65
    • 56% of Canadians on disability leave returned to work early due to financial reasons
    • Includes Terminal Illness coverage which will pay your mortgage so you can focus on self care

Why choose coverage through your Mortgage Agent?

  1. The coverage I arrange for you moves with you whether you change properties or switch banks – this is unique as bank or solicitor offered coverage is tied to the mortgage only
  2. Coverage isn’t dependent on your place of employment or status (ex: layoffs, furlough, Covid disruptions)
  3. Work insurance is often not sufficient coverage – Mortgage Insurance is a great way to top-up existing coverage to protect your family
  4. No Risk Coverage – 60-Day money-back guarantee if you change your mind

No one enjoys talking about insurance but it is an important component of your overall financial plan. Make sure you have the right Life and Disability Insurance to cover your mortgage payments and help protect the people you love.

Give me a call or drop me an email for a no-obligation mortgage review – and if you have family or friends that could benefit from these services, I will welcome the introduction.

Be well and talk again soon,

Time for a Financial Health Check

General Trevor Bumstead 21 Apr

Whether you have grand plans for the upcoming year or are comfortable in your daily routine, it’s always a good idea to take a few moments throughout the year to take stock of your financial needs and goals. With the start of a new year there is no better time than now to do a quick financial health assessment.

As home ownership often represents your largest single asset, it is important to look at this investment as part of this process. Even if you have no intention of selling or are mortgage free, in today’s market of low interest rates and competitive mortgage products there is opportunity to leverage your hard-earned equity to improve your lifestyle, reduce financial stress, or focus on building long-term wealth.

With a booming real estate market we’ve seen the average home price go up significantly over the last 6+ months.  This is being driven by a shift in market timing due to Covid, a swing in supply vs. demand, as well as record low interest rates. Currently, there are quality mortgage products in the market going as low as 0.99%* for a purchase and 1.29%* on a refinance. What this means for you is smaller monthly payments and/or the ability to unlock more equity in your home.

I am a licensed mortgage professional that works for you – not the banks – and I will provide you with unbiased professional advice that is customized to fit your needs.

If you, or someone you know answers yes to any of the below questions – we should talk.

  1. Are you a First Time Home Buyer and not sure where to start?
  2. Are you thinking/planning on buying a new home this year?
  3. Is your current interest rate >2.49%?
  4. Would you like to improve your monthly cash flow?
  5. Are you struggling to manage your debt load?
  6. Do you have any major purchases coming up such as a renovation or vacation home?
  7. Is your mortgage up for renewal within the next 12 months?
  8. Do you have a bruised credit rating?

Give me a call or drop me an email for a no-obligation review – and if you have family or friends that could benefit from these services, I will welcome the introduction.

Be well and talk again soon.


*January – 2020 – For qualified buyers