Sunday, November 23rd1.9°C

Danger of focusing on low rate mortgages

Mortgage brokers know that a great rate and a great mortgage are not always synonymous.  Many clients have tunnel vision when it comes to interest rate but it is only one component.

How do we as mortgage professionals convince our clients of this when rate is the only thing they can easily compare?  How do we explain that avoiding potential costs like high mortgage penalties, refinance restrictions etc., often justifies paying more up front?

It is important for a consumer to ask their mortgage broker or specialist about the differences between a collateral change and a standard charge and the impact a collateral charge may have on their ability to shop for the best rate at maturity.  Also it is critical to understand the difference between the penalty charges by the Big 5 Banks versus the penalties of some of the other lenders with the same interest rates.

Most mortgage consumers do not realize that 63% of mortgages are broken before maturity and sometimes the differences in penalties can be over $10,000.  Some of the low interest, rock bottom mortgages are usually part of a no frills product and can cost thousands of dollars more in the future.

Some of the other components that are not always offered in a low rate mortgage are flexible prepayment options which will save thousands of dollars in interest costs over the life of the mortgage.  Add to this portability, assumability and the ability to refinance which are important considerations.

Sometimes saving money involves much more than the best rate.  It is essential to understand the trade-offs associated with some of the mortgage rates advertised.  This is why using an Accredited Mortgage Professional (AMP) is so important.


Please feel free to call me at 250-862-1806 or email me at [email protected] to set up your FREE mortgage rate consultation.


Keep your haunted home safe

Eerie sounds, spooky lights and Jack-o’-lanterns aglow—extra efforts at Halloween will keep visitors coming back for both tricks and treats. However, to keep the fun going, it’s important to plan your home’s scary set-up with safety in mind.  Decorations for special events, most often involving candles (like those found in Jack-o’-lanterns), account for an average of 800 home fires in North America, causing nearly $4 million in direct property damage every year.

To keep your house from being haunted with potential insurance woes, Wayne Ross, an insurance and claims expert for Aviva Canada, offers some Halloween preparation tips for preventing fires and other insurance claims:

Practice fire safety:  When setting up spooky electrical decorations and lighting, ensure that electrical outlets are not overloaded. Consider battery or solar powered Jack-o’-lanterns.

Make sure your walkways are safe:  Although darkness may set the Halloween mood, keep walkways well lit and obstruction-free to reduce the risk of injury and allow many goblins to walk through simultaneously.

Check your insurance coverage:  While homeowner policies generally will cover you and your property on Halloween, it is a good idea to contact your insurance broker to ensure that you have the right amount of coverage —especially with hundreds of small visitors to your home.

“It is the responsibility of homeowners to make sure their property is safe for visitors during the Halloween festivities,” states Ross. “By taking some precautions, homeowners can join in the celebrations and enjoy a safe night of fun with their families.”

While you’re planning for your Halloween haunt, talk your insurance broker or insurer to determine what you can do to keep trick or treating safe. More detailed information is available from your insurance broker or at

If you have any questions regarding home insurance and would like a referral to a broker or have question about mortgages please call 250 862 1806 or email me at [email protected].

Big bank predicts rate hike

The end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate.
“Firming price pressures and strengthening labour markets are consistent with a gradual path to normalizing interest rates,” TD Bank’s quarterly economic forecast, released Thursday, states. “We see the Bank of Canada beginning to raise its overnight rate in mid-2015.”
The overnight rate has been held at one per cent since September 8, 2010.
“The Bank remains neutral with respect to the next change to the policy rate: its timing and direction will depend on how new information influences the outlook and assessment of risks,” the Bank of Canada said in its most recent statement about the overnight rate, released in early September.
TD Bank, however, predicts the short term rate will hit 2 per cent by the end of 2016. The bank believes even a slight increase will put a limit on household spending, as debt-to income levels are still around 165 per cent.
Of course, it wouldn’t be an economic forecast if the bank didn’t mention the current state of the housing market, which it still holds a conservative stance on.
“In the near term, the housing market and household debt levels present an upside risk to the forecast,” the statement says. “Borrowing rates remain at record lows and housing momentum has stayed strong. Over the medium term, we still expect a cooling trend, consistent with a gradual increase in both trend inflation and interest rates.”
If you would like to set up a complimentary strategy to discuss your mortgage plan, please call 250-862-1806. or email [email protected].


Power-save your way to a down payment

Part 2 of 2  to read Part 1, click here.
5.  Dial down your vacations.
New York is out.  Maybe Buffalo.  For West coast, maybe Seattle instead of Hawaii.  Use sites like Airbnb ( to find cheap accommodations instead of staying in a pricey hotel.  Or stay home and use some of the money you saved on hotels to try some nice restaurants in your town.  This is a good practice for when you own a home and find that fancy vacations are unaffordable with out going into debt.
Summer vacation somewhere in the U.S.:                       $2500
Minus cost of a Staycation:                                              $  500
One-year savings:                                                            $2000
6.  Put a $100 price limit or less on birthday presents
Extravagant presents are fun to both give and receive.  But they're a luxury for people who are more financially settled than someone who is madly saving for a house down payment.
Yearly cost for a couple of buying presents for various occasions:        $1000
Minus using the $100 present limit:                                                        $  500
One-year savings:                                                                                   $ 500
7.  Cut your cable, TV and landline.
Almost like heat and electricity, an Internet connection is essential.  But a home phone is dispensable if you have a smartphone, and cable TV can be replaced with Netflix, watching shows online and using HDTV antenna.  Also, try buying up DVDs of movies and TV shows seasons at a garage sale, or find a store that sells used DVDs, CDs and videogames.
Yearly cost of cable and home phone:                                            $1200
Minus approximate cost of a Netflix subscription:                           $  110 
One-year savings:                                                                           $1090
8.  Halve your spending at Restaurants and Bars.
Studies of Generation Y spending habits show that going out to eat and drink is big.  Hey, everyone needs a hobby.  But this one is too expensive for people who are set on buying a house.  Aim to eat out less often, and rather that pay marked-up restaurant or bar tabs, grab some leftovers and a beer from the fridge.
Annual cost of spending $250 monthly:                                          $3000
Minus half the annual cost:                                                             $1500
One-year savings:                                                                          $1500
And one more thought: Ask for a raise at work!
The total savings per year from this week (6-8) is $5090 and last week (1-4) $13,750 for a total per year of over $18,840.  That is a 5% down payment on a $376,000 home!
If you have any questions about saving for your downpayment or anything else related to mortgages please call 250 862 1806 or email me at [email protected].

Read more Home Finance articles


About the author...

Laurie Baird is a Mortgage Broker with Verico Complete Mortgage Services. She has been in the mortgage business for 17 years starting as a lender with Royal Trust. She later worked at the Royal Bank as a Mortgage Consultant and 11 years ago became a Mortgage Broker. As a Mortgage Broker she is able to match her clients' needs with a lender who will provide them with competitive rates and products. Laurie has a Bachelor of Education degree from UBC.

Contact her at 250-862-1806 or by fax 712-0209 or visit:

Visit Laurie's blog at:

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.

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