New Mortgage Rules Could Hit Your Wallet

April 2018

If you’re shopping to buy a home, you may find the cost has gone up this year compared to last. On Jan. 1, 2018, the Office of the Superintendent of Financial institutions (OSFI) implemented stricter mortgage rules aimed at ensuring the housing market remains healthy and stable.

Stress tests for uninsured borrowers

Among the new rules is a requirement that lenders stress test their uninsured borrowers. Previously, only insured borrowers — those with a down payment of under 20 percent — faced a stress test. Under this new requirement, borrowers are stress tested at either the five-year average posted rate or two percent higher than their actual mortgage rate — whichever one is higher.

The objective of the test is to determine whether the borrower would be able to pay the loan if interest rates were to go up. In practical terms, the stress test would mean that a potential buyer of a $1 million home with 20 percent down would see their purchasing power reduced by about 15 percent.

No stress test required on renewals with your existing lender

On the bright side, the test doesn’t apply to mortgage renewals as long as they’re with the borrower’s existing lender. This new rule is the latest in a series of policy changes at both the federal and provincial levels aimed at ensuring Canadians can continue to afford their homes if interest rates rise.

The bottom line is that no matter how much your lender is willing to put at your disposal, you should only buy a home you can afford today and that fits into your long-term financial plan.

Interested to learn more about the ManuLife One all-in-one account? We’re here to help – contact us today!

Ottawa Rolls Out Easier Mortgage Rules

April 2020

The Department of Finance has changed the qualification criteria used in the mortgage stress test, effective April 6. This comes after criticism that the original policy was too tight and unfairly kept younger, first-time buyers out the market.

Under the new rules, the benchmark rate used to set the stress test threshold has changed from the five-year rate set by the Bank of Canada to the weekly five-year median insured mortgage rate used in mortgage insurance applications, plus 2%.

This change is notable as it materially reduces the threshold borrowers must reach to qualify for home financing, as the rates offered by lenders for insured mortgages are typically much lower than the posted rates at the big banks.

Currently, the change is only for insured mortgage borrowers – those who pay less than 20% down on their home purchase – but the same change will be brought in for uninsured mortgages too, according to the Office of the Superintendent of Financial Institutions.

Need help with your mortgage?

Did you know that we can assist you in obtaining a mortgage? We offer mortgage services through a referral agreement with Manulife Bank.

Give us a call, we are here to help.

Mortgage Stress Test Rates Increased to 5.25%

July 2021

Rising Interest Rates and Your Mortgage

April 2022

After nearly a decade of ultra-low borrowing costs, the Bank of Canada has begun raising the interest rate, pushing up the amount of interest charged on mortgages and other loans.

When interest rates rise, your loan payments will increase if:

Suppose you have a mortgage of $278,748 with a variable interest rate. Your interest rate is currently at 3.1%. You have 23 years left in your amortization (or repayment) period.

As indicated by the accompanying chart, if interest rates rise 3%, your mortgage payment will increase by $457 a month.

Similarly, rising interest rates can lead to an increase in the amount you must pay to cover other debt, such as a car loan or money owed on your credit card.
Preparing for a rise in interest rates

There are steps you can take to protect your finances — not to mention your mental health —— when you expect that the government intends to raise interest rates. For starters, you should pay down as much of your debt as possible ahead of the rate increase.

This will help you avoid the financial stress that can be caused by bigger loan payments.

Need Advice?

If you’re concerned about the impact that rising interest rates could have on your finances, give us a call. We’re always here to help.

Taking Out or Renewing a Mortgage? Here’s What You Need to Know

April 2022

There’s good news this summer for those of you shopping for a mortgage. Rates for five-year fixed mortgages have dropped to their lowest levels since summer 2017. Lenders are now offering fixed rates below 3%, which matches or beats the rates for variable mortgages.

Lower rates on home loans are certainly a welcome development for Canadians, but keep in mind that you’ll still have to pass the federal government’s mortgage stress test to qualify for your mortgage — and this will determine how much home you can afford.

Shopping for a new mortgage?

You’ll have to prove you could still afford your monthly payments if interest rates were to rise in the future.

Renewing your mortgage?

You can avoid a stress test if you renew with the same lender, but you’ll face a stress test if you switch to a new lender, refinance your home or take out a home-owner line of credit. Obtaining a mortgage should be a straightforward process, but problems can arise quickly that could cost you money and cause unnecessary aggravation.

It’s best to begin planning well ahead of any purchase deadlines or renewal dates, do your homework thoroughly and work with a qualified mortgage advisor. By taking these basic steps, you’re more likely to achieve the best possible result for yourself and your family.

The bottom line

Did you know that we can assist you in obtaining a mortgage? Whether you’re a first-time homebuyer or a homeowner renewing an existing mortgage, our mortgage specialists can help you decide on the mortgage and debt solution that is best for you. Give us a call, we’re here to help.

Choosing a Credit Card

If you’re considering getting a new credit card, you’ve got two basic choices: a no-fee credit card or a rewards card. A no-fee credit card provides an obvious benefit: there’s no annual fee. If you use a credit card only occasionally, a no-fee card could be your best option.

However, if you’re a frequent user of credit cards, you may be better off choosing a rewards card.

Rewards vs No-Fee

Pay Down your Debt Faster with Manulife One

June 2022

You want your money to work as hard as possible on your behalf. After all, you worked hard to earn it. But with today’s low interest rates, the reality is that the funds you keep readily accessible in basic saving and checking accounts aren’t doing very much for you.

That’s why for homeowners carrying a mortgage, it makes sense to consider an all-in-one mortgage and savings account, such as Manulife One. Over the life of a typical mortgage, the savings can be substantial.

How it works

Traditionally, people maintain a mortgage account for their home loan and keep separate personal accounts for smaller loans, chequing, savings, short-term investments, etc. With an all-in-one account, you combine your mortgage with your personal banking accounts to create a single account.

In essence, Manulife One allows you to borrow against the current market value of your principal residence, using your home as security. This money, in the form of a line of credit, is then used to pay off your existing mortgage and any other debt accounts you may have.

Pay less interest

The reason you’re able to pay off debt faster is that all the deposits you make, including your regular paycheques, go immediately towards reducing your debt. Over time, the amount you save in interest costs will likely be more than you would have earned by depositing the funds into interest-bearing personal accounts.

Manulife One also allows you to set up sub-accounts within the all-in-one account, providing you the flexibility to portion off debt under different fixed or variable terms.

Interested to learn more about the ManuLife One all-in-one account? We’re here to help – contact us today!

Higher Interest Rates Are Coming. Are You Ready?

July 2022

Interest Rates and Your Mortgage

Published: October 2023 | Updated: January 2024

Choosing the Right Mortgage Insurance

Purchasing a home is a significant investment, and with a mortgage comes the need for insurance as a safety net. But what type of mortgage insurance makes the most sense for you?

There are two main options: mortgage insurance provided by your financial institution or mortgage protection through one or more personal insurance policies from an insurance company.

Bank mortgage insurance

BOC Rate Cut: Good News for Borrowers

October 2024

On September 4, 2024, the Bank of Canada (BoC) lowered its key overnight policy rate to 4.25 per cent, a drop of 25 basis points.

The policy rate, which widely sets the cost of borrowing across Canada, has now fallen three times since June for a total reduction of 75 basis points, and BoC has opened the door to bigger cuts if the economy slows more sharply in the months ahead.

Canada's benchmark overnight rate levels, 2016 to present

Impact on mortgages

If you are thinking of buying a home or already have a mortgage, declining interest rates come as welcome news.

Every BoC cut translates to affordability gains for people hoping to get into the market and means slightly lower monthly payments for people with variable-rate mortgages.

The downward rate trend may also benefit fixed-rate mortgages by making the switch from the variable to the more predictable fixed-rate option more appealing. It may also mean those holding long-term fixed-rate mortgages at significantly higher rates could save money by refinancing into lower-rate mortgages.

Limited Relief for Credit Card Users

Credit card rates don't tend to change much in response to BoC rate cuts. That’s because they are influenced more by factors like risk premiums and operational costs than by central bank rates.

A Mixed Bag for Other Borrowers

New borrowers may receive help from lower interest rates, but those with existing fixed-rate loans will not see immediate changes.

Unlock Your Dream Retirement with a CHIP Reverse Mortgage

January 2025

Through a partnership with HomeEquity Bank, GP Wealth Management is now offering the HomeEquity Chip Reverse Mortgage.

A reverse mortgage is a type of loan that lets Canadian homeowners aged 55 and older borrow money against the equity they've built in their home. The amount you qualify for will depend on factors such as your age, the appraised value of your home, its location and the type of home.

With the CHIP Reverse Mortgage, you can gain new flexibility to fund your dream retirement lifestyle— while staying in the home you love.

How it works

The CHIP Reverse Mortgage allows you to access the total equity available from your home or only a portion while retaining the flexibility to access more of the funds in the future.

You don’t have to make any regular mortgage payments or pay back the loan until you sell or no longer live in the home. As the homeowner, you are required to keep the property in good condition and stay up to date with property taxes and property insurance.

Since the money received is a loan rather than income, it’s not taxed and doesn’t affect the Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may be getting.

The possibilities are endless.

You can use the funds to travel, renovate your home or help your children buy their first home. For those looking to simplify their finances, a CHIP Reverse Mortgage can also be used to pay down existing debt. And with a reverse mortgage in place, the stress of mortgage renewals goes away. For as long as you stay in the home, you get to enjoy it with complete peace of mind.

Mortgage Renewers Facing Higher Borrowing Costs

July 2025

Many Canadian homeowners face sticker shock at their next mortgage negotiation.

Fully 60% of mortgages are up for renewal in 2025 or 2026, according to the Bank of Canada’s 2025 Financial Stability Report.

Most were secured early in the pandemic when Canada’s interest rate was 1% or lower. Driven by pandemic spending, the rate later spiralled to a two-decade high. Since then, it has trended down, with the BoC’s overnight rate now at 2.75%.

Higher monthly payments

Still, borrowing costs remain above the early-pandemic lows and, as a result, hundreds of thousands of homeowners will likely renew their mortgage at a higher rate, the BoC says.

Of course, many households renewing their mortgage will have seen their income grow since securing it, particularly if they are approaching the end of a five-year term. Nonetheless, while the mortgage renewal shock may be smaller for some, the looming international trade war could lead to higher interest rates and pose a significant risk to household finances.

Start shopping early

That’s why it’s more important than ever to start planning and shopping around early and have a clear understanding of your renewal options.

You could play it safe by opting for a longer-term mortgage with lower monthly payments, but then you’re locked in at a higher rate and risk missing future cuts. Or you could go for a shorter-term or variable mortgage with higher monthly payments. But if interest rates rise, you may not be able to afford your future payments.

There’s no one-size-fits-all solution. Ultimately, you need to carefully evaluate your financial circumstances and risk tolerance before making a decision.

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Your Child’s First Credit Card

October 2025

Those tiny hands soon grow large enough to hold a credit card in their palms. However, just because your child is maturing physically doesn’t mean they have developed the financial maturity to manage credit effectively.

There are a number of factors to consider as you decide when and how to introduce a credit card.

Start with a debit card

Many parents have found it helpful to ease their kids into managing credit by helping them obtain a debit card during high school. Debit cards offer an opportunity to experience “the plastic” without all the risks associated with credit cards.

Once your child shows good debit card skills, consider adding overdraft protection. This will expose your child to a key responsibility of credit-card ownership, timely repayments, while keeping the risks low.

Credit card baby steps

The generally accepted age for getting a first credit card is after high school. A helpful learning exercise is a side-by-side comparison of multiple cards to determine which best suits your child’s needs. Be sure to discuss rates, fees and rewards, and review the fine print carefully.

Teach healthy spending and repayment habits

Sit down monthly to review purchases and reinforce needs versus wants. Stress paying the full statement balance—and always on time. This will help your child avoid the trap of carrying high balances.

Responsible use builds credit

Obtaining a credit card and using it responsibly will help your child build a good credit score. Keep in mind that payment history and amounts owed matter most, while account age is less influential.

So don’t rush: poor credit card management will harm your child’s credit score more than a longer account history can help it..

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Renewing your mortgage? What to Expect

April 2026

The worst of the mortgage renewal shock caused by the post-pandemic rate hikes is behind us. But the overall pressure will remain high throughout 2026 as a large volume of mortgages renew.

An estimated one million Canadian homeowners will refinance their mortgage this year, many trading pandemic-era rates below 2% for today’s rates of up to 3.70%.

That difference is meaningful

A $500,000 mortgage renewing from 1.39% to 3.69% translates to around $570 more per month. Variable-rate borrowers face a softer landing, having already absorbed most of the increase through past Bank of Canada (BoC) rate moves. For fixed-rate borrowers who locked in five years ago, the adjustment will be real.

Lower rates and income growth

After climbing to 7.20% by the summer of 2023, the BoC’s overnight rate currently sits at 2.25%. Meanwhile, many households have seen income growth over the past three years that helps them absorb higher debt service costs. 

Don’t count on rate relief. Most forecasters expect the BoC to hold rates steady through 2026, with some anticipating modest hikes by 2027. Bond yields, which drive fixed mortgage pricing, are also expected to rise. Tariff and global-conflict uncertainties add another layer of risk to the picture.

Consider shopping around

Your existing lender is unlikely to offer their most competitive rate — they already have your business. Starting your renewal conversation 90 to 120 days out, comparing lenders, and using competing offers as leverage are your best tools. A rate hold protects you against increases while preserving the ability to capture lower pricing if rates fall.

There’s no one-size-fits-all answer. But if you prepare ahead, you won’t find yourself scrambling when the renewal notice arrives.

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With a CHIP Reverse Mortgage, Your Home Could Be Your Best Retirement Asset

July 2026

You've spent decades building equity in your home. The CHIP Reverse Mortgage — available through GP Wealth Management's partnership with HomeEquity Bank — lets you put that equity to work for your retirement, all while staying in the home you love.

A reverse mortgage is a loan that allows Canadian homeowners aged 55 and older to borrow against the equity they've built. The amount you qualify for depends on factors such as your age, your home's appraised value and its location and type. You can access all of the equity available to you, or just a portion, with the flexibility to draw on more in the future as your needs change.

How it works

The appeal of CHIP really comes down to what you're not required to do. There are no regular mortgage payments, and nothing to repay until you sell or no longer live in the home. Because the money is a loan rather than income, it isn't taxed — and it won't affect the Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits you may receive. Your responsibilities are simply to keep the home in good condition and stay current on your property taxes and insurance. As a welcome bonus, the stress of mortgage renewals disappears for as long as you live there.

The possibilities are endless

How you use the funds is entirely up to you. Many homeowners put them toward travel, renovations or simply making everyday retirement more comfortable. Others use them to reorganize their finances, like paying down higher-interest debt and freeing up monthly cash flow that once went to payments. And a growing number tap their equity to help the people they love. For instance, you could gift an adult child the down payment on a first home or providing a "living inheritance" while they're still here to see the difference it makes.

In each case, the result is the same. You stay in your home, your investments keep working in the background and you still benefit from your home's future appreciation. Crucially, you gain these benefits without having to sell, downsize or draw down the savings you worked so hard to build.

For many retirees, that combination is what turns a good retirement into a comfortable, worry-free one.

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