Key Trends and Insights:

• The mortgage renewal "TIDAL WAVE" is coming! 
  
  
• In short, many Canadians received ultra-low "COVID" rates during 2020/2021 - and now 5 years has passed... Crazy, eh?!  
  
  
• Obviously, borrowers will not be renewing their mortgage at 1.29%F - the renewal rates will be ~3x higher
  
  
• Even though the Bank of Canada will likely reduce rates in December and January, it is important to lock in your renewal rates as early as you can (see below) - and then monitor rates as you get closer to the closing date
  
  
• Mortgage Nerdgasm - just because the Bank of Canada and variable rates fall… does NOT necessarily mean that fixed rates will also fall
  
  
• In fact, bond yields (which are strongly correlated to fixed rates) have been rising lately
  
  
• It is critical to PROTECT YOURSELF in case rates unexpectedly climb - which is still possible in this dynamic (and crazy) world

• On the variable rate side, even though the BoC’s rates will likely fall, the discount rate from Prime might be reduced
  
  
• For example, today, a bank might offer a rate of Prime - 0.7%, but in 3 months, the bank might “tighten its margin” and only offer a rate of Prime - 0.4%! 
  
  
• So even if Prime falls, you are losing the 'discount off of Prime' if you do not lock in rates
  
  
• This is why - You should NEVER renew your mortgage without speaking with an independent mortgage professional
  
  
• ADVANCED TIP - DID YOU KNOW - that approximately 50% of the time, the lender gives a great rate - and I recommend renewing
  
  
  
• That also means that 50% of the time, the lender gives a 'garbage rate' (yes, that is an industry term) - and we need to change lenders

REMINDER: What would I do NOW if I were buying??

Many buyers are sitting on the sidelines right now - and this could be a bad strategy

• I would buy something NOW NOW NOW, while the real estate market is "lukewarm"
  • Assuming, of course, the goal is to hold the real estate for the long term and the property is affordable 
• Buy asap - and set the closing date for 90-120 days
• Get TODAY'S price on the purchase (negotiate hard!) and get TOMORROW'S interest rates!
• Buyer's who wait until rates fall could see BIDDING WARS back
• ALSO - mortgage rules are changing in December, making it MUCH easier for first-time buyers to qualify for a mortgage. 
• This means that MATHEMATICALLY, there will be more buyers

GROWTH IN PRIVATE LENDING CONTINUES

• We are seeing huge demand for our private lending services - where we represent the LENDER or the BORROWER
• Because of the complexity and risk of private lending, a special license is required - either a “Level 2” agent or a mortgage broker
• Generally, private lending can be grouped into two areas:
  • Bridging a specific problem (eg. Someone bought a house but the previous house did not sell yet - and the problem will be resolved once the house sells)
  • General economic hardship (eg. due to divorce, job/business losses, health issues, etc).  Depending on the scenario, the borrower might need to sell the property and the private mortgage will help to buy some time before the sale

The information provided in this message is provided courtesy of Elan Weintraub, one of the principals of MortgageOutlet.ca – an independent Mortgage Brokerage offering sound, reasoned and balanced advice. He can be reached anytime at 647-501-4663.

Robert Miller and Monika Lowry are not mortgage advisors and are providing this information for educational purposed to their real estate clients who may be considering the sale and / or purchase of a property in 2025 and beyond.

We hope this has been a valuable insight and is helpful as home buyers and sellers navigate their mortgage options in the current economic envronment.