What Insurance Protection Does Your New Home Need?

Home Tips Trish Pigott 30 Aug

More buyers are coming off the sidelines and looking to enter the market. Prices are high, so protecting your investment and home is more important than ever.

What insurance will you need to protect your new home? A quick Google search will turn up title and home insurance entries. They each protect consumers but from very different things. Here’s a quick breakdown of each type of insurance and why appropriately protecting yourself takes both:

Title insurance

What is title insurance?

Title insurance protects your right to own your property. It deals with hidden issues your home may have and future risks like fraud. This is just some of what title insurance covers:

  • Title defects that can keep you from selling,
  • Title fraud and home title theft,
  • Encroachment and access issues,
  • Tax arrears and unpermitted work from previous owners.

Want to know more about title insurance coverage?

How much is title insurance?

You only pay once for title insurance, usually between $250—$1000, depending on where your home is and how much you bought it for. Premiums will often be based on purchase price or current market value. There are no monthly or annual payments, and your coverage lasts for as long as you or your heirs have an interest in the property.  This is arranged with the lawyer or notary when you complete your purchase.

Home insurance

What does home insurance cover?

Home insurance covers four main things:

  • Damage to your home or other structures on the property,
  • Lost, damaged or stolen valuables, depending on your policy,
  • Liability for accidents or injuries that happen on your property,
  • Losing use of your home because of an event covered by your home insurance (usually to do with damage to the house).

How much is home insurance?

It varies, but the average cost of home insurance can range between $1,000-$2500 per year. Your price can change yearly if you switch providers or update your coverage. Many home insurance policies also allow you to purchase additional coverage, like flood protection, which increases your premiums.  The higher your insured value is, usually affects your annual premium.  Home insurance can be paid in a lump sum annually or can be paid monthly with most providers.

Which do you need, home insurance or title insurance?

They cover very different things, so you need both. It’s the only way to protect both your home itself and your ownership of it.  Home insurance is required by all mortgage lenders for all single detached homes and if you are purchasing in a strata, you will want appropriate coverage for your strata insurance deductible as they can be extremely high.

  • Title insurance doesn’t cover most property damage, lost or stolen items, or medical/injury liability.
  • Home insurance doesn’t cover fraud, back taxes, or the City forcing you to alter or remove structures on your property.

Example of a title insurance claim

A north Ontario homeowner and her neighbour had discovered that her water and sewage lines didn’t connect to her street. Instead, they related to the next road via her neighbour’s property. They forced her to relocate her water and sewer lines at a huge expense.

But fortunately, she had a title insurance policy in place with FCT. We stepped in to resolve the issue for her, and we were able to cover the total cost of moving her water and sewer lines.

Paid: $115,284.32

Without title insurance, where would the homeowner, in that case, have come up with $115,000? The risks title insurance protects you from are unpredictable and expensive. If you don’t have title insurance and home insurance, the truth is that you’re at risk.

How can you get protected?

You can get title insurance coverage, even if you own your home with an existing homeowner’s policy. But the best time to start protecting your new home is while purchasing it. Talk to your lawyer or notary about title insurance from FCT or other providers, or learn more about residential title insurance here.

For Home Insurance, we have some great partners that we will offer to connect you with at the time of your mortgage completion.  They too are brokers so they will shop the insurance market for you to ensure you are getting the best coverage with the best premium.

Have any questions about your next purchase? There are never too many questions when it comes to protecting your home. Give us a shout at 604-552-6190 if you ever have any questions.


Trish & The Primex Team


Five Steps to Crush Your Credit Card Debt

Home Tips Trish Pigott 23 Aug

Although most credit card interest rates have not been affected by the recent surge in the prime lending rate, the fact remains that credit card debt is usually the most expensive debt you can have. The average is around 20%, and even the so-called ‘low interest’ cards carry a rate above 10%. Expediting the demise of your credit card balance should be the number one focus for anyone looking to improve their financial situation. Here are five actions to get you started.

  1. If you carry a balance, the first step is to put the card(s) away. Whether you put your card in the food processor or temporarily turn them off (our recommendation), you must own up to your mistake and not add fuel to the fire. If it’s the case where you have no choice but to use the card (a prepayment, for example), make sure to make a payment to cover that charge right away.
  2. Take a minute to understand the consequences of a credit card balance fully. Search out the details of your credit card statement until you find the section that tells you exactly how many years it will take to eliminate that balance with minimum payments. While you are at it, confirm the interest charge for that month and just how little of your payment is going toward reducing the balance. It can be a bit shocking, but also quite motivating! The government has a simple online calculator for you to analyze different repayment options easily.
  3. Plan your repayment attack. Making a few random spending sacrifices and hoping you will have a little more left at the end of the month to pay towards your card is wishful thinking. You need to figure out ASAP the maximum amount you can throw at your credit card debt every month and chart out when you will be debt-free. Set up an automatic transfer from your bank account to your card every payday and make that money invisible – you can’t spend what you can’t see!
  4. Investigate the balance-transfer credit card option. But only if you have a plan and are confident you can pay off the balance within the prescribed period! A balance transfer card shifts your debt to a new card (for little or no fee) which offers a limited period (usually 6 -12 months) with a very low-interest rate (often 0%) to pay off the balance. This cuts your interest expense to zero and ensures that 100% of your payment goes to reducing the balance. However, you must be very disciplined and have the income to make regular payments. The card company is banking on you to fail and hopes you will miss the payment deadline because that will trigger an avalanche of penalties, fees and interest charges that will put you worse off than ever!
  5. Pick up the phone and call your card company. It might be possible and easier than you think to negotiate a lower interest rate on your credit card. If you have had a card for a while, carrying a balance, and making the minimum payments, you are a valued customer! Your card issuer is very interested in keeping your business and may be willing to negotiate. You will have to get through to the right people and know what to say, but 15 or 20 minutes on the phone could save you a chunk of cash – even a few percentage points would help.

The above tips will help you get started on the road to eliminating your credit card balance. There are no shortcuts, and it may require a lot of sacrifices depending on your debt, but the mental burden that lifts when you see a big zero under “balance due” will be worth it!

Refinancing your mortgage and doing a debt consolidation is also another option for existing homeowners that have enough equity in the property to consolidate the debt with the mortgage.  This will lower the rate and improve cash flow drastically by bundling all payments into one.  We start with running the numbers first to ensure it makes sense to do that.

If you have any questions at all, we are always here to help. We are your number one supporters and wish to see you thrive! We can also help create a plan to help you pay off your debt and raise your credit score to help obtain the best mortgage possible.

Trish & The Primex Team

Understanding Mortgage Rates

Mortgage Tips Trish Pigott 16 Aug

While not the only factor to consider when choosing a mortgage, interest rates remain one of the more prominent decision criteria with any mortgage product. Understanding how mortgage rates are determined and the differences between your typical fixed-rate and variable-rate options can help you make the best decision to suit your needs.

How Rates Are Determined

The chartered banks set the prime-lending rate (the rate they offer their best customers). They base their decisions on the Bank of Canada’s overnight rate because it influences their own borrowing. Approximately eight times per year, the Bank of Canada makes rate announcements that could affect your mortgage as variable mortgage rates and lines of credit move in conjunction with the prime lending rate. When it comes to fixed-rate mortgages, banks use Government of Canada bonds. In the bond market, interest rates can fluctuate more often and provide clues on where fixed mortgage rates will go.

Simply put, a variable rate is based on the current Prime Rate and can fluctuate depending on the market. A fixed rate is typically tied to the world economy, whereas a variable rate is linked to the Canadian economy. When the economy is stable, variable rates will remain low to stimulate buying.

Fixed-Rate vs. Variable-Rate

Fixed-Rate Mortgage

First-time homebuyers and experienced homebuyers typically love the stability of a fixed rate when just entering the mortgage space.

The pros of this type of mortgage are that your payments don’t change throughout the life of the term. However, should the Prime Rate drop, you won’t be able to take advantage of potential interest savings.

Variable-Rate Mortgage

As mentioned, variable-rate mortgages are based on the Prime Rate in Canada. This means the interest you pay on your mortgage could go up or down, depending on the Prime. When considering a variable-rate mortgage, some individuals will set standard payments (based on the same mortgage at a fixed rate). This means that should Prime drop and interest rates lower, they would pay more to the principal instead of paying interest.

If the rates go up, they pay more interest instead of direct to the principal loan.

Other variable-rate mortgage holders will allow their payments to drop with Prime Rate decreases or increases should the rate go up. Depending on your income and financial stability, this could be a great option to take advantage of market fluctuations.

Getting into the real estate market? Let’s get you pre-approved! That way you can be confident making an offer on your dream home.

Let’s chat!



Trish & The Primex Team

Market Beware: Subject Free Offers

General Trish Pigott 9 Aug

When purchasing a home, most offers include conditions or subjects, which are requirements or criteria to be met before the sale can be finalized and the property is transferred. Some of the most common subjects include:

  • Financing approval
  • Home inspection
  • Fire/home insurance protection
  • Strata document review if appliable

The purpose of these subjects is to protect the buyer from making a poor investment and ensure no hidden surprises regarding financing, insurance, or the state of the property.

These conditions are written up in the purchase offer with a removal date. The seller agrees to this before the sale is finalized. The deal can go through, assuming the subjects are lifted by the removal date. If the subjects are not lifted (perhaps financing falls through or something is revealed during the home inspection), the buyer can waive the offer, and the purchase becomes void.

However, recently, especially in heightened housing markets, subject-free (or condition-free) offers have emerged. These are purchase offers that are submitted without any criteria required! Essentially, what you see is what you get.

Below we have outlined the impact of subject-free offers on both buyers and sellers to help you better understand the risks and outcomes:

Pros of Subject-Free Offers

  • Buyers: The main benefit of a subject-free offer for a buyer is the ability to “beat the competition” in a heated market. However, it is not without risks.
  • Sellers: Typically, a subject-free offer will include a competitive price, willingness to work with the dates the seller prefers, and evidence that the buyer has already done as much research as possible. If time is sensitive for the seller because they are trying to purchase another home or want to move as soon as possible, they may also choose your offer over subject offers to expedite the process.

Cons of Subject-Free Offers

  • Buyers: As a buyer submitting a subject-free offer, you are assuming a great deal of risk in several areas, including financing, inspection, and insurance:
    • Financing: While buyers may feel that they have a pre-approval, so they don’t require a subject to financing, it is crucial to recognize that a pre-approval is not a guarantee of funding. If you submit a subject-free purchase based on a pre-approval, buyer beware. The financing is subject to the lender approving the property and the sale, from the price and location to the property type or other variables the lender deems essential. By submitting a subject-free offer without a financing guarantee (or an inspection, title check, etc.), there is a risk that the deal can fall through. Even when you do not include subjects on the offer, you still are required to finance your purchase. In addition, as sales are typically submitted with a deposit, there is a risk that the buyer will lose their deposit if the subject-free offer falls through. This amount can vary in the thousands and is typically a percentage of the purchase price or down payment.
    • Inspection & Insurance: If a buyer is also opting to skip the home inspection and home insurance protection subjects to have the offer accepted, then they assume massive risk as they do not know what they are getting and whether or not the property is up to code for insurance.
    • Due Diligence: With subject-free offers, there is no opportunity for due diligence after the offer. This requires the buyer to do all their research before their initial bid. Because it is firm and binding, a buyer who decides to back out will likely be met with severe legal ramifications. Submitting an offer without subjects is not due diligence and is at the buyer’s behest.
  • For Sellers: When it comes to the individual selling the property, there is less risk with subject-free offers but not zero. While the benefit is essentially there is no wait to accept the offer on the seller’s side, they do not know for sure if financing will come through.

Financing Around Subject-Free Offers

When submitting a subject-free offer, it is up to the buyer to do as much due diligence as possible before submitting. They must identify what the lender seeks to ensure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their best to secure financing beforehand.

Contractual Obligations

Be mindful when it comes to purchasing offers versus purchase agreements. While your purchase offer is a written proposal to purchase, the purchase agreement is an entire contract between the buyer and seller. The purchase offer acts as a letter of intent, setting the terms you propose to buy the home. If financing falls through, for example, the contract is breached, where the buyer may lose the deposit.

It is also essential to be aware of a breach of contract if a seller chooses to take action. For example, if you submit a subject-free offer of $500,000 and cannot secure financing for that offer, and the seller turns around and is only able to get a $400,000 deal with another buyer, they could potentially sue the initial buyer for the difference due to breach of contract.

Preparing a Subject-Free Offer

If you have decided to go ahead with a subject-free offer, regardless of the risks, there are some things you can do to mitigate potential issues, including: 

  • Get Pre-Approved: Again, this is not a guarantee of financing when you make an offer, but it can help you determine whether you would be approved.
  • Financing Review: Identify what the lender seeks to ensure they walk away with a mortgage. Though approval is never certain, prospective buyers placing a subject-free offer should do their best to secure financing beforehand.
  • Do Your Due Diligence: Look into the property and determine if there have been significant renovations or a history of damage. This could come in the form of a Property Disclosure Statement. While this statement cannot substitute a proper inspection, it can help identify potential issues or areas of concern. If possible, conduct an inspection before submitting your bid/offer.
  • Get Legal Advice: This can help you determine your potential risk and ramifications of the offer, should it be accepted or otherwise.
  • Title Review: Be sure to review the title of the property.
  • Insurance: Confirm that you can purchase insurance for the home. Remember that an inspection may be required for this, but in some cases, you can substitute for a depreciation report if it is recent.
  • Strata Documents (if applicable): Thoroughly review strata meeting minutes and related documents to determine areas of concern.

While there are things that can be done to help with subject-free offers, it is still risky. Ultimately submitting an offer with subjects gives you the time and ability to gather information on the above and access to the property or home for inspections.

Before making any offers, get a Pre-Approval in place so you can make the best decision. If you are intent on submitting a subject-free offer, discuss it with your real estate agent, as they can determine if a subject-free offer is necessary or if a short closing window would suffice to seal the deal. A good realtor will also keep you informed of potential interest and other bids during the process. Their goal should be to maximize your opportunity and minimize your risk.

Getting ready to put an offer in on your dream home? Call us first, we have many strategies to help shorten the traditional subject period and make your offer more competitive without going subject free to protect yourself.



Trish & The Primex Team

Are you Moving soon?

Home Tips Trish Pigott 2 Aug

If you want to up or downsize your home and are moving during your current mortgage cycle, keep a few things in mind. First, making any change to your mortgage during your mortgage term is considered “breaking” the mortgage.


If your mortgage is portable, moving up and scaling down will be much simpler. If you are unsure of the term, “porting” your mortgage refers to taking your existing mortgage (including your rates and terms) and transferring it from the original property to another. This can only be done if you’re purchasing a new property at the same time you’re selling your old one. However, unlike mortgage refinancing, porting does not require breaking your mortgage or paying penalties.

Consider The Penalties

Whenever you break your mortgage, there are penalties associated with that, as it is a contract. Depending on the type of mortgage you have (variable vs. fixed-rate) and how much time is left (1 year, two years, etc.) will determine the level of penalty. Typically, these are calculated in one of two ways:

Interest Rate Differential:

In Canada, there is no one-size-fits-all rule for calculating the Interest Rate Differential (IRD), and it can vary significantly from lender to lender. This is due to the various comparison rates that are used. However, typically the IRD is based on the following:

  • The amount remaining on the loan
  • The difference between the original mortgage interest rate you signed at and the current interest rate a lender can charge today

Ideally, you should know your IRD penalty before breaking your mortgage, as it is not always the most viable option.

Three Months Interest: 

Sometimes, the penalty for breaking your mortgage is equivalent to three months of interest. This penalty typically accompanies a variable-rate mortgage.


If you are unable to port your mortgage, you would need to re-qualify for a new mortgage at the current rates offered by lenders and would be subject to government changes – including recent “stress test” rules.

If it has been a while since you bought your first home, you may be unfamiliar with the “stress test.” If you are purchasing a new home with a new mortgage, it is essential to understand this test, as it is a requirement to qualify.

The Stress Test was introduced in October 2016 for insured mortgages (down payments of less than 20%). Still, as of January 1, 2018, this includes all mortgages, regardless of the down payment percentage. This test determines whether a home buyer can afford their principal and interest payments should interest rates increase. It is based on the 5-year benchmark rate from the Bank of Canada or the customer’s mortgage interest rate plus 2% – whichever is higher.

Shopping for your next home? Let’s get you prepared. We can go over your options with your current mortgage, and decide what works best for you!

Let’s connect!



Trish & The Primex Team