Mortgage Types 101

General Trish Pigott 29 Nov

Get to know the basics before you choose your mortgage. You must select the most important to you – lower rates or flexibility. Take some time to study mortgage types:

Closed Mortgage: A closed mortgage is best if you want consistent rates. Interest rates are typically lower (and do not change with the length of the term). However, a closed mortgage does not offer much flexibility in paying off your mortgage sooner – with the exception of a once-a-year lump sum payment up to 20% of your entire mortgage.

  • Predictable and consistent payment amount
  • Often comes with lower interest rates
  • Limited flexibility with paying down the mortgage faster
  • Cannot change interest rate during the term of the mortgage

Variable Mortgage: A type of mortgage where the interest rate is based on the lender’s prime rate plus or minus a certain percentage. Your mortgage payments may vary depending on the current interest rate. Variable mortgages can offer lower interest rates than fixed-rate mortgages but also have more uncertainty and risk.

  • Uncertainty surrounding payments
  • Pay less over time
  • Take advantage of lower rates when interest rates are low.

Open Mortgage: If you are looking for flexibility in paying off your mortgage, consider an open mortgage. No penalty is incurred if you decide to make lump sum payments or pay off your mortgage before the term expires; however, this flexibility comes often with a higher interest rate – which can result in higher monthly payments.

  • Maximum flexibility: no penalty for making lump sum payments or paying off your entire mortgage before the term expires
  • Higher interest rate
  • Best for those looking to pay off their mortgage as soon as possible

Choosing the right mortgage can be daunting, but it’s essential to take the time to understand the options available to you. Whether you value consistent payments, flexibility, or the ability to pay off your mortgage sooner, there is a mortgage type that will suit your needs. Do your research, and select the mortgage that aligns with your financial goals. By doing so, you can take the first step towards owning your dream home.

Don’t hesitate to contact us with any questions or if you want to start the mortgage process for yourself!

Trish & The Primex Team 

Financial Literacy Month – November

General Trish Pigott 22 Nov

November is Financial Literacy Month, and we have the tips to ensure your financial game is on point this Fall as we head into the New Year!

Nail Down Your Budget

Understanding the basics of budgeting and tracking your income versus spending is fundamental to financial literacy and control. Building a budget can help you define your spending habits and determine where there is room for adjustments, and this gives you a chance to review your cash flow situation to ensure it aligns with your financial goals.

Ideally, your budget will fall close to the range of the following:

  • 32% of your income for housing, including property taxes, maintenance, utilities, etc.
  • 26% of your income for life, including groceries, medical, childcare, vacations, fun, etc.
  • 16% of your income for transit, including car payments, bus passes, gas, etc.
  • 16% of your income for debt, including credit cards, lines of credit, loans, etc.
  • 10% of your income for savings, including long-term planning, retirement, etc.

Dedicate Your Savings

Many individuals will have a savings account connected to their chequing account. This can be a bad habit, as using your savings account as a second account becomes too easy versus a dedicated account for emergencies, vacation planning, or more. Ideally, you are putting 10% of your monthly income into savings whenever possible.

Live Within Your Means

This one seems simple, but it isn’t easy to do – especially if you don’t have a proper budget! By putting together a budget, as mentioned above, you can see where you are spending your income and how it compares to what you are bringing in. Ideally, you are adjusting your spending to ensure that you are not going over the cash flow with priority expenses first, followed by leisure.

Understand Your Banking Options and Interest Rates

Having a 16% interest rate loan, a credit card that you’re barely making payments on, or a savings account that doesn’t give much back are all areas for consideration when truly understanding your options. Sometimes, a different bank, account type, or loan type can significantly affect your financial position. There are plenty of options, especially at mortgage renewal time, for consolidating your debt, changing your mortgage, getting a better interest rate, and more!


Check Your Credit

An annual review of your credit score and credit report is a huge part of financial literacy, which plays a crucial role in your financial status. Your credit score affects your loans, credit cards, mortgages and the interest rate you can qualify for, so be sure to understand where you fall on the scale.


Plan for Big Expenses

Are you looking to replace your car? Planning a family vacation? Need to renovate your kitchen or replace some furniture? These are all typically more significant expenses that should be prepared for in advance. While sometimes an appliance will break and need to be replaced, the goal is to have funds in your budget (or savings) for unexpected things and to plan out spending before large purchases or bookings. This ensures that you know you’re already paid when you get on that plane or drive off that car lot!

Review Your Financial Progress

Many people set up a budget but forget to update it along the way! Ideally, if any of your expenses change, such as an increase in your streaming services bill or utilities, you are updating your budget in real-time to ensure that you are keenly aware of what is coming into your account and going out. An annual review is a good idea for an overall budget clean-up, but maintaining it all year will help you get the best picture of your financial situation.

Stay Informed

Whether you’re new to financial literacy and budgeting or want a refresh, taking control of your finances and better understanding your spending, cash flow, and options will help you get the most out of your income! It’s a perfect time to get your finances for the new year!

Trish & The Primex Team


Fall Home Tips

General Trish Pigott 15 Nov

Even though Fall has already started, there are a few things you can do still to ensure your home is well-prepared for the season:

  • Examine Your Gutters: This time of year it is important to clean and inspect your gutters (replacing as needed) to ensure they are working properly as the rain and snow season hits. If they are clogged or damaged, it could result in flooding or exterior damage – so don’t wait!
  • Check for Drafts: In the Fall and Winter, many homeowners are spending extra money heating their homes due to drafts, but it doesn’t have to be that way! Do a check on all exterior doors and windows to confirm if they are properly sealed. To do this, simply close a door or window on a strip of paper. If the paper slides easily, you need to update your weatherstripping.
  • Inspect Your Furnace: We are no strangers to chilly evenings! To ensure you are comfortable throughout the colder months, be sure to have your furnace inspected by an HVAC professional. They can check leaks, test efficiency, and change the filter. They can also conduct a carbon monoxide check to ensure air safety.
  • Manage Your Thermostat: As tempting as it is to turn your heat all the way up in the winter, proper thermostat management will help you save costs in the long run. Using a thermostat with a timer can save you even more. Turn them on earlier so the room heats up in time for use and have it turned off 30 minutes before bed or before leaving the home. If you find you are still chilly at night, a safely positioned space heater and closed door is an inexpensive solution.
  • Fix Any Concrete/Asphalt Cracks: This one is easy to ignore thinking it will be fine, but it could easily turn into a bigger issue. When water gets into existing cracks during the colder months it will freeze and expand, causing the crack to become even larger.
  • Turn Off Outdoor Plumbing: Since your garden will not need attention until the Spring, it is a good idea to shut off and drain all outdoor faucets and sprinkler systems. Depending on where you live, you might also want to cover them to prevent freezing during the Winter months.
  • Change Your Batteries: For safety, it is recommended that you check that all smoke detectors and carbon monoxide devices are working at least a couple of times throughout the year. While doing other Fall home prep, add this one to your list!
  • Create a Storm Kit: A storm kit is a handy source of essential items in the event of losing power. Consider what you and your family might need, such as a flashlight with new batteries, candles, matches, a portable radio, water, and snacks. Keep your kit somewhere easy to access.

Whatever your plans this season, a quick check of your home will ensure there are no surprises!

Trish & The Primex Team 

New Changes to Combined Loan Plans

General Trish Pigott 1 Nov

As rising household debt puts our country’s financial system on edge, new guidelines from the Office of Superintendent of Financial Institutions (OSFI) have taken effect today, November 1st, that will reduce some Canadian homeowners’ borrowing power.

Those who have a Combined Loan Plan should have received a letter from their bank on whether they have been affected by these new changes. Combined Loan Plans are typically mortgage loans with a home equity line of credit (HELOC). As you pay down your mortgage principal each month, that money becomes immediately available in a line of credit up to a certain threshold, which lets borrowers keep their mortgage balance and line of credit at 80% Loan to Value (LTV).

Banks will introduce the new limit between October 31st – December 31st, depending on their fiscal year. The decrease from 80% to 65% will be gradual, with banks having 25 years to transition current HELOC borrowers.

“If you have a mortgage and pay $1,000, your available borrowing limit on your line of credit grows by $1000,” says Ottawa-based mortgage broker Andrew Thake. “But when banks implement the new limit, for that $1,000 payment on your mortgage, your line of credit will only grow by $875.”

This change won’t affect mortgage payments or the price of housing, only the amount of money you can borrow.

Suppose a homeowner renews their mortgage and the total combined LTV exceeds 65%. In that case, payments to the mortgage principal will increase the available funds on the line of credit on a factor lower than the previous 1-1 ratio.

If the total combined LTV is less than or equal to 65%, payments to the mortgage principal will increase the available funds on the line of credit on a 1-1 ratio to a maximum LTV of 65%.

Here is an example of two scenarios provided by MCAP:

Total combined LTV is less than or equal to 65% Total combined LTV is greater than 65%
  • A mortgage payment that reduces the principal amount of the mortgage by $1,000 will increase the available credit limit on the line of credit by $1,000
  • A mortgage payment that reduces the principal amount of the mortgage by $1,000 will increase the available credit limit on the line of credit by $825
  • The remaining $175 will reduce the overall debt and cannot be accessed

The Combined Loan Plan is a great way to provide homeowners with payment options that match their needs and cash flow. Whether they are looking to take on home renovation, make repairs, major purchases, medical emergencies or unexpected expenses that might arise from a job loss. Secured debt, like a HELOC, is an easy way to take care of major expenses with a low-rate line of credit.

If you are curious as to how this will affect your overall finances, feel free to get in touch with me! Or, if you are looking to add a HELOC to your mortgage, you can CLICK HERE to book a quick call to get started!

Trish & The Primex Team