Shave 10 Years off Your Mortgage

Mortgage Tips Trish Pigott 13 Jun

🏡 Here’s a practical and effective plan for Canadians to shave 10 years off the life of their mortgage — without dramatically changing your lifestyle. This plan combines strategies to reduce interest and maximize your payments strategically.

🔹 1. Start with a Mortgage Check-Up
Review your amortization and interest rate. If it’s over 25 years or your rate is above 5%, you’re likely paying too much in interest. This is a free service we provide for all new and existing mortgage clients.

We will help you determine if a refinance or early renewal could save you thousands and reduce amortization.

🔹 2. Accelerate Your Payment Frequency
Switch from monthly to bi-weekly accelerated payments.

This results in 1 extra monthly payment per year.

Example: On a $500,000 mortgage at 5.5%, this can cut over 3 years off your term.

🔹 3. Increase Your Payments
Use your lender’s prepayment privileges to increase your regular payment by 10–20%.

Even an extra $100/month can shave years off your mortgage.

🔹 4. Make Lump Sum Payments Annually
Apply bonuses, tax refunds, or side income toward your mortgage as lump sum payments.

Most lenders allow up to 15–20% of your original mortgage as a lump sum annually without penalty.

🔹 5. Round Up Your Payments
If your payment is $1,184, round it to $1,200 or $1,250. You won’t feel a big difference month to month, but it can cut interest and time drastically.

🔹 6. Refinance Strategically
Refinance to a lower rate or shorter term if rates drop or your financial situation improves.

Consider refinancing to a 15- or 20-year term if you can handle slightly higher payments.

🔹 7. Avoid Mortgage Penalties Smartly
Time prepayments for your mortgage anniversary date.

Know your lender’s rules on lump sums, increases, and penalties to avoid surprises.

🔹 8. Use a Mortgage Prepayment Calculator
We do this for you with your mortgage check-up and will help you to visualize how extra payments reduce your amortization.

🔹 9. Automate Extra Payments
Automate your bi-weekly accelerated payments and any extra amount to make it consistent and effortless.

🔹 10. Review and Adjust Annually
Review your mortgage annually with us. Markets and rates change and so do your circumstances. Don’t assume this should only be done at the end of your term.

Re-evaluate your goals and income to determine if you can boost payments further.

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đź’ˇ Example: $500,000 Mortgage @ 5.5% Interest, 25-Year Term
Bi-weekly accelerated payments: Save ~3 years

$200/month extra: Save ~4–5 more years

$5,000 lump sum yearly: Save 2–3 more years
➡ Result: Mortgage paid off in ~15 years instead of 25

🚀 Final Tip:
Every extra dollar goes toward the principal early in your mortgage. The first 5 years are the most powerful time to make additional payments and shorten your mortgage dramatically. So if you have not had a mortgage check-up lately, book in with us, we will help you. It takes less effort than you think to become mortgage free.

5 Tips for Grads for Future Financial Success

Mortgage Tips Trish Pigott 12 Jun

Here are 5 essential financial tips every graduate should know before leaving school — practical, Canadian-focused, and geared toward long-term success:

🎓 1. Credit Scores Matter More Than You Think
Your credit score affects your ability to get a mortgage, rent an apartment, buy a car, or even get hired.

Start by getting a student credit card, using it responsibly, and always paying it off on time.

Monitor your score for free through your bank or apps like Borrowell or Credit Karma.

đź’ł 2. Avoid Lifestyle Inflation
It’s tempting to upgrade your lifestyle with your first “real” paycheck, but avoid overspending.

Stick to a budget and build a cushion before splurging.

Follow the 50/30/20 rule: 50% needs, 30% wants, 20% savings/debt repayment.

💸 3. Student Loans Don’t Disappear
Federal student loans in Canada have a 6-month grace period, but interest starts accruing immediately.

Make a plan to start repaying early if possible to reduce your total cost.

Use government repayment assistance if your income is low after graduation.

🏦 4. Start Saving — Even If It’s Just $25/month
Open a TFSA (Tax-Free Savings Account) or RRSP and start small.

Automatic transfers into savings build great habits and grow over time.

Compound interest is powerful — the earlier you start, the easier it gets.

📚 5. Financial Literacy = Financial Freedom
Learn about investing, budgeting, and taxes — it’s not as scary as it sounds.

Understanding your money = more control over your future.

If you would like to book a free 15 minute call to ensure you get on the right track, contact us and we will get you started.

Bank of Canada Pauses on further Rate Cuts

Latest News Trish Pigott 4 Jun

Todays report and insight is provided by Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres.

As expected, the Bank of Canada held its benchmark interest rate unchanged at 2.75% at today’s meeting, the second consecutive rate hold since the Bank cut overnight rates seven times in the past year. The governing council noted that the unpredictability of the magnitude and duration of tariffs posed downside risks to growth and lifted inflation expectations, warranting caution regarding the continuation of monetary easing.

The gap between the 2.75% overnight policy rate in Canada and the 4.25-4.50% policy rate in the US is historically wide. Another cause of uncertainty is the fiscal response to today’s economic challenges. If the Big Beautiful Bill, now under consideration in the Senate, survives, the US is slated to run unprecedented budget deficits. The Congressional Budget Office estimates it would add roughly US$4 trillion to the already burgeoning federal government’s red ink. This has caused a year-to-date rise in longer-term bond yields, steepening the yield curve.

Uncertainty remains high, and the US President just doubled the tariff on steel and aluminum to 50%, which could halt Canadian metals exports to the US. Last week’s release of the first quarter GDP report at 2.2% annualized growth was stronger than expected as exports and inventories surged before the tariffs. Final domestic demand in Canada was flat. More recent data showed considerable weakness, especially in labour and housing markets. Consumer spending has also slowed sharply.

In today’s press conference opening comments, Governor Macklem said, “The extreme financial turmoil we saw in April has moderated, and stock markets have recovered their losses. However, the outcomes of the trade negotiations are highly uncertain. Tariffs are well above their levels at the beginning of 2025, and new trade actions are still being threatened. The recent further increases in US tariffs on steel and aluminum underline the unpredictability of US trade policy.”

“So far, the US economy has proven resilient. Imports were strong as businesses tried to get ahead of tariffs, and that pulled down first-quarter US GDP. But domestic demand remained relatively strong. Early indicators for the second quarter suggest a rebound in growth as imports fall back and domestic demand continues to expand.

The flip side of the strength in US imports was a surge in Canadian exports. This boosted first-quarter GDP growth in Canada, which came in at 2.2%, slightly stronger than the Bank had forecast.

The labour market has weakened, with job losses concentrated in trade-intensive sectors. The unemployment rate rose to 6.9% in April. So far, employment has held up across sectors less exposed to trade. However, businesses generally tell the central bank they plan to scale back hiring.

The pull forward in exports and inventory accumulation in the first quarter borrows economic strength from the future, so the second quarter is expected to be much weaker. Canadian families and businesses’ spending has shown some resilience in the face of US tariffs and heightened uncertainty. But they will likely remain cautious, suggesting domestic spending will remain subdued.

Inflation excluding taxes was 2.3% in April, slightly more substantial than the Bank had expected and up from 2.1% in March. The Bank’s preferred measures of core inflation and other measures of underlying inflation moved up in April. There is some unusual volatility in inflation, but these measures suggest underlying inflation could be firmer than we thought. Higher core inflation can be partly attributed to higher goods prices, including food, and may reflect the effects of trade disruption. Many businesses report higher costs for finding alternative suppliers and developing new markets. The Bank will be closely watching measures of underlying inflation to gauge how inflationary pressures are evolving.

The Bank is also monitoring inflation expectations closely. In April, we reported that consumers and businesses expected prices to rise due to tariffs, while longer-term inflation expectations remained well anchored. Recent surveys continue to show consumers bracing for higher prices, and many businesses say they intend to pass on tariff costs.

Governing Council will continue to assess the timing and strength of the downward pressure on inflation from a weaker economy and the upward pressure on inflation from higher costs.

At this decision, there was a consensus to hold the policy unchanged as we gain more information. The BoC also discussed the path ahead for the policy interest rate. Here, there was more diversity of views. On balance, members thought there could be a need for a reduction in the policy rate if the economy weakens in the face of continued US tariffs and uncertainty, and cost pressures on inflation are contained.

Bottom line;

We expect the Canadian economy to post a small negative reading (-0.5%) in both Q2 and Q3, bringing growth for the year to 1.2%, just one tick above the recently released OECD forecast for Canada. The next Governing Council decision date is July 30, which will give the Bank time to assess the underlying momentum in inflation and the dampening effect of tariffs on economic activity.

If inflation slows over the next couple of months—we get two CPI releases and two jobs reports before the next meeting—and the economy slows in Q2 and Q3 as widely expected, the Bank will likely cut rates two more times this year, bringing the overnight rate down to 2.25%.

April 2025 Rate Announcement

General Trish Pigott 4 Jun

The Bank of Canada left rates unchanged as there was not enough reason to make another reduction given everything that is going on economically across the country and down south. The bank noted that the unpredictability of what’s happening with tariffs, lowered the risk to growth and a possible increase to inflation, determining that they were going to pause any further rate cuts until they see more data and the outcome so far.

Bottom Line according to Dr. Sherry Cooper, DLC’s own economist;

The US is determined to impose worldwide tariffs, disproportionately hitting Canada, Mexico, and China, the US’s top trading partners. This is a misguided neo-Mercantilist policy. Mercantilism assumes that the global economic pie is fixed, so if one country prospers, another must fail. This idea of a zero-sum game was debunked in the 18th century by Adam Smith and others who showed that if countries have a competitive advantage in various products and services, all are better off by producing and trading those products with the rest of the world. It is not a zero-sum game. The economic pie grows with trade. This was the idea behind globalization and the USMCA free trade agreement.

Given Canada’s vulnerability to tariffs, the economy will suffer more than the US, which has a relatively closed economy (where exports are a small proportion of GDP). Prices will rise depending on the duration and size of the coming tariffs, but mitigating the inflation will be the weakness in economic activity. Stagflation, a buzzword from the 1970s, is back in the lexicon.

We expect the BoC to resume cutting the policy rate in 25-bps increments until it reaches 2.0%-to-2.25% this summer, triggering a rebound in home sales. Layoffs and spending cuts will dampen sentiment, but lower interest rates will bring buyers off the sidelines. Housing inventories have risen sharply with new condo supply and a marked rise in the new listings of existing homes, and home prices are falling.

Because the pathway with tariffs is still unclear, the BoC decided in April on a wait and see approach. Our next Bank of Canada announcement is June 4 so we will have further insight and data to determine what will happen at that point.