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.

đź“š 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.

Tips to Pay off Your Mortgage Faster

Mortgage Tips Trish Pigott 25 Sep

Paying off your mortgage faster in Canada can save you a significant amount in interest and help you become debt-free sooner. Here are the top 5 tips to achieve that:
 
1. Make Biweekly Payments
 
Instead of making one monthly payment, switch to biweekly payments. This results in 26 half-payments, which equals 13 full payments each year instead of 12. That extra payment can significantly reduce the interest over time.
 
2. Pay Extra Toward the Principal
 
Whenever you can, make extra payments that go directly toward the principal balance. Even small additional amounts such as $100 can have a huge impact, especially if done consistently over the life of the loan. Usually you can make lump sum payments up to 15-20% of your original mortgage amount without penalty.
 
3. Refinance to a Lower Interest Rate
 
Refinancing from a higher rate to a lower rate can significantly reduce the interest paid over time. Although you may have to pay a penalty to change the mortgage, often you will save and pay less interest in the long run.
 
4. Round Up Your Mortgage Payment
 
Round up your regular mortgage payment to the next $100. For instance, if your bi-weekly payment is $1321, round it up to $1400. Chances are you won’t even remember you did it a month later and that extra amount goes straight to principal.
 
5. Shorten the Amortization Period
 
When your mortgage renews, try to shorten the length of your amortization period (e.g., from 25 years to 23 or even 20 years) can dramatically lower the total interest paid and get you mortgage-free faster.
 
By following these strategies, you can minimize interest and accelerate the path to being mortgage free faster!

The True Cost of Downsizing

General Trish Pigott 10 Oct

Many Canadians consider downsizing during their retirement years. Once their children have left the nest, the choice seems obvious: relocate to a smaller residence or a more affordable town and capitalize on the price difference. For many retirees, the funds from the sale of their home can significantly impact their overall lifestyle and financial well-being.

However, there are downsides of downsizing you should be aware of before you call your Realtor.

Downsizing in British Columbia: A Cost Analysis

The cost of moving is probably one of the most significant downsides to downsizing. To give you an idea of the figures involved, we conducted a cost analysis for a typical downsizing scenario using an example of selling a home in Vancouver for $1,000,000 and buying a condo for $700,000.

This would free up $300,000 in equity while moving you into a smaller home. According to Stats Canada, you need a nest egg of about $450,000 to retire comfortably in Canada. The money from the sale of your house could have a meaningful impact on your retirement finances. But how much of that chunk will you get to keep to boost your nest egg? Below is an estimated list of cost considerations when choosing to downsize:

Fees Downsizing CHIP Reverse Mortgage
Real estate fees (average 7% selling price on the first $100k of the home price, and average 1% on the remaining total) $34,000 N/A
Legal Fees $1,200-$2,400 $300-$600
Land Transfer Tax (Varies depending on province and city) $12,000 N/A
Moving expenses (packing supplies, moving service, garbage removal, etc.) $3,000-$6,500 N/A
Furnishing and upgrades $8,000-$25,000 N/A
Home appraisal $500 $300-$600
Closing fee $500-$2,250 $1,795-$2,995
Total $59,200-$82,650 $2,395-$4,195

 

As you can see, downsizing could cost you between $59,200-$82,650.

If you live in a big city like Vancouver, $300,000 of equity could shrink to just $217,350* after considering these downsizing costs. However, these costs are not the only adverse effects of downsizing to consider.

*Based on $300,000 of equity minus $82,650 (the highest downsizing cost).

The Downsizing Dilemma 

Many Canadians underestimate the financial and emotional costs of downsizing, overlooking various aspects:

  • Home Improvements: Before selling, homes often need upgrades, from simple fixes to major renovations like kitchens or roofs. Also, many invest in staging their homes.
  • Belonging Decisions: Downsizing means deciding which possessions to keep due to space constraints, often leading to emotional challenges and storage expenses.
  • Leaving Family Homes: Leaving a home that carries so many joyful memories, especially if someone is widowed, can be challenging. Relocating might disconnect you from communities and loved ones.

An Alternative to Downsizing in Canada: The CHIP Reverse Mortgage 

The CHIP Reverse Mortgage by HomeEquity Bank can be the ideal alternative to downsizing. Unlock up to 55% of your home’s equity in tax-free cash while staying in your beloved home without leaving the neighbourhood you love. This money improves your retirement finances and can be used to renovate and retrofit the home for accessibility and livability as you age. With no required monthly mortgage payments, the CHIP Reverse Mortgage is becoming a popular solution.

If you have any questions or are curious about what would be best for you, don’t hesitate to contact us at 604-552-6190! Or you can CLICK HERE to book a call with Trish!

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!

604-552-6190

support@primexmortgages.com

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.

604-552-6190

support@primexmortgages.com

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.

Portability

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.

Re-Qualifying

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!

604-552-6190

support@primexmortgages.com

Trish & The Primex Team

The Difference Between Guarantors and Co-Signers

Home Tips Trish Pigott 19 Jul

Thank you to our partners at First National for a breakdown on the difference between the two.

  • What is the difference between a Guarantor and a Co-signer?
    • Guarantors are not on title to the property but will provide a guarantee to ensure the mortgage debt is being paid by signing the mortgage commitment and the mortgage charge as a guarantor. The guarantor should be able to contribute to servicing the mortgage debt if called upon.
    • Co-signers will be on title to the property and will provide a guarantee to ensure the mortgage debt is being paid by signing the mortgage commitment, the mortgage charge and any other documents that would normally be signed by a borrower on title to a property. The co-signer should be able to contribute to servicing the mortgage debt if called upon. Co-signers are normally required when the main applicants have poor credit and income.
  • Insured and Insurable Mortgages
    • Must be immediate family members – father, mother, child, brother, sister, grandparent, legal guardian or legal dependent, spouse or common law partner.
    • Does not need to occupy the property.
  • Conventional, Uninsurable Mortgages
    • Guarantor must be a spouse or common law partner.
    • Must be occupying the property.

These are general guidelines and there may be more to the borrower’s application. Each application is different and may be subject to further adjudication and conditions. At Primex, we will double check to make sure you qualify.

Have any questions or are looking for mortgage assistance? Contact us today at 604-552-6190 or email us at support@primexmortgages.com

CLICK HERE to book a quick call to review your mortgage!

Trish & The Primex Team 

What to know about Mortgage Renewal Time.

General Trish Pigott 14 Jun

Once there are about three months left in your mortgage term, your lender will send you a renewal letter. While most borrowers sign and send back their renewal without ever shopping around for a more favourable interest rate, this is the best time to check out your options.

Since your term is ending, it is perfect to shop the market or redo your mortgage without penalty! If you have wanted to change your lender, obtain a lower rate, extend your amortization or even change your mortgage from a fixed rate to a variable rate (or vice versa). At Primex Mortgages, we can help by shopping the market for you and finding the best product that suits your unique needs.

If you are considering switching lenders, you must inquire about any existing life insurance or other policies, as this could be affected if you change lenders. You should also be aware that NEW insurance could be more expensive as you are reapplying, and your circumstances (age, health) will have changed since your initial mortgage term and insurance plan was signed.

We can help answer all your refinancing questions and shop the market for a better rate! With access to over 90 lenders, we can quickly compare mortgage rates and products and help you switch! With over 20 years of experience, our team understands every mortgage is unique. We can help guide you in the right direction. Contact us to make your renewal a stress-free process.

Let us help! Contact us today at 604-552-6190 or support@primexmortgages.com.

You can also CLICK HERE to book a free mortgage review call!

Trish & The Primex Team

How to Gift a Down Payment

General Trish Pigott 31 May

Some of the most common strategies for families and parents to assist children with down payment funds are means of gifted funds or co-signing. The Canadian banking system is very conservative in this process. All banks have to follow the Anti-Money Laundering process in Canada, so here are a few ways to allow significant funds to be transferred to families to purchase a home.

Gifted funds – This is the most common way parents help children in today’s market. Parents are not on the mortgage or the title but can assist with gifting funds to children. The process is for a gift letter to be signed by children and the parents confirming the number of funds that are gifted, and this letter comes with your mortgage approval from whatever bank is the best fit. Then, fifteen business days before the completion of the purchase, the funds must be deposited into the child’s account. Gifted funds from parents can come from savings, investments, home equity line of credit or reverse mortgage.

Parents have two options for accessing funds from home equity:

  • The first option is to take a mortgage or home equity line of credit against your existing home, handled as a traditional mortgage process. Providing documentation for income, debts and assets, as well as home appraisal, is required for this process. A HELOC is tax-free, and the equity takeout would not be taxed.
  • The second option is a Reverse Mortgage. The Reverse Mortgage is the fastest growing product in Canada for those 55 and up as the rates are better than current HELOC rates with the banks, and no stress test applies. Often to get a HELOC, pensions only allow for a low limit due to the stress test, and you would also have to make monthly payments with a mortgage or HELOC. With a Reverse Mortgage, you can access up to 55% of your home equity, and no fees are required until you move out of the home. There is no income, assets or debt confirmation for this process; they base the approval on age and equity in the house. A home appraisal is required.

Co-Signing – This process is in place most commonly when parents do not have funds to assist with a gift. Parents then can come on to the mortgage application and on the title to the new property. The primary purpose of this is to assist with a qualification in today’s interest rate market, as the stress test makes it very difficult for young families to qualify in today’s real estate market. As co-signers, parents are on the mortgage and the title, requiring the same information as the primary borrowers, such as income and debts. There is no set time that parents can be on the mortgage and title. Still, the most common is for the first term of the mortgage. Then children would ideally release the parents from the mortgage and title once rates have come down. After that, the mortgage balance is less, making it easier to qualify on their own.

The Primex team can help figure out what is best for you with having access to over 90 mortgage lenders, it is easy to find a product that is right for you and your family. We also help with coordinating on your behalf. Confidentiality is key and I can assure that your personal and financial information is never shared across family members. You can CLICK HERE to book a call with Trish to start the process.

604-552-6190

Support@primexmortgages.com

Trish & The Primex team

 

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