As a mortgage broker who often and regularly advertises “The Best Rate”, “The Lowest Rate”, “The Greatest Rate” and even “The Best, Greatest, & Lowest Rate”, being asked what our best rate is can sometimes be maddening and a double-edged sword.

Allow me to explain.

One of our treasured and valued REALTOR partners referred a lovely couple to me last week who will purchase a new home in Winnipeg in the coming months.   We were introduced via e-mail.   I always send out our introductory e-mail with our process, explainer videos, FAQs,  contact information, and more.   The response was,

“We only want to know your BEST RATE?”

I kindly replied and explained that each client’s situation is unique and we need to understand their needs, goals, short and long-term plans, understand their financial picture, income, down payment, and many other factors.   I advised that even if I could provide them with the lowest rate without knowing anything about them or their application it may not be the best product for their unique needs.

The reply came?

“Can you tell us your lowest rate or not?”

Of course, I can.    Or can I?  I still don’t know anything about these clients.   A phone number wasn’t provided when requested, and I have to describe my best rate.   What do they want?  What do they need?  Short-term? Long-Term? Hybrid Mortgage? Home Equity Line Of Credit?  Are they risk-loving or risk-averse? 25-year amortization? Or Longer?

I reply with another invitation to meet via Zoom or have a telephone conversation.   I know that as a broker with access to dozens of lenders, we will 19/20 times get our clients the lowest and best rate for their situation.  I know that as a broker we will provide our clients with a longer-term strategy and plan for the future.   I know as a broker we will be able to explain and educate which product may work better for them, whether it be a mortgage HELOC or Hybrid mortgage.

I include in my e-mail some recent successes.  A 4.89% 5-year fixed cottage purchase.  A refinance at 5.49% 25-year amortization.  A Hybrid Mortgage with a HELOC and 2-Fixed Rate portions a 3-year term and a 5-year term.  I go on to explain how a short-term fixed strategy may not work out due to the high premiums of short-term rates at the moment.   I share predictions of rate decreases on the 6-18-month horizon and how this could affect their mortgage.  I even try to explain how getting an insured mortgage rate and paying the default mortgage insurance can help them save money in the long & short terms (when they renew in terms 2 & 3).

I’m hoping that I was able to show them and pique their interest that they need individual and tailored advice.   I can sense that they have a rate from their BANK and are shopping it around.  I understand this as I am a person who loves a deal and to save money.  However, sometimes opting for the lowest rate, the promotional rate, or the bank’s discounted rate can cost tens of thousands of dollars in unnecessary interest and/or fees.

When asking your mortgage professional, bank, or credit union the question “What Is Your Best Mortgage Rate?”, we recommend that you change the wording just a little and ask “What Is The Best Mortgage Rate For Me?  We guarantee that if you find a home financing product that suits your individual and long-term needs you will be far better off in the long-run!

We would love to help you with your next mortgage!

Over half of the mortgages in Canada will be renewed in the next few years.  There will be sticker shock for many Canadian families who will be renewing into rates 1%-3% higher than their current mortgage.   This will result in higher mortgage payments for almost anyone.

While we will keep hoping that the Bank Of Canada will start reducing rates sooner rather than later, we will keep hoping that bond yields will keep shrinking, resulting in lower fixed-rate mortgages.

How can we prepare for higher rates?

1.  Know your numbers – Prepare your household budget and understand all of your income, payments, and cash flow.
2. Determine if it may be wise to tap into any existing home equity to lower payments or consolidate debt.
3. Identify expenses that can be eliminated or reduced (daily coffee, unused subscriptions, etc).
4. Don’t sign your lender’s first renewal offer without getting a 2nd opinion from us.
5.  Don’t panic, we can help!

At DLC Mainstream Mortgages, we will consider your whole financial picture before offering advice.  We may be able to transfer/switch your existing mortgage for a better rate, refinance all of your existing debt into one easy payment, and present alternative product options such as hybrid mortgages that will help you pay your mortgage off faster!

A fresh start begins with contacting us today!

The festive season is behind us, and the New Year is in full swing! As we pack away the decorations and bid farewell to the holiday cheer, many of us are left with the lingering effects of the Christmas and New Year debt hangover. If you’re feeling the pinch of holiday expenses fret not – there’s a solution that could bring relief and set you on a path to financial wellness: mortgage refinancing.

Understanding the Debt Hangover:

The joy of the holidays often comes with a price tag. From gifts and gatherings to travel and indulgences, it’s easy for expenses to add up. As the bills roll in, it’s natural to wonder how to manage the financial aftermath without sacrificing your goals.

Enter Mortgage Refinancing:

This is where mortgage refinancing steps in as your financial superhero. Whether you’re looking to consolidate debt, lower monthly payments, or take advantage of lower interest rates, mortgage refinancing could be the key to alleviating the post-holiday financial stress.

Why Consider Mortgage Refinancing:

1. Consolidate Debt: Roll high-interest credit card debt into your mortgage for a lower overall interest rate
2. Lower Monthly Payments: Secure a lower interest rate to reduce monthly mortgage payments and have one easy monthly payment.
3. Access Home Equity: Unlock the equity in your home for major expenses like home improvements, education, or debt consolidation.
4. Fixed vs. Variable vs. Adjustable Rates Vs. HELOC/HYBRID: Explore options that align with your financial goals, whether the stability of a fixed rate or the flexibility of an adjustable rate.

Book Your Appointment:

The first step in finding out if mortgage refinancing is right for you is to book an appointment with us. We’ll review your financial situation, discuss your goals, and provide personalized advice to help you make informed decisions.

Don’t let the Christmas and New Year debt hangover weigh you down. Take control of your finances and start the year with a plan that works for you. Contact us today to schedule your appointment and embark on the journey to financial freedom!

#NewYearNewFinancialGoals #MortgageRefinancing #FinancialWellness

Enough about mortgages!  Time to have some fun with our top 10-holiday jokes!

1. What do you call a snowman with a six-pack? An abdominal snowman! ❄️🏋️‍♂️
2. Why did the gingerbread man go to the doctor? Because he was feeling crumbly! 🍪😄
3. What do you get if you cross a snowman and a dog? Frostbite! 🐾❄️
4. Why did the Christmas cookie go to therapy? It was feeling a little crumby about itself! 🍪🛋️
5. What do snowmen eat for breakfast? Frosted flakes! 🥄❄️
6. How does a snowman get around? By riding an “icicle”! ❄️🚲
7. Why did Santa take music lessons? Because he wanted to improve his “wrap” skills! 🎁🎶
8. What do you get when you cross a snowman and a vampire? Frostbite! ❄️🧛‍♂️
9. Why was the snowman looking through the carrots? He was picking his nose! ❄️🥕😄
10. Why did the Christmas tree go to the barber? It needed a trim! 🌲✂️

Feel free to share these jokes with family and friends for some holiday laughter! 🌟😄

If you do have any mortgage questions, please contact us!

Before I even begin this article and the math and calculations, I believe in making a choice that you feel is in your best interest.  In our opinion taking a shorter-term rate is a HUGE gamble!  You are taking a big risk that rate will be low enough at the end of the term you choose to make up the large premium you paid in unnecessary interest.

We are going to use the same scenario for 4 different calculations.  We are going to be renewing a $300,000 mortgage for a client who expressed interest in a 2-year fixed, 3-year fixed, 5-year fixed, and a 5-year closed variable.

Mortgage Amount: $300,000.00
Transaction Type: Renewal/Switch/Transfer
Existing Rate: 3.69%
Existing Term: 5-year Fixed Insured
Renewal Date: January 30, 2024
Existing Payment: $1,528/month
Remaining Amortization: 20 Years.
Mortgage Insurer:  Sagen

Scenario One: 2-year Fixed Insured
Mortgage Rate: 6.09%
Remaining Amortization: 20 years.
New Payment: $2,152/month
Total Interest 24months: $35,154
Total Principal 24 months: $16,487
Remaining Amortization End Of Term: 15 years
Remaining Mortgage Balance: $283,513

Scenario Two: 3-Year Fixed Insured
Mortgage Rate: 5.44%
Remaining Amortization: 20 years.
New Payment: $2,043/month
Total Interest 36months: $46,338
Total Principal 36 months: $27,220
Remaining Amortization End Of Term: 15 years
Remaining Mortgage Balance: $272,780

Scenario 3: 5-Year variable Closed Insured
Mortgage Rate: 6.15%
Remaining Amortization: 20 years.
New Payment: $2.162/month
Total Interest 60 months: $84,717
Total Principal 60 months: $44,997
Remaining Amortization End Of Term: 15 years
Remaining Mortgage Balance: $255,003

Scenario 4: 5-Year Fixed Insured
Mortgage Rate: 4.99%
Remaining Amortization: 20 years.
New Payment: $1,970/month
Total Interest 60months: $68,277
Total Principal 60 months: $49,909
Remaining Amortization End Of Term: 15 years
Remaining Mortgage Balance: $250,091

Here are the above scenarios in a handy spreadsheet

But wait!  This isn’t an apples-to-apples comparison.  How will a borrower know what will put them the furthest ahead in the long run?  While no one has a crystal ball to make these predictions accurately, there are somethings that are often overlooked in the mortgage industry, which are PRIVILEGE PAYMENTS!

Instead of paying unnecessary interest rate premiums, what happens when you take a 5-year fixed and add the savings directly to your principal payments?  Magic Happens!

You will probably come out ahead if you take a 5 year fixed and apply the difference in payment directly to you principal.  You will pay LESS interest and MORE principal and reduce your overall mortgage amortization.

2-Year Vs. 5-Year
Interest Savings over 2 Years: $6,594.00
Extra Principal Paid: $6,596.00
Amortization reduced: 2 Years 6 Months
Rate to break even after 2 years under 4%.

3-Year Vs. 5-Year
Interest Savings Over 3 years: $4,084
Extra Principal Paid: $4,065
Amortization reduced 1 Year 2 mos.
Rate to Break Even after 3-year term is around 4%.

5Year Variable Vs 5-Year Fixed
Interest Savings over 5 Years: $17,957
Extra Principal Paid: $17,949
Amortization Reduced 2 Years 9 Mos.

To be fair, we can’t predict what variable rates will do and will likely be a safer bet than taking high premium short-term fixed rates.

The math will probably work out better taking the best 5-year fixed and paying extra!

Contact us to help you with your next mortgage!

‘Tis the season of joy, giving, and gratitude. During the holiday hustle, let’s take a moment to consider the true essence of the season – meaningful connections and thoughtful gestures. This blog post aims to inspire a shift towards mindful gift-giving, focusing on secondhand and heirloom treasures, handmade delights, consumable pleasures, experiential wonders, and the charm of supporting small businesses. Let’s celebrate the holidays without breaking the bank and embrace the beauty of simplicity.

Secondhand & Heirloom Treasures

Secondhand treasures offer a unique charm. Explore local thrift stores, vintage markets, or online for hidden gems that tell stories of a time gone by. Share a personal experience of finding a special secondhand item and how it became a cherished gift. It took me many years of being an adult to treasure and cherish items passed down from my grandparents and family.  These gifts are some of my favourites I have today.

Handmade with Love

The art of handmade gifts is a testament to the thought and effort invested in each gift. Whether you’re crafty yourself or supporting local artisans, handmade gifts carry a personal touch that mass-produced items lack. Share a DIY gift idea or spotlight a local artist whose work aligns with the holiday spirit.  Having purchased many books, and machines to hand-make cards, engravings, and more.  It’s very time-consuming and a labour of love.  I love it when someone takes the time to make something for me.

Consumable Delights

Gifts that can be savored and enjoyed without adding to clutter are a win-win. Consider gourmet treats, specialty beverages, or homemade goodies that tantalize the taste buds. Discuss the appeal of consumable gifts and how they align with a more sustainable approach to holiday giving.

Experiences Over Possessions

Experiences create lasting memories that far outlive material possessions.  Whether it’s concert tickets, spa vouchers, or a weekend getaway,  the value of shared experiences can cement lasting relationships.  I love this to help support local businesses that are service, rather than sales-based.

Supporting Small Businesses

Highlight the charm of local shops and small businesses, where each purchase supports a dream. Share in the success of entrepreneurs who have created unique holiday offerings. Check out your neighborhood and seek out the vibrant world of small businesses for one-of-a-kind gifts.

The Pitfalls of Overspending

Overspending during the holidays or any time of year can feel exhilarating!  However, when the credit card bills start coming in, it can feel like the worst hangover.   Credit card interest is higher than ever, 12%, 19.99%, 28%.  It’s just not worth it.  It can jeopardize your credit rating and even prevent you from purchasing a home in 2024

Conclusion

As we navigate the holiday season, let’s prioritize meaningful connections over material possessions. Mindful gift-giving not only benefits the recipient but also contributes to a more sustainable and joyous celebration. Please share your experiences with us, and let’s create a community that values the spirit of giving over the price tag.

Closing Thoughts

May your holiday season be filled with warmth, love, and the joy of giving. Thank you for considering the beauty of mindful gift-giving, and here’s to a season that truly celebrates the heartwarming connection between us all.

Happy holidays from DLC Mainstream Mortgages!

You will often hear me say that mortgages aren’t only about rates.  Finding the best solutions to fit your needs is 10x more important.  This is 100% TRUE.

However, this all goes out the window in a decreasing interest rate environment.  We are currently in a decreasing mortgage rate environment.

5-year Canadian Bond Yields have dropped substantially in the past few weeks which is good news for mortgage borrowers.   Rates are starting to come down across the board!  There are two reasons for this, firstly lower bond yields, and secondly lenders need to get through the seasonally slower winter period and rate specials are usually the way they accomplish this.

If you have an approved mortgage and it’s closing a minimum of 10 business days from the time you’re reading this, call your broker/bank/credit union to see if they can offer you a lower rate.  They should be able to accommodate this request.

If you have an approved mortgage that is closing after January 2, 2024, contact us for a second opinion!  This call /text/e-mail may save you thousands of dollars, even tens of thousands of dollars depending upon the size of your mortgage!

We will provide fast, efficient, and honest advice!

Contact Us Today!

This question came in through one of our social media platforms: “I’ve never used a mortgage broker before.  How much can I really save?

Benjamin Franklin wisely said to “worry about the pennies and the dollars will take care of themselves.”

Each client and situation is unique, however, we can break down the savings for this particular client’s situation.

Current Mortgage:  At a Big-5 Bank
Mortgage Amount: $403,128.00 at renewal.
Clients have excellent credit and outstanding job tenure and income.
20 years are remaining on their mortgage amortization.
They bought their home with a 10% down payment and the mortgage is default-insured at Sagen Canada.
Their Big-5 bank has offered them a renewal of 5.89% for a 5-year fixed rate and higher rate shorter-term options (I’m not a big fan of this strategy at the moment which will be a topic for another day)

Let’s calculate the numbers:  We can offer them a 5-year Fixed Rate mortgage at 4.99% for a 5-year fixed rate.

This client would save:
$199.00 per month on their payment
$17,123.00 in unnecessary interest
$5,163.00 in additional principal would be paid

It’s a spread of $22,286.00!

And since our our lenders offer a 20% payment privilege meaning the payment can be increased by up to 20%, these clients elect to increase their payment by $199/month to pay EVEN MORE PRINCIPAL AND SAVE MORE INTEREST!

This means that the clients will both SAVE AND PAY MORE!  They will pay a total of:
$90,175.00 in interest
$80,577.00 in principal
and reduce their amortization to 17 Years and 9 months

IT PAYTS TO GET A SECOND OPINION!

Contact us today!!!