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Welcome to our monthly Better Mortgage Select newsletter - this is our July 2024 edition.

 

Brought to you by Daniel Patton, Michael Zanzini, Lorenzo Podda, and our President, Dave Butler.


   

Before we get too far ahead of ourselves, let's put things into perspective. From March 2022 until July 2023, Canadians experienced a total of 4.75% in interest rate hikes from the Bank of Canada. Had the Bank of Canada increased rates 0.25% each time as per the norm, this would have been equivalent to 19 straight rate increases that Canadians felt over only a 16-month period.

 

With that out of the way, we can now celebrate the second Bank of Canada rate decrease of 0.25% in as many months. A subtle 'congrats' goes out to all variable rate mortgage holders—your interest rate has dropped again. This will be reflected either in a lower mortgage payment or in a reduced amortization period, meaning more of your mortgage payment will be going towards your principal balance. Either way, this is good news for those looking for some interest rate relief.

 

Regarding fixed rate mortgages, this Bank of Canada rate decrease was fairly priced in by the bond market (before today, the market was pricing in a 92% chance of a rate cut), so we don't expect any significant fixed rate decreases off this news right away. However, it bodes well for bond yields to continue their 3-month downtrend (for those tracking daily bond market charts), especially if we continue to see inflation come down accompanied by weak employment and GDP figures.


   
   
   
   

The short answer is 'yes'. We believe there will be at least one more rate cut of 0.25% in 2024, possibly even two rate cuts. Assuming this happens, the three interest rate hikes of 2023 (January, June, and July) will have been neutralized, with the Bank of Canada prime rate ending in 2024 between 6.20% and 6.45%. Most variable rate mortgage holders will experience an interest rate between 5.20% and 5.80% (depending on their discount to prime). This would bring us back to interest rates seen around the end of 2022 and set the direction of rates on a downward trajectory starting in 2025.

   
   

Aside from the three remaining Bank of Canada interest rate meetings this year, the most important dates and data are tied to inflation, employment, and GDP. If we continue to see inflation and GDP decline while unemployment rises, that is the quintessential recipe for the Bank of Canada to keep lowering interest rates. Here are some upcoming dates to keep an eye on for the month of August. The data from these three reports will be very important as we head into the next Bank of Canada meeting on September 4th:


   


For the last two decades, when a mortgage came up for maturity, it wasn't really considered a big deal. Your bank would offer you a rate, typically one, that would not change your mortgage payment very much. Maybe you haggled with the bank a little bit and got a slightly lower rate, then you signed the papers and did the same thing again five or so years later.


However, with an unprecedented 60%+ of all mortgages in Canada coming up for maturity in the next two and a half years (2024-2026), combined with banks and mortgage lenders appearing to play 'hard-ball', and with most people coming out of fixed rates that range from 2.29% to 3.79% and now having to deal with much higher interest rates, mortgage renewals have become a hot topic in our country.


In the coming weeks, we will be sending out a comprehensive guide on "How to Handle Your Upcoming Mortgage Renewal" that will focus on helping those with mortgages coming up for maturity between now and 2026. Keep your eyes peeled for what we believe will be a necessary tool that can help you save tens of thousands of dollars when your mortgage comes due.


   

That's right, tonight at 6:30 PM EST, our Better Mortgage Select team will be hosting a free webinar “Mid-Year Mortgage and Interest Rate Update”. If you, or someone you know would like to take part, here is the direct meeting link to join tonight’s webinar at 6:30PM:

   
   
   
   

This month our very own Daniel Patton had the pleasure of visiting the Rock Star Real Estate office and hosting a learning session along with Rockstar Coach, Mike Desormeaux.  For those that do not know Mike Desormeaux has a book out called "Wealth Won't Wait". Check it out!!



Also let's not forget, Rock Star founders Tom and Nick Karadza will be hosting their 'Your Life, Your Terms' event on October 5th.  This conference is always a 'must-attend' for any Real Estate Investors in the Southern Ontario area looking for guidance and information as it pertains to the new landscape of real estate investing in post-pandemic Canada.


   
     
   

Gary Hibbert and his crew at Smart Home Choice were busy this past month and Better Mortgage Select's Michael Zanzini and Lorenzo Podda were along for the ride.  From Property Tours, Information Sessions and a Summer Meet N' Greet, a lot of fun was had.  Its always great when we get to spend time with our referral partners and clients.


   
     
   

This past weekend, childhood sports rivals and now good friends and business contacts, Real Estate Agent Jared Gardner and our own Daniel Patton got together to do something cool and charitable by putting on some free hot air balloon rides for many to enjoy in Mississauga.  Jared set up the event and Better Mortgage Select was there to sponsor it and a great time was had by all.


   

For those that don't know, Jared Garder is a Scott McGillivray trusted realtor with ties to KeySpire Investment Club.  We would be remiss if we didn't mention that KeySpire will be holding their annual Investor Summit in Toronto from September 27th to 29th.  If you are in town and want to mingle with other like-minded Investors, give it a look!


   
     
   

Just a friendly reminder to come visit us on our socials, where we put out a ton of videos with tips and information to help you navigate the wild world of mortgages! Check out the links below and give us a follow!

   
   
   
     
   

As always, if you have any questions or want to do some mortgage planning, feel free to reach out to us at: