Monday Market Musings: Canadian Mortgage Outlook Amidst Global Shifts

Jamie Ushko • September 9, 2024

As we kick off another week, the financial markets seem deceptively calm. But with key economic data on the horizon, Canadian homeowners and prospective buyers should stay alert. Let's dive into the numbers and see how they might impact your mortgage.



Canada: Charting Its Own Course?

The Bank of Canada has cut rates three times since June 6th, 2024. Interestingly, our dollar has held steady:

  • Current CAD: 0.73681 USD
  • June 5th (pre-cuts): 0.7304 USD

Source: Trading Economics


This resilience suggests the BoC might continue its independent path, potentially leading to more rate cuts that could benefit variable-rate mortgage holders.


U.S. Inflation: A Key Indicator

Wednesday brings crucial U.S. inflation data:

  • Previous: 2.9%
  • Expected: 2.6%

Why it matters: Lower U.S. inflation could influence our mortgage rates. A positive report might signal continued downward pressure on Canadian rates.


Historical Perspective: Market Dips and Rate Cuts

Let's look at past crises and their impact:

  1. Dot Com Bubble (2000-2002):
  • US500 loss: 40%
  • Fed rate drop: 4.75%

  2. Financial Crisis (2007-2009):

  • US500 loss: 52%
  • Fed rate drop: 2.50%

  3. Pandemic (2020):

  • US500 loss: 35%
  • Fed rate drop: 1.50%

  4. Today (Aug 30 - Sept 6, 2024):

  • US500 loss: 4.35%
  • Fed rate change: None yet

Data source: Trading Economics


What this means for Canadian mortgages: If the U.S. holds steady due to minimal market pressure, it might slow the pace of rate cuts in Canada, potentially stabilizing mortgage rates in the short term.


Looking Ahead

Market predictions suggest a 67.5% chance of a 0.25% U.S. rate cut on September 18th, with a 32.5% chance of a 0.50% cut. Fed Governor Christopher Waller has even hinted at supporting a rate cut:

"Considering the achieved and continuing progress on inflation and moderation in the labor market, I believe the time has come to lower the target range for the federal funds rate at our upcoming meeting," Waller stated.

Source: CNBC


What This Means for Canadian Homeowners and Buyers

  1. Variable-rate mortgage holders might see more relief if the rate-cutting trend continues.
  2. Those looking to buy should stay ready – we could see more favorable rates in the coming months.
  3. Fixed-rate mortgage holders should consider talking to a mortgage professional about potential refinancing opportunities.


Remember, while current trends look positive for borrowers, it's crucial to stay informed and consider your unique financial situation. As always, I'm here to help you navigate these changes and find the best mortgage solution for your needs.


Stay tuned for updates as we navigate this eventful week in the financial markets!

Jamie Ushko

Mortgage Broker

Are You Ready To Buy A Home?

By Jamie Ushko • May 28, 2025
Buying your first home is a big deal. And while you may feel like you’re ready to take that step, here are 4 things that will prove it out. 1. You have at least 5% available for a downpayment. To buy your first home, you need to come up with at least 5% for a downpayment. From there, you’ll be expected to have roughly 1.5% of the purchase price set aside for closing costs. If you’ve saved your downpayment by accumulating your own funds, it means you have a positive cash flow which is a good thing. However, if you don’t quite have enough saved up on your own, but you have a family member who is willing to give you a gift to assist you, that works too. 2. You have established credit. Building a credit score takes some time. Before any lender considers you for mortgage financing, they want to see that you have an established history of repaying the money you’ve already borrowed. Typically two trade lines, for a period of two years, with a minimum amount of $2000, should work! Now, if you’ve had some credit issues in the past, it doesn’t mean you aren’t ready to be a homeowner. However, it might mean a little more planning is required! A co-signor can be considered here as well. 3. You have the income to make your mortgage payments. And then some. If you’re going to borrow money to buy a house, the lender wants to make sure that you have the ability to pay it back. Plus interest. The ideal situation is to have a permanent full-time position where you’re past probation. Now, if you rely on any inconsistent forms of income, having a two-year history is required. A good rule of thumb is to keep the costs of homeownership to under a third of your gross income, leaving you with two-thirds of your income to pay for your life. 4. You’ve discussed mortgage financing with a professional. Buying your first home can be quite a process. With all the information available online, it’s hard to know where to start. While you might feel ready, there are lots of steps to take; way more than can be outlined in a simple article like this one. So if you think you’re ready to buy your first home, the best place to start is with a preapproval! Let's discuss your financial situation, talk through your downpayment options, look at your credit score, assess your income and liabilities, and ultimately see what kind of mortgage you can qualify for to become a homeowner! Please connect anytime; it would be a pleasure to work with you!

Mortgage Financing For Home Renos

By Jamie Ushko • May 21, 2025
If you’re looking to do some home renovations but don’t have all the cash up front to pay for materials and contractors, here are a few ways to use mortgage financing to bring everything together. Existing Home Owners - Mortgage Refinance Probably the most straightforward solution, if you’re an existing homeowner, would be to access home equity through a mortgage refinance. Depending on the terms of your existing mortgage, a mid-term mortgage refinance might make good financial sense; there’s even a chance of lowering your overall cost of borrowing while adding the cost of the renovations to your mortgage. As your financial situation is unique, it never hurts to have the conversation, run the numbers, and look at your options. Let’s talk! If you're not in a huge rush, it might be worth waiting until your existing term is up for renewal. This is a great time to refinance as you won’t incur a penalty to break your existing mortgage. Now, regardless of when you refinance, mid-term or at renewal, you’re able to access up to 80% of the appraised value of your home, assuming you qualify for the increased mortgage amount. Home Equity Line of Credit Instead of talking with a bank about an unsecured line of credit, if you have significant home equity, a home equity line of credit (HELOC) could be a better option for you. An unsecured line of credit usually comes with a pretty high rate. In contrast, a HELOC uses your home as collateral, allowing the lender to give you considerably more favourable terms. There are several different ways to use a HELOC, so if you’d like to talk more about what this could look like for you, connect anytime! Buying a Property - Purchase Plus Improvements If you’re looking to purchase a property that could use some work, some lenders will allow you to add extra money to your mortgage to cover the cost of renovations. This is called a purchase plus improvements. The key thing to keep in mind is that the renovations must increase the value of the property. There is a process to follow and a lot of details to go over, but we can do this together. So if you’d like to discuss using your mortgage to cover the cost of renovating your home, please connect anytime!