5 Questions to Ask Your Mortgage Broker in Canada
General Danny Cardoso 10 Oct
General
Still Waiting for 1% Mortgage Rates? Here’s Why They’re Gone for Good
General Danny Cardoso 29 Sep
What’s Changed Since the Pandemic?
Remember those record-low mortgage rates in 2020 and 2021? Some of us locked in 5-year fixed terms under 2%. But if you’ve been waiting for those deals to come back, it might be time to adjust expectations.
Ultra-low interest rates were a response to a global emergency. Central banks, including the Bank of Canada, slashed rates to near zero to keep the economy afloat during COVID-19 lockdowns. Now that the economy has stabilized and inflation is no longer transitory, those emergency measures have ended.
Why Rates Aren’t Expected to Drop That Low Again
According to the latest insights from Canadian Mortgage Trends and other economists, there are a few major reasons we’re unlikely to see sub-2% mortgage rates return:
- Persistent Inflation Pressures: Even with inflation cooling off, it’s still above the Bank of Canada’s 2% target.
Global Economic Shifts: Higher oil prices, supply chain realignments, and geopolitical tensions all contribute to a more expensive world.
Strong Employment Numbers: Canada’s job market remains resilient, which gives the Bank of Canada little incentive to aggressively cut rates.
Government Spending: Fiscal policies like housing initiatives and infrastructure spending add upward pressure to inflation, keeping rates higher longer.
So, What Does This Mean for Canadian Homeowners?
If you’re renewing your mortgage, shopping for your first home, or exploring investment properties, here’s how you can respond to this new normal:
- Adjust Budget Expectations: Plan for mortgage rates in the 4–6% range for the foreseeable future.
- Work With a Broker: Mortgage brokers have access to a wider range of lenders and flexible solutions—especially valuable now.
- Look at Shorter Terms or Variable Options: If you believe rates will come down slowly, you may not want to lock intoa long-term fixed rate.
- Get Pre-Approved Now: Locking in today’s rate can protect you from potential hikes, especially as fall approaches.
What If You Bought at Low Rates in 2020?
If you’re facing renewal in 2025 or 2026, your payment could increase significantly. That’s where a strategy comes in. Consider these steps:
- Reassess your budget today, don’t wait until renewal.
- Consider refinancing to a longer amortization for lower payments.
- Talk to a broker about switching lenders if your current offer isn’t competitive.
Bottom Line
Ultra-low rates served a purpose during the pandemic, but they weren’t built to last. Today’s rate environment is more in line with historical norms, and likely here to stay. The good news? There are still smart ways to borrow, invest, and grow your real estate portfolio.
Need help navigating your mortgage in a higher-rate market?
Let’s talk strategy. Whether you’re renewing, refinancing, or buying for the first time, I’m here to help you find the right solution.
📞 Call me at 416-882-4172
📧 Email: mortgages@dannycardoso.ca
How Bond Yields and Bank of Canada Policy Rates Drive Mortgage Rates: What to Expect Through 2026
General Danny Cardoso 22 Sep
How Bond Yields and Bank of Canada Policy Rates Drive Mortgage Rates: What to Expect Through 2026
As your mortgage broker, I believe one of the most important conversations we can have is around why mortgage rates move, what is driving them now, and what might happen over the next year. Below I explain how bond yields and Bank of Canada (BoC) decisions influence what you pay. Then I walk through where things look to be headed through the remainder of 2026, with risks you should watch.
The Mechanics: Bond Yields, BoC Policy Rate, and Mortgage Rates
Government Bond Yields
- The yield on government bonds (especially the 5-year Government of Canada bond) is a key benchmark for fixed-rate mortgages. Lenders see these yields as the starting cost of funds for a fixed-period mortgage, then add spreads (for credit risk, liquidity, operations, profit) to that base.
- When bond yields rise, particularly on mid-term durations (3-5 years), you can expect fixed mortgage rates to follow. If yields drop, fixed rates tend to soften, all else equal.
Bank of Canada Policy / Overnight Rate
- The BoC’s overnight policy rate (often called the target for the overnight rate) is what banks use in lending to each other. It influences prime, which in turn influences variable-rate mortgages, home equity lines of credit (HELOCs), adjustable mortgages, etc.
- BoC uses its rate policy as its main tool to control inflation and influence economic activity: higher rates slow borrowing and spending; lower rates encourage activity when inflation is under control. Because variable mortgage rates are tied more directly to prime, they respond more immediately to BoC moves than fixed rates do.
The Spread: Why Mortgage Rates > Bond Yields
- Fixed mortgage rates are always higher than comparable bond yields because of added risk and cost: default risk, administrative costs, pre-payment risk (if people pay off or refinance early), liquidity risk, profitability. The “spread” between bond yields and fixed mortgage rates is an important metric—and sometimes lenders widen this spread when markets are volatile or risk is perceived to be high.
Other Influences
- Inflation expectations, global economic conditions (interest rates elsewhere, supply‐and‐demand for bond issuance), fiscal policy, and debt‐issuance by government all feed into both bond yields and BoC decisions.
- Mortgage lenders also compete; so market competition will push rates lower if bond yields stay steady or fall. Conversely, if yields are rising and lenders anticipate that risk, they may pre-emptively raise fixed rates.
Where Things Stand Now (As of Late 2025)
To give you the latest snapshot:
- The Bank of Canada’s policy (overnight) rate is 2.75%, following several cuts since mid-2024. The Bank has paused after those cuts.
- The 5-year Government of Canada bond yield is about 2.80-2.90% (recent days’ data placing it near ~2.87%) depending on exact benchmark and pricing.
What this means practically:
- Variable/adjustable mortgages and HELOCs are benefitting (or will benefit) more directly, sooner, from BoC rate cuts (if they occur), since their rates adjust with prime or other short-term benchmarks.
- Fixed mortgage rates reflect what bond yields have already done (or are expected to do), but with some lag—and with spread adjustments depending on lenders’ perceptions of risk and competition.
Forecast for 2026: What to Expect for Mortgage Rates
While nobody can predict with certainty, here is an informed view based on current trends, analyst surveys, and risk factors.
| Timeframe | Bank of Canada Policy Rate | Bond Yields (especially 5-year) | Fixed Mortgage Rates (5-year) | Variable Rates & Other Mortgage Types |
| Early 2026 (Q1–Q2) | Moderate likelihood of rate cuts, possibly another cut of 25 basis points (from 2.75% to ~2.50%) if inflation continues to settle and there is economic slack. | Yields may drift lower if economic data weakens slightly, but could also remain sticky if global interest rates or inflation expectations stay elevated. Perhaps 5-year yields in the ~2.5%-2.8% range. | Fixed 5-year rates likely to edge downward from current levels but may not drop dramatically—expect something in the ~4.0%-4.5% range for many lenders, depending on spread. | Variable rates will likely respond more quickly to BoC cuts, and borrowers standing with variable or adjustable mortgages may see more relief sooner. |
| Mid to Late 2026 (Q3–Q4) | Depending how inflation, housing markets, and global economics evolve, BoC may hold, or possibly cut further—but risk of overshooting remains. | If inflation remains under control and bond markets are confident, yields could stabilize or drift a bit lower. However, if global pressures (e.g. supply shocks, fiscal deficits, trade issues) reemerge, yields could rise again. | Fixed rates might settle lower, perhaps into the ~3.8%-4.2% territory for strong borrowers or special offers; but many borrowers may face spreads that keep rates higher. | Variable rate borrowers likely to enjoy lower costs than fixed in favorable scenarios; but they also face more uncertainty if policy sentiment shifts or if prime spreads move. |
Risks and Key Unknowns to Watch
- Inflation surprises: If inflation stays above target (or rebounds due to global energy, supply chain, or other pressures), bond yields could spike, prompting the BoC to pause cuts or even raise.
- Global interest rate environment: U.S. Federal Reserve, European Central Bank and others will influence bond markets. If rates abroad are high, investors may demand higher yields in Canada to keep up.
- Government debt issuance & fiscal policy: Large deficits and heavy borrowing increase supply of bonds, influencing yields upward.
- Housing market strength and renewals: A lot of mortgages are up for renewal in the next couple of years for people who took them when rates were very low. When those renewals come, borrowers will feel effects of higher rates. That in turn can affect consumer spending and broader economic growth—and may shape BoC policy.
What This Means for You (Mortgage Planning Advice)
Given all of the above, here are some strategies and considerations:
- If you have a fixed-rate mortgage or plan to lock in a fixed rate, now might be a time to consider locking in if you believe bond yields are near a peak, or if you want certainty ahead of possible renewals.
- If you have a variable rate mortgage or HELOC, and you are comfortable with some level of risk, you may benefit if BoC cuts but keep an eye on inflation signs (which could delay cuts).
- For renewals, it’s important to start discussions early. The spread between what your current rate is and what you might be offered can be significant, especially in volatile times.
- Shop around: Different lenders (banks vs. monoline lenders) have different cost structures and spreads. Sometimes non-bank lenders can offer slightly more aggressive fixed-rate spreads, though they may come with trade-offs (e.g. less flexibility, fewer product features).
- Monitor bond yields and BoC statements: Data like inflation, employment, and global risks (trade, commodity prices) will give signals before rate announcements occur.
Bottom Line Prediction through End of 2026
Putting everything together, my best estimate for mortgage rates (for a typical, well-qualified borrower) by year-end 2026 is:
- 5-year fixed mortgage rates in the ~3.8%-4.2% range under favorable conditions; more likely around 4.0%-4.5% if bond yields remain somewhat elevated or spreads widen.
- Variable or adjustable mortgages are likely to be lower than fixed in many scenarios, especially after BoC begins or continues rate cuts; but variable rates will likely remain above the overnight BoC rate plus prime spreads.
If you have any questions about what this means for your situation (purchase, renewal, refinance, etc.), I’m happy to walk through different scenarios. Understanding the levers helps make better decisions.
Best regards,
Danny Cardoso
Is Your Mortgage Pre-Approval Actually Useless? Here’s Why It Might Be
General Danny Cardoso 24 Jun
Is Your Mortgage Pre-Approval Actually Useless? Here’s Why It Might Be
A Rate Hold Isn’t a Guarantee—And That Could Cost You the Home
Getting pre-approved for a mortgage should feel like progress. It’s exciting, empowering, and often the first concrete step toward buying a home. But here’s the hard truth: if your mortgage pre-approval wasn’t put together properly—or if your broker or banker skipped key steps—it could be virtually worthless when you need it most.
Let’s break down what a pre-approval really means, what a rate hold does (and doesn’t) do, and why experience matters more than ever in a fast-paced, competitive real estate market.
What Is a Mortgage Pre-Approval Really?
A mortgage pre-approval generally includes two things:
- A conditional approval based on the numbers provided by your broker or banker.
- A rate hold that locks in an interest rate (typically for 90–120 days), giving you time to shop with peace of mind.
But here’s the issue: most lenders don’t actually do a full review of your application until it becomes “live”—that is, until you’ve written an offer that’s been accepted. Before that, they’re mostly relying on the information submitted by your broker or banker, not what they’ve verified themselves.
The Danger of a Sloppy Pre-Approval
Because lenders are only reviewing estimated numbers initially, a pre-approval is always conditional. If anything doesn’t add up when they finally double-check it, you could lose your approval—and possibly your home.
Here are some common issues that can derail things during a live file review:
- Your income was calculated incorrectly (especially for variable or self-employed income)
- There’s undisclosed debt (like student loans, car leases, or co-signed obligations)
- Your down payment source wasn’t verified properly
- Something as simple as a missed document throws off the whole deal
This is why it’s so critical to work with an experienced broker who knows how to present your file correctly the first time.
⚠️ Pro tip: If your broker or banker didn’t ask for full income documents, verify your credit, and analyze your debt load, you don’t have a real pre-approval—you have a placeholder.
Rate Holds: What They Do and What They Don’t
Rate holds are helpful, no question. They give you a buffer against rising rates while you search for the right property. But even if you’re holding a great rate, that doesn’t guarantee your mortgage will go through when it counts.
Lenders only commit to financing once they’ve verified everything. And even then, there’s another major piece of the puzzle…
Your House Has to Qualify, Too
This surprises a lot of buyers: just because you are approved, doesn’t mean the home is. Lenders always assess the property you’re buying, because they’re investing in it with you. If something about the home makes them uncomfortable—like:
- A poor inspection
- A property in a high-risk location
- Structural or zoning issues
- A condo building with known financial concerns
…they can walk away. This doesn’t mean your homeownership journey is over—but it does mean you need someone in your corner who can help pivot to another lender or solution quickly.
Why Experience Matters More Than Ever
A pre-approval is only as good as the person behind it. An experienced mortgage broker will:
- Fully underwrite your file upfront
- Spot issues before the lender does
- Explain what could cause problems down the line
- Prepare you for the reality of lender and property review
This extra care can be the difference between closing confidently and scrambling under pressure.
Final Thoughts: Ask the Right Questions Before You Rely on That Pre-Approval
Before you start house hunting, ask your mortgage expert:
- Was my income fully reviewed and verified?
- Did you check my credit?
- Have you reviewed all debts and liabilities?
- Is my file ready to go live?
If the answers are vague or rushed, it might be time for a second opinion.
Have questions about how strong your pre-approval really is? Let’s talk.
Call me at (416)-882-4172 or email mortgages@dannycardoso.ca to make sure your mortgage strategy is solid from day one.
Is a No-Payment Mortgage the Right Choice for You?
General Danny Cardoso 16 Jun
Many homeowners think the only way to access their home equity is by selling or taking on a mortgage with monthly payments. But what if you could access funds without making a payment?
No-payment mortgage options—like reverse mortgages, alternative lender loans, and private mortgages—allow homeowners to borrow against their property without immediate repayment. Instead, interest is added to the loan balance and paid later when the home is sold or refinanced.
These solutions aren’t just for seniors. Homeowners of all ages have used no-payment mortgage options to:
- Build a new home – Private lenders often allow interest to accrue during construction.
- Take a mortgage break – Families may use these loans for a year off to travel, have a baby, or start a business.
- Cover short-term expenses – A temporary financial cushion without immediate repayment.
Whether you’re looking for long-term financial stability or a short-term funding solution, let’s explore how this type of mortgage might work for you.
Why Home Equity Growth Offsets Interest Costs
A common concern with no-payment mortgages is that interest accumulates over time, potentially reducing home equity. But what many don’t realize is that real estate values have historically increased at a rate similar to, or even higher than, mortgage interest rates
The key takeaway? If your home appreciates at the same rate as the interest accrues, the impact on your equity is minimal. In some cases, appreciation even outpaces borrowing costs, leaving you with more home equity despite taking out a loan.
A Real Example from a Canadian Homeowner
“I was hesitant about taking out a no-payment mortgage while I was building my new home, but it made a huge difference. It gave me the flexibility to finance construction without adding financial stress. By the time I was ready to refinance, my property had already appreciated, so I wasn’t losing equity at all.” – Michael S., 42, Calgary
Why Selling Too Early Can Be Costly
Many homeowners assume selling is the only way to free up equity, but that can come at a cost:
1. You Could Miss Out on Future Appreciation
If you sell too soon, you risk losing out on significant future home value growth. Many homeowners who sold 5–10 years ago now regret their decision, as property values have increased dramatically in most Canadian markets.
For example:
- The average Canadian home price has doubled since 2013.
- Even in slower markets, home prices tend to trend upward over time.
- If you wait just five more years, your home could appreciate significantly, adding tens or hundreds of thousands of dollars in value
2. You Might Be Giving Up an Asset for Your Kids
Many Canadian homeowners want to leave their house to their children, but selling early eliminates that possibility. A no-payment mortgage allows you to access home equity now while still holding onto the property.
3. Moving Too Soon Can Disrupt Your Lifestyle
Selling a home means:
- Relocating before it’s necessary
- Leaving a neighbourhood you love
- Paying real estate commissions and moving costs
A no-payment mortgage can help bridge financial gaps without forcing a move.
Long-Term Care: A Growing Concern for Seniors
For older Canadians, the rising cost of long-term care is a major financial worry:
- 70% of seniors will require some form of long-term care.
- The average cost of a private long-term care home is $3,000–$5,000 per month.
- In-home care services range from $20–$40 per hour, quickly adding up.
Many seniors sell their homes too soon to cover these expenses, when they could have stayed in their home longer by using a no-payment mortgage.
Example:
- A homeowner who took out a reverse mortgage in 2015 for $200,000 saw their home value increase by $300,000 over that period.
- The reverse mortgage allowed them to cover in-home care costs while still leaving a substantial asset for their family.
Who Can Benefit from a No-Payment Mortgage?
No-payment mortgages aren’t a one-size-fits-all solution, but they work well for many situations:
✔️ Seniors 55+ who want to stay in their home but need financial flexibility.
✔️ Homeowners building a home who need financing but want to delay payments.
✔️ New families who want a mortgage break while adjusting to parenthood.
✔️ Entrepreneurs who need financial breathing room to launch a business.
✔️ Anyone who can’t qualify for a HELOC or traditional mortgage due to income or credit.
FAQs About No-Payment Mortgages
Do I still own my home?
Yes! A no-payment mortgage doesn’t transfer ownership—you remain the homeowner, just like with any other mortgage.
What happens if home prices drop?
Most reverse mortgages and alternative lender loans come with a no-negative-equity guarantee, meaning you’ll never owe more than your home is worth. Lenders in Canada are conservative and don’t allow borrowing near the full home value.
Can I still leave my home to my children?
Yes. Since home values tend to increase over time, many homeowners still have equity left over after repaying the loan.
Is a reverse mortgage my only option?
No! If you qualify for a traditional mortgage or a HELOC, those can sometimes be cheaper alternatives. A no-payment mortgage is best for those who can’t qualify for traditional financing but still want to stay in their home or access their equity.
Can I use this for home renovations?
Absolutely. Many homeowners use no-payment mortgages to update their home, add accessibility features, or increase property value before selling.
What’s the difference between a reverse mortgage and a private lender loan?
- Reverse mortgages are for homeowners 55+ and offer a long-term solution with no payments.
Private lender loans can be used by any homeowner with enough equity, often for short-term financing like home construction or a temporary mortgage break.
How do I know if this is right for me?
Every situation is unique. If you’re considering a no-payment mortgage, I can walk you through your options side by side to help you make the best decision.
You Missed the Best Time to Buy—But the Next Opportunity Is Coming
General Danny Cardoso 3 Mar
Looking back, 2020 was an ideal time to buy a home. Prices were lower, and mortgage rates were around 3%. Those who entered the market then have seen significant gains, with home prices rising more than 30% since early 2020.
But if you didn’t buy, does that mean you’ve missed your chance? Not at all. Real estate always increases in value over the long term, but the key is recognizing opportunities when they appear.
And the next opportunity may be just around the corner.
The Market Has Moved—And a Shift Is Coming
Here’s how Canadian home prices have changed since 2020:
Prices increased dramatically from 2020 to 2022, followed by a dip in 2023. However, the market has already started recovering, and the Canadian Real Estate Association (CREA) forecasts home prices will rise another 3.3% by 2026.
Why 2025 Could Be a Unique Buying Opportunity
Many of the buyers who secured homes at historic low interest rates in 2020 and 2021 will soon be facing mortgage renewals at rates that are double or even triple what they originally paid.
This could result in:
- More homes hitting the market – Some homeowners will no longer be able to carry their mortgages at the new rates and will need to sell.
- Investment properties being offloaded – Many investors purchased rental properties when borrowing was cheap. If these properties no longer generate positive cash flow, some investors may look to sell.
- Greater selection for buyers – More listings in the market could create opportunities for those who have been waiting to enter.
Barbara Corcoran (@barbaracorcoran) has seen these cycles play out before. Her advice remains clear:
“Don’t wait to buy real estate. Buy real estate and wait.”
Interest Rates Fluctuate—Real Estate Always Moves Up
Interest rates have been a key factor in buyer hesitation. But history shows that:
- Rates are already lower than their peak. After reaching nearly 6% in late 2023, they have declined to around 4.5% today depending on the lender and mortgage type.
- When rates drop, prices rise. As borrowing becomes more affordable, more buyers enter the market, increasing demand and pushing prices higher.
- Long-term trends show real estate always appreciates. Even after temporary dips, home values recover and surpass previous highs.
“The perfect time to buy a house? When you can afford the down payment—not when you’re waiting for the ‘perfect’ market.” — Barbara Corcoran
Where Will the Best Buying Opportunities Be?
For those who missed the low rates of 2020-2021, 2025 could bring new opportunities, including:
- Distressed Sales – Some homeowners renewing at much higher rates may list their homes out of necessity, creating potential buying opportunities.
- Investment Properties for Sale – Properties that no longer generate strong cash flow may be offloaded by investors who purchased during the low-rate environment.
- Suburban and Secondary Markets – With affordability stretched in major cities, smaller markets may see increased inventory and softer pricing.
Play the Long Game—Not the Waiting Game
Real estate is a long-term investment, and those who enter the market sooner rather than later tend to benefit the most.
- Equity Growth – The longer you own, the more your home appreciates and builds wealth.
- Market Stability – While short-term fluctuations happen, the long-term trend remains upward.
- Wealth Creation – Real estate remains one of the best tools for building financial security.
Many buyers in 2020 hesitated, thinking prices would fall. Instead, they increased dramatically. The next opportunity is coming—will you be ready for it?
📞 Call us at 416-882-4172
📩 Email mortgages@dannycardoso.ca
Let’s discuss your options before the next wave of buyers enters the market.
Lower Rate with Higher Penalty OR Higher Rate with Lower Penalty?
General Danny Cardoso 18 Feb
When choosing a mortgage, many borrowers focus on getting the lowest interest rate. But what happens if life throws a curveball and you need to break your mortgage early? The penalty for breaking a mortgage can be significant—sometimes wiping out any savings you gained from a lower rate. That’s why it’s important to weigh your options carefully:
- A lower rate with a higher penalty can save you money in interest but can be costly if you break your mortgage early.
- A higher rate with a lower penalty gives you flexibility, making it easier and cheaper to exit your mortgage if needed.
So, which option is better? It depends on your future plans.
When Should You Consider a Mortgage with a Lower Penalty?
If your plans are uncertain or you anticipate a major life change, a mortgage with a lower penalty could be the better choice. Here are some common situations where flexibility matters more than the lowest rate:
- Career Changes: If you expect a job transfer, promotion, or career shift that requires moving within a few years.
- Growing Family: If you’re in a starter home but anticipate needing more space soon.
- Potential Separation or Divorce: While not an easy topic, major life changes can make it necessary to refinance or sell your home.
- Investment Properties: If you’re testing the waters with real estate investing but may sell or refinance in the near future.
In these cases, breaking your mortgage early with a high penalty could cost you thousands—sometimes more than you saved with a lower rate.
How Mortgage Penalties Work
Lenders count on borrowers to keep their mortgage for the full term. If you break your mortgage early, they charge a penalty to recover lost interest. The penalty amount depends on your mortgage type:
The IRD is where penalties can skyrocket. It’s calculated based on the difference between your original mortgage rate and the lender’s current rate for the remaining term. If rates have dropped significantly, this can result in a massive penalty. Not just a few thousand, I’ve seen penalties as high as $30,000 before.
For example:
- You locked in at 5% for 5 years but break your mortgage in year 3.
- The lender’s rate for a 2-year term is now 3%.
- The lender will charge a penalty based on the difference in lost interest—potentially tens of thousands of dollars.
This is why choosing the right mortgage term and flexible lender is just as important as getting the lowest rate.
What’s the Right Choice for You?
If you have long-term stability, a lower rate with a higher penalty might be fine. But if you have any uncertainty in your future plans, it may be worth paying a slightly higher rate in exchange for a lower penalty.
Questions to Ask Before Choosing a Mortgage
- How long do I realistically plan to stay in this home?
- Could my job require me to relocate within the next few years?
- Do I anticipate major life changes (marriage, children, separation)?
- Am I comfortable with the risk of paying a high penalty if I need to break my mortgage?
A mortgage is a long-term commitment, but life isn’t always predictable. By choosing the right mortgage structure, you can avoid costly surprises down the road.
Need Help Finding the Right Mortgage?
Not sure which option makes the most sense for you? Let’s talk. I can help you evaluate your options and choose a mortgage that fits both your short-term and long-term plans.
📞 Call us at 416-882-4172
📧 Email mortgages@dannycardoso.ca
Let’s find the right mortgage for you—one that works for your life today and tomorrow.
Are Mortgage Rates Going to Drop in 2025? How U.S. Tariffs Could Impact You
General Danny Cardoso 5 Feb
Is the Economy Going to Crash? What Canadian Homebuyers Need to Know
With new U.S. tariffs on Canadian goods already in place—and Canada retaliating with its own tariffs—many Canadians are asking:
- “Are mortgage rates going to go down in 2025?”
- “Is the economy going to crash?”
- “How will these tariffs impact home prices and affordability?”
These are valid concerns, especially for homebuyers, homeowners renewing their mortgages, and those considering refinancing. While we can’t predict the future with certainty, the Bank of Canada (BoC) is widely expected to cut interest rates in 2025 to help offset economic uncertainty. However, rising inflation and shifting trade policies could complicate how quickly and how much rates actually drop.
Here’s what you need to know about how these tariffs could affect Canada’s economy, mortgage rates, and home affordability in the coming months.
Will Mortgage Rates Go Down in 2025?
The Bank of Canada has been signaling rate cuts for months, but how low they go—and how quickly—depends on several factors:
- Tariffs are slowing economic growth – The new U.S. tariffs on Canadian goods, and Canada’s retaliatory tariffs on U.S. imports, are putting pressure on businesses and increasing costs for consumers. If economic growth slows significantly, the BoC may lower rates to keep borrowing and spending active.
- Inflation is still a concern – Higher tariffs often lead to higher prices for goods, which could drive up inflation. The BoC has to balance rate cuts with the risk of rising inflation, which could slow the pace of cuts.
- Global uncertainty adds risk – The U.S. election, ongoing geopolitical tensions, and financial market fluctuations all add unpredictability. If the economy worsens, rate cuts may come sooner and deeper than expected.
What Does This Mean for You?
Rates are expected to decrease, but we’re in uncertain times. If you’re thinking about buying a home, refinancing, or renewing your mortgage, the best approach is to lock in now with flexibility to adjust later.
Should You Lock in a Mortgage Rate Now or Wait?
Many homebuyers and homeowners are wondering whether they should lock in a mortgage rate now or wait for rates to drop further in 2025. The good news? Most lenders allow you to lower your rate if rates drop before closing.
Here’s why locking in now is a smart move:
- Locking in protects you from unexpected rate hikes – While rates are projected to drop, inflation or unexpected economic shocks could slow cuts or even cause rates to rise. Locking in now ensures you’re covered.
- Many lenders allow a rate drop before closing – If rates go lower before your mortgage is finalized, most lenders will adjust your rate accordingly. This gives you peace of mind knowing you’re getting the best possible deal.
- Economic uncertainty makes waiting risky – Tariffs, inflation, and global trade tensions all create uncertainty. Locking in now ensures you don’t miss out on today’s competitive rates while still giving you room to adjust.
Fixed vs. Variable: Which Mortgage Should You Choose?
If you’re debating between a fixed or variable mortgage, here’s what to consider:
| Mortgage Type | Best For | Considerations |
| Fixed-Rate Mortgage | Homeowners who want predictability | Offers stability, but you might miss out on savings if rates drop significantly. |
| Variable-Rate Mortgage | Borrowers who are comfortable with fluctuating payments | Can save you money if rates decrease, but payments could rise if inflation pressures slow rate cuts. |
If you’re unsure which option is best for you, let’s discuss your financial goals and find the right strategy.
Is the Economy Going to Crash? What This Means for Canadian Homebuyers
While Canada’s economy is facing major uncertainty, most experts do not expect a full-blown crash. Instead, we’re likely to see:
- Slower economic growth due to rising costs from tariffs and inflationary pressures.
- Lower interest rates as the BoC tries to stimulate economic activity.
- A cooling housing market in some regions, as affordability challenges affect demand.
The best thing you can do right now is stay informed and make proactive mortgage decisions that protect your financial future.
Let’s Talk About Your Mortgage Options
Navigating the mortgage market in uncertain times can be confusing, but you don’t have to do it alone. Whether you’re looking to buy a home, renew your mortgage, or refinance for a better rate, I can help.
📞 Call me at 416-882-4172 or email mortgages@dannycardoso.ca, and let’s create a mortgage strategy that fits your needs.
Capital Gains Tax Rules: Are They Changing?
General Danny Cardoso 16 Jan
With all the uncertainty surrounding Canada’s proposed capital gains tax changes, many property owners are asking, “Do I have to pay capital gains if I sell my house?” or “Should I sell my investment property before the tax rules change?”
In June 2024, the federal government proposed increasing the capital gains inclusion rate—the portion of capital gains that is taxable. This change could significantly impact investors and property owners selling secondary residences, rental properties, or cottages.
But here’s the challenge: the rules haven’t been finalized yet. As Jamie Golombek explains in a recent Financial Post article, “Uncertainty remains as to what the final capital gains tax rules will look like, or even if they will be implemented at all.”
Despite this uncertainty, the Canada Revenue Agency (CRA) has announced it will proceed with collecting taxes based on the proposed higher inclusion rate until a final decision is made. This means that even if you sell now, you could still face a larger tax bill. If the rules are later changed or rejected, the CRA may adjust tax filings—but in the meantime, selling could cost you more than you expect.
The good news? Selling isn’t your only option. If you need access to cash or want to better manage your finances, refinancing or exploring alternative lending solutions could provide the flexibility you need—without triggering a large tax bill.
Ways to Access Cash Without Immediately Selling
If you need funds but aren’t sure whether selling is the best choice, here are some flexible ways to access cash while holding onto your property:
1. Refinancing Your Mortgage
- Access tax-free cash by using your home equity.
- Adjust your mortgage terms to fit your financial needs.
- Keep your property and continue building long-term wealth.
2. Alternative and Private Lenders
- Flexible lending options with easier qualification.
- Quick access to funds without selling your property.
- Short-term solutions to manage cash flow.
3. Reverse Mortgage (For Canadians 55+)
- Access tax-free equity with no monthly payments.
- Stay in your home while improving cash flow.
- Ideal for retirees on fixed incomes.
4. No-Payment Loan Options
- Interest-only or deferred payment loans.
- Manage expenses without immediate financial pressure.
- A flexible option to bridge financial gaps.
Comparing Your Options: Sell or Keep Your Property?
It’s important to weigh the pros and cons before making a decision. Here’s a simple comparison of selling versus other financing strategies:
Let’s Build a Strategy That Fits Your Goals
Whether refinancing, working with private lenders, or considering a reverse mortgage, understanding every option is essential. I work closely with your accountant to create a strategy that helps you minimize taxes and achieve both your short- and long-term financial goals.
I offer a clear, side-by-side comparison of all your financing options so you can make the best decision for your financial future.
📞 Call me at 416-882-4172
📧 Email me at mortgages@dannycardoso.ca
Know someone else who’s unsure about what to do? Share this post—many Canadians don’t realize they have options beyond selling.
Let’s talk about what works best for you.
Empower Clients: The 2025 Mortgage Outlook for Canadian Brokers
General Danny Cardoso 6 Jan
As a mortgage broker, your role in empowering clients with the right information has never been more crucial. As we step into 2025, the dynamic mortgage landscape offers unique opportunities and challenges. This blog is designed to help you educate and guide your clients, ensuring they make informed financial decisions while maximizing their homeownership potential.
2025: A New Year, A Fresh Start in Mortgage Planning
With the start of a new year, your clients are setting goals for financial security, whether they’re first-time buyers, homeowners considering refinancing, or investors expanding their portfolios. Here are key trends and strategies to focus on:
- Adapting to Market Trends
- Rising Interest Rates: With fluctuating interest rates still in play, educating clients about fixed versus variable rates can empower them to make decisions tailored to their financial goals.
- Shift in Housing Demand: Urban areas continue to see growth, while suburban markets remain attractive for families seeking affordability and space.
- Mortgage Renewal Strategies
- Remind clients that renewing their mortgage isn’t just about locking in a rate. Encourage them to explore options like increasing their payment frequency or switching lenders to optimize their finances.
- Equity Utilization
- Many homeowners are sitting on untapped equity. Educate your clients on how to leverage equity for renovations, investments, or consolidating debt without compromising long-term financial health.
Building Confidence Through Education
Clients rely on you for clear, actionable advice. Use these key areas to provide value:
- Pre-Approval Process: Walk clients through the benefits of securing pre-approval to enhance their negotiating power in competitive markets.
- Affordability Insights: Share tools and calculators to help clients determine what they can realistically afford.
- Debt Management: Equip clients with strategies to reduce liabilities and improve their borrowing capacity.
Communication: The Heart of Client Success
Seamless communication builds trust. Use these tips to enhance your client relationships:
- Leverage Automation: Tools like drip campaigns can keep clients informed with timely updates and helpful content.
- Personalized Touchpoints: Tailor your outreach with specific advice, such as market updates or reminders about upcoming rate changes.
- Family Involvement: Encourage clients to involve their families in key decisions, particularly when exploring multi-generational living or co-signed mortgages.
Collaborative Solutions: Partnering for Success
Mortgage brokers thrive when working collaboratively with other professionals. Foster partnerships that can enhance the services you offer to clients:
- Real Estate Agents: Provide a unified front to help clients navigate both the buying process and mortgage options.
- Financial Planners: Aligning with financial advisors ensures clients have a holistic view of their financial health.
- Legal Experts: Simplify the legal complexities of homeownership by connecting clients with trusted legal professionals.
Looking Ahead: Your Role in 2025
This year, focus on being a trusted advisor for your clients. Whether it’s navigating market uncertainties or maximizing homeownership potential, your guidance can make all the difference.
Let’s make 2025 a year of growth, confidence, and smarter financial decisions for all.