What to do with your mortgage given the recent rate hike by the Bank of Canada? We were expecting the Bank of Canada (BofC) to increase its overnight lending rate which has affected most of the different banks’ prime rates. This rate increase occurred a few days ago and will have a direct impact on your variable rate mortgage (VRM) and unconsolidated debts.

Some mortgage and home buying tips:


  1. If you’re not paying your credit cards or lines of credit in full on a monthly basis, please give us a call immediately because you should consider consolidating your debts into your mortgage, which can decrease your monthly interest charges and improve cash flow. We’ve helped 100’s of people with this exact strategy. The important thing here is to maintain the same mortgage amortization period to help you pay off your debts instead of stretching out the payment period!
  2. Don’t panic if you have a variable-rate mortgage (VRM). We’ve recommended this mortgage for you because you were a good candidate (low debt ratios, good income, good credit ratio, good cash flow). We may have already contacted you to look at getting a better rate on your VRM. Please respond and pay attention to our follow up! We’ve identified that there’s an opportunity for you to save money.
  3. More people are renting than ever before. If you are considering a rental property purchase and you have a positive cash flow of a $100 or more, you’re doing okay in the Guelph rental market. Although I don’t recommend buying a rental property just for price appreciation, you may want to consider purchasing in a community close to Guelph (within a 30 to 45 minute drive) which has good cash flow. The new mortgage-lending rules have placed at least 15 to 20 percent of potential home-buyers out of the market who need to continue renting.
  4. If you’re a first-time-buyer and are feeling discouraged, don’t be!!!! Get into the housing market as soon as you can. Maybe it’s not buying a detached home – perhaps an apartment condo or townhouse will do! If you’re purchasing in Guelph you can anticipate property to appreciate at 4 to 6 percent year-over-year (which it has done historically). You’ll likely be able to buy a detached home in about five years once you’ve made some gains in home equity.

Call me or email me if you have any questions! We love helping people with technically-supported honest mortgage advice!

© Sandra Lastovic is the Principal Broker with the Mortgage Centre in Guelph. With over 15 years’ experience and holds a M.Sc. from the University of Guelph. She was recently ranked at the top 75 agents in Canada by The Canadian Mortgage Professionals annual survey and 2017 Most Influential Women in the Mortgage Industry. She can be reached at 519-763-3900 x1001 or www.skipthebank.ca