Build Wealth Canada Podcast (Real Estate)

With the significant increase in interest rates over the past year, and with home buying and selling season right around the corner, I thought it would be great to have our resident mortgage expert on the show, to go over the implications of this higher interest rate environment that we're in. 

Whether you’re getting a new mortgage, or are considering refinancing, we tackle whether you should go with a variable rate or fixed rate mortgage in this current interest rate environment.

There could also be some new mortgage rules coming out this spring as well, so we cover what those are so that you can be better prepared. 

You might have also been experiencing quite a bit of a payment shock if you hold a variable rate mortgage, with a drastic increase in your monthly mortgage payments. And, if you’re a fixed rate mortgage holder, then you’re not out of the woods either, as when your mortgage inevitably comes up for renewal, you might very well be forced into a much higher rate on your new mortgage than what you’ve been used to over the past few years. We’re going to cover this new challenge that you may be facing, with these higher rates, along with some things you can do to lower your monthly mortgage payments, despite these increases in rates.

Our Guest:

Our guest today is the show’s resident mortgage expert, Sean Cooper. He's who I go to and who I send friends and family to for any mortgage related questions.

Sean is the bestselling author of the book, "Burn Your Mortgage". He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30.

These days, Sean’s helping others burn their mortgages too, as an independent mortgage broker.

Sean has offered to answer for free, any questions that you, the Build Wealth Canada listeners have. I’ve set up a special page for him so all you have to do is go to, and there you can send him a message with your questions.

Or, if you prefer, you can even pick a time on his calendar for a phone or video call to get your questions answered with him live, for free.

Sean is a licensed mortgage broker too so I definitely also encourage you to reach out to him if you’re looking to get a new mortgage or if your mortgage is coming up for renewal, as at the very least he’ll be able to provide you with a short list of the best mortgages that he’s been able to find across all of Canada from the 60+ lenders that he monitors.

None of this costs you anything, and there’s no obligation to get your mortgage through him or use any of those suggested mortgages.

At the very least, you’ll get some good education and research on the top mortgages available in Canada right now, you’ll learn what to look for when choosing your next mortgage, and you can always decide later whether you’d like him to help you with the process, or if you want to do it all yourself. It doesn’t cost you anything regardless.

Questions from the Episode:

  1. In 2022, the Bank of Canada raised interest rates 8 times. The prime rate went up a whopping 4%. So far we have already seen one increase of the prime rate in 2023. As someone that’s in the industry, what are you hearing and what do you think is in store for mortgage rates in 2023, 2024 and beyond?

  2. With all these mortgage rate changes that we’ve seen in the recent past, what are some considerations when choosing between a fixed rate and a variable rate mortgage?

  3. What’s happening in the real estate market right now (so the first quarter of 2023 which is when we’re recording this episode)? And is now a good time to buy a home?

  4. I heard there could be some new mortgage rules coming out in the spring. Can you tell us about those and how they may affect buyers? 

  5. For anybody new to working with a mortgage broker, can you speak to how it works, and whether you have to pay for the services of a mortgage broker?

  6. What are some ways to qualify for a higher home purchase price, despite the new pending mortgage rules? 

  7. A lot of people are facing “payment shocks” right now. If your mortgage is coming up for renewal in the next few months and you currently are locked into a low fixed rate, you can expect your payment to jump at renewal. What are some things you can do to lower your payment back down?

In this episode, we cover the rising interest rate environment that we're currently in here in Canada, and how it can impact you financially.

We also cover how to decide whether you should go fixed or variable on your mortgage in the current interest rate environment.

Next, we cover the subject of how you can take out some of the equity that you’ve built up in your home, so that you can either use it to invest, or deploy it elsewhere (without having to actually sell your home).

We also discuss the Smith Manoeuvre, which is a technique that you can use here in Canada to make your mortgage interest tax-deductible (and be able to invest a bit easier when you pay down your mortgage).

All this and more on this month's episode. 

Questions Covered: 

  1. For the first time in over 3 years, the Bank of Canada has started raising interest rates. What should we be considering if we have a variable rate mortgage or have debt that’s tied to the prime rate (like a home equity line of credit)?
  2. For Canadians that have their mortgage coming up for renewal in the near future, or those looking for a new mortgage, based on the current environment, what is the mortgage rate outlook for the coming year and how can those Canadians best decide whether they should go fixed or variable?
  3. From what you’re seeing, what is the real estate market outlook for this coming spring and the rest of the year? Is it likely to be a buyer's market or a seller's market? What kind of buying/selling environment should people be ready for if they are thinking of moving, buying/selling a house?
  4. Home prices have grown substantially over the years making many Canadians who already own a house pretty wealthy on paper, but much of that money or equity is tied up in the house, and I’m sure many of us would like to be able to use some of those gains either for investing, or other things. We’ve probably all heard of using a home equity line of credit (HELOC) to take some of that money out, but what are the other options available to us, and what are the pros and cons of using a HELOC vs these other options? 
  5. On the flip side, with the rising cost of living (we’re hearing about inflation a lot), cash flow is becoming a challenge for some Canadians, making it even more difficult to find extra cash to invest for their retirement, while also paying down their mortgage and other expenses. However, there are strategies to pay down your mortgage and invest at the same time. Can you explain this strategy to listeners that are in this situation? And what are the pros and cons? 

With fixed mortgage rates finally beginning to increase in Canada, many Canadians are wondering whether they should be locking in their mortgage rate in case interest rates continue to climb.

We also cover whether you can lock-in a mortgage rate now, and then have the option to renew at the lower rate if the interest rates continue to climb.

And, while it’s easy to get fixated on mortgage rates whether you’re an existing or future home buyer, it is worth mentioning that the penalties for breaking a variable vs fixed-rate mortgages can be drastically different, and can also vary significantly from provider to provider.

Which types of lenders tend to have the largest penalties?

What can we expect in fees depending on the lender and mortgage type that we choose?

We cover all that and more in this month’s episode.

Also, the spring real estate season is now upon us with lots of Canadians looking to buy and/or sell their homes. Our resident mortgage expert takes us through what you can expect, and how COVID is impacting the real estate market in Canada.

About Our Guest:

Sean is the bestselling author of the book, Burn Your Mortgage. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30.

These days, Sean’s helping others burn their mortgages too, as an independent mortgage broker.

Sean has offered to answer for free, any questions that you, the Build Wealth Canada listeners have.

Links & Resources Covered:

  1. Free private Q&A with Sean
  2. What's your passive investing style? (Stream Kornel's talk from the Canadian Financial Summit)
  3. EQ Bank (The bank that I use with savings account interest rates up to 30x higher compared to other Canadian banks). If you sign up through this link, email me any confirmation that you receive from EQ to and I'll email you my guide on the top ETFs in Canada, with an explanation of what I personally invest in and why.

Questions Covered:

  1. When we spoke before the podcast, you mentioned that fixed mortgage rates are finally on the rise. What are the implications of that for Canadians who already have a mortgage, as well as those that are looking to get a new mortgage?
  2. The spring real estate market is coming up. For those looking to buy a home or a rental property, what do we need to know about this particular time of year in Canada?
  3. Seasonality is clearly a factor when it comes to Canadian real estate. Can you take us through what we can generally expect depending on the time of year that we choose to buy or sell a home or rental property?
  4. Anytime interest rates move I’m sure you get lots of questions from your clients on whether they should lock-in their variable rate mortgage, or if someone is getting a new mortgage, whether they should go variable or fixed. Based on the current interest rate environment and the new changes to mortgage rates, what sort of analysis should we be doing to determine the best course of action?

  1. COVID is of course, still very prevalent here in Canada. Are there any misconceptions about COVID and its impact on real estate that you think are worth clearing up?
  2. As we head into the 2021 spring real estate season, would you say that it’s more of a buyer’s market or a seller’s market?

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Direct download: Rising_Mortgage_Interest_Rates.mp3
Category:Real Estate -- posted at: 7:26pm EDT