Build Wealth Canada Podcast (Real Estate)

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?

If you liked the episode sign up for free to receive all new episodes as they get released, news on giveaways, and the free guide on the Top 5 Personal Finance and Productivity Tools.

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