Not all insurance products are created equal.

One of the most common mistakes homeowners and potential homeowners make is that they hear the word “insurance” and just assume they have it! Well, you might have one kind of insurance, but you might be missing coverage elsewhere.

It is important to understand all the different insurance products to ensure you have proper coverage.

To help you get a better understanding of the insurance, below are the four main insurance product options you will encounter and what they mean:

Default Insurance: This insurance is mandatory for homes where the buyer puts less than 20% down. In fact, default insurance is the reason that lenders accept lower down payments, such as 5% minimum, and actually helps these buyers access comparable interest rates typically offered with larger down payments.

Default insurance typically requires a premium, which is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). This premium can be paid in a single lump sum, or it can be added to your mortgage and included in your monthly payments.

In Canada, most homeowners know of the Canada Mortgage and Housing Corporation (CMHC), which is run by the federal government, and have used them in the past. But did you know? We also have two private companies, Sagen Financial and Canada Guaranty, who can also provide this insurance.

Home (Property & Fire) Insurance: Next, we have another mandatory insurance option, property and fire coverage (or, home insurance, as most people know it by). This is number two on our list as it MUST be in place before you close the mortgage! It is especially important to note that not all homes or properties are insurable, so you will want to review this sooner rather than later.

In addition to protecting against fire damage, home insurance can also cover the contents of your home (depending on your policy). This is important for anyone looking at purchasing condos or townhouses as the strata insurance typically protects the building itself and common areas, as well as your suit “as is”, but it will not account for your personal belongings or any upgrades you made. Be sure to cross-check your strata insurance policy and take out an individual one on your unit to cover the difference.

One final thing to consider is that you may not be covered in the event of a flood or earthquake. You may need to purchase additional coverage to be protected from a natural disaster, depending on your location.

Title Insurance: Another insurance policy that potential homeowners may encounter is known as “title insurance”. When it comes to lenders, this insurance is mandatory with every single lender in Canada requiring you to purchase title insurance on their behalf.

In addition, you have the option of purchasing this for yourself as a homeowner. The benefit of title insurance is that it can protect you from existing liens on the property’s title, but the most common benefit is protection against title fraud. Title fraud typically involves someone using stolen personal information, or forged documents to transfer your home’s title to him or herself – without your knowledge.

Similar to default insurance, title insurance is charged as a one-time fee or a premium with the cost based on the value of your property.

Mortgage Protection Plan: Lastly, we have our mortgage protection plan coverage. This is optional coverage, but one that any agent can tell you is extremely important. The purpose of the mortgage protection plan is to protect you, and your family, should something happen. It acts as a disability and a life insurance policy in regards to your mortgage.

Typically, when you get approval for a mortgage, it is based on family income. If one of the partners in the mortgage is no longer able to contribute due to disability or death, a mortgage protection plan gives you protection for your mortgage payments. However, most homeowners don’t realize that if they buy one of these policies through their financial advisor, life insurance agent or bank, the policy will not be able to move with them to a new lender.

As your mortgage professional, I have an exclusive opportunity with this product through Manulife. This means that, if you purchase a Manulife Mortgage Protection Plan with me, you are protected for the life of your mortgage. You do not have to stay with the same lender! If you move, your protection ports with you instead of other similar products where the plan is specific to that lender. In those cases, should you want to switch lenders, you would need to re-qualify for your mortgage protection plan – possibly at higher rates!

If you have any questions about mortgage insurance or what are the best options for you, please do not hesitate to reach out to me! I would be happy to take a look at your existing plan and discuss your needs to help you find the perfect coverage to suit you and your family.

The Bank of Canada delivered welcome news for variable-rate mortgage holders today when it stood by its expectation of no rate hikes until early 2023.

“We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved,” reads the BoC statement released following its rate decision. “In the Bank’s January projection, this does not happen until into 2023.”

In its decision, the Bank left its key overnight rate unchanged at 0.25%, where it’s been for the past year.

Despite the economy proving “more resilient than anticipated” during the second wave of the pandemic, resulting in a stronger near-term outlook, the Bank noted there remains “considerable economic slack and a great deal of uncertainty about the evolution of the virus and the path of economic growth.”

As a result, in addition to keeping interest rates low, the Bank said it will maintain its current bond-buying pace of at least $4 billion each week, which it says will continue until the recovery is “well underway.”

Also known as Quantitative Easing, this program has helped keep fixed mortgage rates lower than they otherwise would be. The Bank’s large-scale asset purchases keep upward pressure on bond prices, resulting in lower yields, which lead fixed mortgage rates.

The program has largely achieved its objective of keeping borrowing costs lower for households and businesses for much of the past year, but a recent surge in yields in late February has led to a sustained increase in fixed mortgage rates. Five-year fixed rates are now about 20 to 30 basis points higher than they were just weeks ago.

The Bank indicated in January that it would begin to reduce the pace of bond purchases if growth was in line with its expectations. A number of analysts have suggested that tapering could begin as early as April.

Financial Markets at Odds with BoC’s 2023 Rate-Hike Call

Despite the BoC sticking to its script that it foresees the overnight rate remaining unchanged for the next two years, financial markets see rate hikes closer on the horizon.

As of today, OIS prices tracked by Bloomberg imply about a 40% chance of a 25-bps rate hike by year-end. That could result in today’s prime rate of 2.45% rising to 2.70% and immediately boosting borrowing costs for variable-rate mortgage holders. However, markets are still largely expecting the first rate hikes to begin by mid-to-late 2022.

Bond traders see two to three BoC rate hikes by 2024, resulting in prime rate rising by 50 to 75 bps.

“That kind of monetary tightening is nothing to panic over,” writes RateSpy’s Robert McLister, noting it would be “historically modest” for a rate-hike cycle following a recession. Historically, rates have risen about 200 basis points from their lows in previous policy-tightening cycles.

He adds that those who already have a variable rate could still enjoy another full year of a near-record low prime rate, or “maybe 2+ years if you’re lucky.”

Should the BoC be Worried About Runaway Inflation?

The Bank also touched on the strong 9.6% growth in GDP recorded in the fourth quarter, adding that it now expects Q1 GDP growth to be positive rather than the contraction originally forecast.

Indeed, strong economic growth prospects have been largely responsible for the recent run-up in bond yields, which are driving fixed rates higher. The BoC warned that CPI inflation is likely to move to the top of its 1-3% target band over the next few months, but added that the expected rise “reflects base-year effects from deep price declines in some goods and services at the outset of the crisis a year ago.”

“We expect the BoC will look through a largely energy-driven increase in headline inflation in Q2, but note that risks are tilted to the upside as the economy re-opens with the potential for demand to outpace supply in some sectors,” writes Josh Nye of RBC Economics. “Our base case, though, assumes headline inflation will slip back below 2% by the end of this year and that underlying inflation won’t be sustained at the BoC’s 2% target until 2022.”

TD senior economist Sri Thanabalasingam said there are two reasons why inflationary pressures haven’t yet forced the Bank to revisit its level of monetary support through QE.

“One, a more resilient Canadian economy implies less scarring from the pandemic, which suggests growth can be stronger without becoming inflationary. This offers room for the Bank to maintain monetary stimulus at its current level,” Thanabalasingam wrote.

“Two, even while some areas of the economy are outperforming, others are struggling. Over 500,000 workers have been unemployed for 27 weeks or more, and until these Canadians find new opportunities, inflationary pressures are likely to be modest.”

Steve Huebl  

March 10, 2021

Canadian bond yields hit their highest level since April in recent days, and a number of lenders have responded by starting to raise some of their mortgage rates.

CMLS, MCAP and First National were among the non-bank lenders to increase at least some of their rates, with their broker rates rising 10-30 bps.

The 5-year bond yield, which leads fixed mortgage rates, closed at 0.67% on Monday, a 10-month high. As funding costs rise, lender margins get squeezed to the point they can no longer absorb the increase without passing it on to borrowers.

What’s Driving Yields Higher?

There are a number of domestic factors contributing to the run-up in bond yields, but much of the impact is coming from south of the border, according to Dave Larock of Integrated Mortgage Planners.

“The current surge in bond yields is really a U.S. story, with GoC bond yields taken along for the ride…” he writes. “Simply put, the recent run-up is a response to the growing consensus belief that U.S. inflationary pressures will rise more quickly than previously expected.”

North of the border, sentiment is largely positive on the expectation that COVID-19 vaccines will finally spell the end of the pandemic and its restrictive lockdown measures. Not to mention, the economic impact of the Government of Canada’s own proposed $100 billion of post-pandemic stimulus spending.

Will Mortgage Rates Continue to Rise?

Nothing is certain, of course. Bond yields also jumped back in November 2020 on news of Pfizer’s COVID-19 vaccine proving effective in trials, which caused some at the time to suggest rates would start rising. Instead, they continued to fall, right up until last week.

“For my part, I continue to believe that the current run-up in bond yields will be temporary, and it is worth remembering that nothing goes up or down in a straight line,” Larock wrote. But he also acknowledged rates won’t remain low indefinitely.

“The only thing that has been holding lenders back is stiff competition—no one wants to be the first to move higher,” he said. “Regardless, the dam will break very soon.”

Rob McLister, founder of RateSpy.com and mortgage editor at RATESDOTCA, sees this rise in yields as more sustained, saying mortgage rates have “turned the corner.”

“Expect further hikes,” he wrote, noting that bond yields have soared roughly 30 bps since February 1. “There’s still no sign of increases from the big guns (major banks), but if this yield climb persists, it’s just a matter of time [that they will follow].”

How Should Mortgage Shoppers Respond?

For those with a mortgage closing in the next few months and who are considering a fixed mortgage, the experts offer two words of advice: lock in.

“It’s rate-hold time if you’re closing a mortgage between now and the end of June (since most rate guarantees last only 120 days or less),” McLister said.

“Some lenders will milk their current low rates for all they’re worth in order to keep the volume flowing…But don’t bet on that lasting long…unless there’s a further derailment of our economy, which is possible, but less probable the further we get into 2021.”

For those leaning towards a variable rate, those aren’t currently at imminent risk of rising, since they are priced based on prime rate, which rises or falls depending on the Bank of Canada’s overnight target rate movements.

At its last rate decision in January, the Bank of Canada said its overnight target rate of 0.25% will likely remain unchanged until 2023, providing assurances to borrowers that now is still a good time to purchase a home.

Another point to remember is that, despite any small to moderate increases in the 5-year fixed rate, Larock notes that borrowers will still have to qualify based on the government’s 4.79% mortgage stress test.

“So, an increase in real rates won’t have any impact on the amount they can actually borrow,” he wrote. “If you’re in the market for a mortgage today, the usual tips apply. If you will want a fixed rate, which is likely, lock in a pre-approval to guard against rising rate risks.”

Steve Huebl

·February 23, 2021

Commercial Mortgages are designed for businesses and investors who wish to purchase or refinance commercial, income producing properties and offer a flexible way to raise capital.

Some common commercial mortgage products provide funding for:

It has been a newsworthy few weeks to start off the year and for all us wishfully thinking that we would ease into 2021, I think we can admit that we were mistaken. Fortunately, hockey is back and better than ever with an all Canadian division and re-established rivalries. Virtual lines are being drawn in the sand all across the country.

Rates and Curves

As we approach the conclusion of the second trading week of the year, the 5-year GOC and 10-year GOC currently stand at 0.44% and 0.83% respectively. The 5-year is up 7 bps in 2021 and 10-year is up 18 bps in 2021.

The idea of additional fiscal stimulus with the continuation of monetary policy has given this bond market selloff some serious momentum over the last few weeks. Although the outlook for near-term growth is dismal due to renewed lock downs in Ontario and Quebec, investors seem to be overlooking this fact and focusing in on vaccine distributions, economic growth and future inflation above what was previously expected.

Over to the credit curve, the 5-year CMB’s are currently yielding 0.70% and the 10-year is at 1.19%. Interestingly, spreads on the 5-year are down 3 bps from the start of the year over the risk-free Government of Canada bond while the bond yield is up 3 bps. A similar story with 10-year CMB’s as well – the bond us up 11 bps in 2021 while spreads are down 6 bps. This points to the demand and quality of CMB’s while overall yields on Government of Canada bonds continue to increase.

Canada Housing Trust (CHT) Issuance Levels

In 2020, CHT completed a total of $53.0 billion in CMB issuance, their largest annual borrowing ever. This included a reintroduction of the 3-year offering for the first time since March 2009 in addition to $15.0 Billion in the 10-year issuance bucket. For reference, 10-year issuance in 2019 totaled only $8.75 Billion. Moving forward, we hope to see similar large 10-year issuance sizes in order to continue supporting our clients seeking for 10-year mortgages.

During the heat of the first COVID wave, CMB spreads unsurprisingly widened out 25-30 bps however they ended off the year 5 bps tighter on the 5-year and flat on the 10-year which speaks to the excellent credit quality of the bond and covenant. Furthermore, consistent domestic demand and strong demand from US, Asian and Middle Eastern investors continue to help the strong performance of CHT’s bond issuance offerings.

In case you missed it

• Unemployment is slowly creeping up and now stands at 8.6% vs. 8.5% last month. Relative to the pre-pandemic peak in February 2020, Canada currently has 574K fewer jobs.
• Two 975 NHA MBS pools launched this week. The first being issued by Merrill Lynch totaling $642MM at a spread of GOC + 33. The second issuance was by Laurentian Bank totaling $341MM at the same spread of GOC +33. Maturities on both pools were December 2025.
• The Bank of Canada has a rate decision next week on January 20^th. It is widely believed that there will be no major change in rate. Should the BoC cut rates next week, this would most likely lead to an additional steepening of the curve. Be sure to stay one step ahead by reading our First National rate announcement commentary published on the same day.

Neil Silverberg, Analyst, Capital Markets

Jan 15, 2021

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres
drcooper@dominionlending.ca

Bank of Montreal

Q4 net income: $1.58 million (+33% Y/Y)
Earnings per share: $2.41

• BMO’s residential mortgage portfolio rose to $108.1 billion, up from $102 billion a year earlier.
• The HELOC portfolio—63% of which is amortizing—rose to $35.9 billion from $33.8 billion a year ago.
• Mortgage growth through proprietary channels, including amortizing HELOCs, was up 8% year-over-year.
• 48% of BMO’s residential mortgage portfolio is insured, up from 42% a year ago.
• The loan-to-value on the uninsured portfolio is 54%, down from 55% a year ago.
• 80% of the portfolio has an effective remaining amortization of 25 years or less, up from 72% a year ago.
• Net interest margin (NIM) in the quarter was 2.60%, down from 2.69% in Q4 2019.

Deferrals & Delinquencies

• The 90-day delinquency rate “remains good” at 19 bps, with the loss rate for the trailing four-quarter period at 1 bp.
• Gross impaired loans in the residential mortgage sector stood at 0.29% of the portfolio, down from 0.36% in Q3 but up from 0.28% a year ago.
• The average credit score for clients with deferred balances is 721, and the average loan-to-value is 55%.

Source: BMO Q4 Investor Presentation

Conference Call

• “The vast majority of what’s left on deferral is mortgages, so I don’t expect those delinquency numbers to actually change a whole lot,” said Pat Cronin, Chief Risk Officer. “I mean, we’ll watch it carefully as we go, but so far we’re seeing pretty good signs.”

Source: BMO Conference Call

CIBC

Q4 net income: $1.02 billion (-15% Y/Y)
Earnings per share: $2.20

• CIBC’s residential mortgage portfolio rose to $212 billion in Q4, up from $202 billion in Q4 2019.
• Of the portfolio, $27 billion is from the Greater Vancouver Area (unchanged a year earlier), and $67 billion is from the Greater Toronto Area (up from $63 billion a year ago).
• Of the uninsured portfolio, the LTV was 52%, down from 64% a year ago.
• The bank reported $14 billion in originations in the quarter, up from $10 billion a year ago.
• The bank’s HELOC portfolio ended the quarter at $19.5 billion, unchanged from the previous quarter and down from $21.2 billion a year ago.
• Net interest margin in Q4 was 248 bps, down from 256 bps in Q4 2019.

Deferrals & Delinquencies

• CIBC reported $2.7 billion worth of mortgage balances in deferral in Q4, down from $33.3 billion reported in Q3.
• “The late-stage delinquencies of residential mortgages are down as we work with our clients who were not part of the deferral programs to bring their accounts current,” said President and CEO Victor Dodig.
• Of the bank’s uninsured residential mortgage portfolio, 0.28% are in arrears by 90+ days, unchanged from 0.28% in Q3 and down from 0.29% in Q4 2019.
• “Provisions were lower this quarter. However, we do expect to see impaired provisions trend higher and peak in the middle of 2021,” Dodig added.

Source: CIBC Q4 Investor Presentation

Conference Call

• “We also continue to see positive momentum in our mortgage business in the fourth quarter with year-over-year spot balance growth of 5% and sequential growth of 2%,” said Dodig.
• Asked about the bank’s prospects for growing its mortgage market share, Dodig said this: “You’ll recall that we said a year ago that our goal is to get our mortgage growth…performing consistently, and at the very least in line with market. If you look at our numbers quarter-over-quarter (and) sequentially over the course of the year, we are achieving that target. We expect to keep pace with the housing market as the housing market evolves and we certainly expect to keep pace with our competitors in terms of our investments and our mobile mortgage advisors and our product offering.”
• Laura Dottori-Attanasio, Senior EVP and Chief Risk Officer, added: “…we’re very focused on the quality of our growth and the anchoring of our new clients. And so that will certainly help us on a go-forward basis…And while I tell you that we haven’t been as successful as I would have liked in terms of retaining some of our past vintage clients when they came up for renewal, I believe we’ve laid the groundwork to ensure that we get not just better retention on a go-forward basis, but better acquisition.”
  
• Dottori-Attanasio acknowledged that the bank lost some market share this quarter compared to last, and is currently in sixth place in terms of market share. “What I would expect, and again, there’s movement from quarter-to-quarter, but that you will see a gradual improvement over the course of 2021,” she noted.

Source: CIBC Conference Call

National Bank of Canada

Q4 net income: $492 million (-18% Y/Y)
Earnings per share: $1.36 a share

• The bank’s residential mortgage and HELOC portfolio rose to $76.3 billion in Q4, up from $70.4 billion a year ago.
• The bank’s residential mortgage portfolio is 38% insured (71% in Alberta), down from 39% a year ago.
• The average LTV on the uninsured mortgage portfolio was 58%, while the average LTV on the HELOC portfolio was 55%.
• Quebec represented 55% of the mortgage book (unchanged from 55% from a year ago), while Ontario made up 27% (up from 26%) and Alberta 7% (down from 8%).
• Net interest margin was 2.19% in Q4, down from 2.23% a year earlier.

Deferrals & Delinquencies

• NBC reported $695 million in real estate secured loans (0.9% of loan balances) remaining under deferral as of Oct. 31, down from $3.7 billion in loans (5% of portfolio) as of July 31.
• Insured mortgages represent 43% of remaining mortgages under deferral.
• 98% of expired residential mortgage deferrals have restarted regular payments.

Source: National Bank Q4 Investor Presentation

Conference Call

• “On the outlook, I would say that we’ve been successful at growing our balance sheet, while being disciplined on pricing and we will maintain that,” said Lucie Blanchet, EVP, Personal Banking and Marketing. “We will also continue to evolve our pricing methodology. Like for example, we introduced AI based modelling in the pricing of the mortgages. So we will continue to refine that and evolve that to other products.”
• “…we had an excellent execution on mortgages in 2020. So, we had originations hit historical levels coming from the performance of our distribution channel and we’ve been able to improve the margins,” Blanchet added. “And at the same time, we absorbed more volume while decreasing our operational costs. So we really start 2021 with that strong momentum.”
• Looking ahead, Blanchet said this: “We expect we will grow slightly lower than what we’ve achieved in 2020. And I think demand will still continue to be stimulated. However, we expect some slowdown in the resale market due to the slowdown in immigration, but also the concern around the supply potentially across the country.“

Source: NBC Conference Call

Royal Bank of Canada

Q4 net income: $3.24 billion (+1% Y/Y)
Earnings per share: $2.23

• RBC’s residential mortgage portfolio rose this quarter to $293 billion, up 10.6% from $265 billion a year ago.
• Mortgage volume was up 11% year-over-year.
• The bank’s HELOC portfolio fell 5.4% to $78 billion from $81 billion a year ago.
• 67% of its mortgages are uninsured, up from 65% a year ago. The average LTV on the uninsured portion is 51%, unchanged from 51% a year ago.
• 90+ day delinquencies in the overall residential mortgage portfolio fell to 0.16% from 0.19% a year ago.
• The bank’s uninsured mortgage portfolio has an average FICO score of greater than 804, up from 797 in Q4 2019.
• Net interest margin was 2.56%, down from 2.76% in Q4 2019 “due largely to lower interest rates.”

Mortgage Deferrals & Delinquencies

• As of Q4, $6.3 billion worth of loans were still being deferred, down from 84% from $39 billion in Q3.
• RBC said it expected about 76% of its active deferral balances to roll off their payment arrangement by Dec. 31, 2020, “with a majority of the remainder to roll off by March 2021.”
• “Of (RBC’s) active deferrals, less than 2% of the balances are uninsured with a current LTV greater than 80%. And the majority of those balances are in Alberta, which has seen a decline in home prices over the last few years,” said President and CEO Dave McKay. “While we do anticipate retail delinquencies to rise over the coming quarters as all deferrals roll off, at present delinquencies remain lower than our normal rate.“
• RBC noted that approximately 2% of its deferrals have become delinquent, although a third were already delinquent prior to the deferral program. “This has resulted in a slight uptick in early stage delinquencies from the Q3 lows, said Graeme Hepworth, RBC’s chief risk officer.

Source: RBC Q4 Investor Presentation

Conference Call

• “We continue to gain market share through our 750 strong mortgage specialists driving more new originations and an overall focus on client loyalty where we are seeing retention rates at nearly 92%,” said McKay. “While low interest rates will continue to support buyers, we expect mortgage growth to slow going forward as pent-up housing demand begins to cool.“
• “In terms of specifically the mortgage business…we are pleased with our performance in 2020 despite kind of the extreme slowdown as the pandemic hit, we did really slingshot out of that and compete well, said Neil McLaughlin, Group Head, Personal and Commercial Banking.
• Asked about the bank’s aggressive growth in recent years and prospects for continued market share growth going forward, McLaughlin said RBC is well-positioned to continue its momentum thanks to two key factors: “One, we have consistently grown our distribution capability. So we are looking for quality mortgage specialists. We set a really high bar. We don’t sort of staff up and then staff down. We are sort of always kind of growing that sales force. And we have over 1,700 mortgage specialists that are out connecting with clients.”
• He continued: “The second piece in terms of really driving the growth and the market share is…We have really gone through and often felt we have optimized each part of that business. So from lead generation, lead conversion, how we get through adjudication, right through the fulfillment, we feel we started the year really firing on all cylinders and I think we are really well-positioned to come out of the pandemic and compete well. So that, and then I think good representation with our sales capability in the markets that are really growing in Ontario, B.C. and Quebec, where you are seeing the largest growth. So that’s what I really think is the sort of the fundamentals of our success.”

Source: RBC Conference Call

Scotiabank

Q4 net income: $1.9 billion (+18% Y/Y)
Earnings per share: $1.45

• The total portfolio of residential retail mortgages rose to $245 billion in Q4, up from $227 billion in Q4 2019.
• Mortgage volume was up 6% year-over-year.
• Net interest margin fell to 2.26%, down 15 bps from Q4 2019.
• Scotia noted it added 300 sales professionals to Canadian Banking in advisory, mortgage and commercial to “increase customer service and cross-sell.”

Deferrals & Delinquencies

• Mortgage loans that were 90+ days past due fell to 0.15% from 0.20% a year ago.
• Scotia reported that just $3 billion in retail loans remains on its deferral balance as of Q1 2021, a decline of 96% from a peak of $74.3 billion in Q2.
• “Our deferral exposure is skewed towards secured mortgage lending with low LTV,” said Chief Risk Officer Daniel Moore.
• “We see strong deferral payment trends. We’re adequately provided to absorb net write-offs for the second half of 2021,” Moore added. “And we’re seeing our customers return to current status in line with or better than our expectations.”

Source: Scotiabank Q4 Investor Presentation

Conference Call

• “The high levels of payment activity we saw in Q3 continued into Q4 as more customer assistance programs expired. 97% of our retail customers remain current in Canada,” said Moore.

Source: Scotiabank Conference Call

TD Bank

Q4 net income: $5.1 billion (+76% Y/Y)
Earnings per share: $1.60

• TD’s residential mortgage portfolio was $211.7 billion in Q4, up from $200 billion in Q4 2019.
• The bank’s HELOC portfolio rose to $94.5 billion from $91 billion a year ago.
• TD’s residential real estate secured lending portfolio is 73% uninsured (up from 69% a year ago) with a 53% LTV for the uninsured portion (down from 54% in Q4 2019).
• Net interest margin in the bank’s retail portfolio fell to 2.71% in Q4, down 25 bps from a year ago.
• 52% of the bank’s residential mortgage portfolio is in Ontario (down from 51% a year ago), followed by B.C. at 19%, the Prairies at 17%, Quebec at 9% and just 3% in Atlantic Canada.

Deferrals & Delinquencies

• Provisions for credit losses in Q4 were $251 million, down from $951 million in Q3 and $1.15 billion in Q2.
• Gross impaired loans in the residential mortgage portfolio rose to 0.18%, up from 0.14% a year ago.
• Mortgages under deferral fell by $41 billion from the previous quarter, and TD said “deferral terms have now largely expired.”

Source: TD Bank Q4 Investor Presentation

Conference Call

• “In terms of deferral related credit impact, the significant majority of clients that have graduated from deferral programs are current with their payments,” said Chief Risk Officer Ajai Bambawale. “And graduated deferral delinquency rates are elevated relative to our broader portfolios, but remain within expectations.”

Source: TD Conference Call

Note: Transcripts are provided by a third party (Seeking Alpha) and their accuracy cannot be 100% assured.

How a CHIP Reverse Mortgage Can Help You Cover the Costs of the Holiday Season.

As you’re undoubtedly aware, the holiday season can be a very expensive time. Not only are there gifts to buy, but there can be a host of hidden extra expenses – gift wrapping, postage, and more take-out meals than normal for a start.

It’s therefore no surprise that many Canadians find themselves struggling to afford these extra costs; many wind up paying for the holiday season with their credit card. According to a study by lowestrates.ca, 63% of Canadians expect to do this, with just over half of those carrying the balance into the new year.

And since credit cards have some of the highest interest rates around, they can easily lead consumers into a spiral of debt.  Today almost a third  of Canadians have outstanding credit card debt.

how a chip reverse mortgage can help

If you’re worried that you’ll overspend on your credit card this holiday season, the CHIP Reverse Mortgage could be for you. The CHIP Reverse Mortgage is a financial solution for Canadians over the age of 55 that allows you to access up to 55% of your home’s value in tax free cash.

The money can be used for whatever you want. This could include consolidating debt – including credit cards – renovating your home, or increasing cashflow at certain times of year, such as the holiday season.

Lower Interest Rates:

The CHIP Reverse Mortgage has a number of benefits over regular credit cards, with the first being lower interest rates. While credit cards can have interest rates between 12 and 23%, the CHIP Reverse Mortgage has rates of 4-7%.  If you are using a credit card and don’t pay it off in full, the holidays could cost you less if you used the funds from a reverse mortgage instead.

No Monthly Repayments:

Another advantage the CHIP Reverse Mortgage has over credit cards is that it doesn’t require monthly repayments. When you take out a Reverse Mortgage, you don’t have to pay anything until you leave your home.* Without the need for monthly debt repayments,  your monthly cashflow will increase, helping you avoid starting the new year with holiday debts to pay.

Cover the Cost of the Holidays for Years to Come!

The CHIP Reverse Mortgage doesn’t have to support your cashflow only this holiday season, but funds can be drawn on time and again when needed.

For example, say you initially took out the CHIP Reverse Mortgage for $25,000, then later down the road you wanted to enjoy some more of the cash in your home. Provided there’s enough equity left, you can take a subsequent advance of a minimum of $5,000 – all without repaying the initial amount first.  As with the initial lump sum, this money can be spent on whatever you want, whether that’s covering the costs of future holiday seasons, completing long wished-for home renovations, or supporting adult children with the down payment for their own home.

The holidays can be a stressful time, especially if you feel you have to use your credit card to cover the costs – costs which are often carried into the new year. With the CHIP Reverse Mortgage, however, you can pay for the holidays this year and for years to come, relaxed in the knowledge that you’re enjoying lower interest rates and don’t have to pay back what you borrow until you leave your home.

For further details and to see how the CHIP Reverse Mortgage can help you, please contact your DLC Mortgage Professional.

*You must continue to pay your property taxes and insurance and maintain your home in good condition.

Written By: Agostino Tuzi
Post Sponsored by HomeEquity Bank

Ultimate Checklist for Selling Your Home.

Selling your home can be an extremely stressful experience. Between thinking about moving logistics and financials, it’s easy to miss the small details in between the process.

With that in mind, we’ve built this checklist for selling your home to help you keep track of the things that will get a potential buyer interested. Turns out, it’s not as simple as just fluffing pillows or doing a light dusting. “Put your buyer’s hat on and walk through your home like it is the first time,” Marilou Young, an Accredited Staging Professional and an Associate Broker with Virtual Properties Realty in the metropolitan Atlanta area, told Forbes.

Below is the ultimate checklist for selling your home.

GET FAMILIAR WITH THE PAPERWORK

For home sellers interested in the history of the house, make sure you’ve got all the information handy; this can include paperwork on renovations, property tax receipts, deeds and transferable warranties.

GETTING THE PRICE RIGHT

According to HGTV, it can be helpful to do some market research on what homes in your area are selling for- then shave 15 to 20 percent off that. This way, you attract multiple buyers who can end up outbidding each other and bringing up the price. While that can seem like a risky move, it could work in the competitive markets of big Canadian cities.

DEPERSONALIZE AND DECLUTTER

You want potential buyers to see themselves in the space, which is hard to do if you have family photos on the wall or personal items around. This would be a good time to start putting items in storage or try to keep your personal items out of sight. At the same time, you’re also ensuring that you’re keeping your house tidy—a must if you want to make your home sellable. Check around the house for dirt, stains or small cracks you might be able to fix. And if you have pets, make sure their litter boxes and play areas are also clean and odour-free.

FIND A QUALIFIED REALTOR

Realtors can be helpful to take some of the processes off your plate, including marketing your home and arranging open houses. If you do go this route, none of this list will matter if you decide to work with a realtor that doesn’t know the market inside out. You can search their name on the Real Estate Institute of Canada to ensure that they’re qualified, and meet with them to see if you mesh and understand how they price your unit. At Proptalk, we also have this handy guide for more details.

DON’T SKIP THE HOME INSPECTION

While presenting an unconditional offer may win you the home of your dreams, it can also end up costing you more than you expected. If you’re mortgaged to the max, you can’t afford surprises like repairs or replacements that you haven’t already budgeted for. Consider a Home Protection Plan that includes an 18-month warranty and up to $20,000 in warranty coverage for major household features such as foundation, roof, heating and cooling.

Published by FCT

The holidays are coming up! As much as these celebrations bring us joy and harmony, they can also bring us stress. This is particularly true when it comes to your finances! However, don’t lose hope that this will be another draining year on your pocketbook. In fact, with a little planning, there are a few ways you can make sure your holidays are stress and credit-free.

• Manage Your Expectations: Did you find the holidays refreshing last year, or were they somewhat draining and you’re still trying to figure out how to pay off your credit card bills? If you are someone that wants your holidays to be energizing and provide that feeling of togetherness, there is more to it than just spending money. Once you decide your expectations, it becomes easier to work towards things that create that result.
• Determine Your Holiday Goals: Are you looking to plan an extravagant black-tie party or have a more low-key celebration? Maybe you just want to hang out with lots of family and friends and enjoy some good food? Or maybe you usually get away and are finding yourself homebound this year. No matter how you normally spend your holidays, sharing your thoughts with family will help determine your goals and come to a decision that works for everyone!
• Create a Budget: Once you have decided your expectations and goals for the holiday, it is time to create your budget. A little planning can go a long way to creating a credit-free holiday, and will help you spread out the costs. The first step is to create a list of everything you need, from individual gifts to decorations to baking ingredients and meal items to clothing!
• Start Now: Early planning can make all the difference when it comes to the holidays. Instead of lumping your entire budget into a couple paychecks, try keeping an eye out for gift ideas and cute decor all year long. While it may be too late this year, it could be a good strategy to try for 2021! Starting early will help reduce stress and give you more opportunities to scoop up incredible deals throughout the year, which means you can spread your budget even farther!
• Accept Help: While I know many of us try to do everything during the holidays so our families can just enjoy themselves, it is important to remember that the holidays are a time when we are supposed to support each other, and celebrate together! If you are hosting a dinner this year, don’t be afraid to ask your family to bring appetizers or drinks. If you are buying gifts for friends, set a limit or challenge everyone to make something by hand! Homemade gifts can often feel more special and it creates a fun exchange for you and your friends. There are many incredible ways to reduce stress and help get others involved so that the holiday is perfect for everyone

It is easy to get caught up in the consumerism and expectations of the holidays. Is dinner perfect? Did you buy enough gifts? Did you invite everyone? Is everyone happy? But don’t forget yourself in your efforts to please others.

Even though the holidays can feel hectic, it is important to celebrate YOU and be grateful for what you have – even if you weren’t able to check off all the boxes. Life happens, but the most important thing is that we celebrate when we can.

The holiday is YOURS, so make sure you spend it whichever way brings you the most joy – and the least amount of stress on your pocketbook.