With rates beginning to move around a bit, I’ve noticed that some clients are getting better advice than others from various lenders so I asked one of my trusted mortgage brokers to put together some information to start the conversion. The question: what’s the best mortgage available for my clients?

Most people will define a mortgage purely based on the rate they receive, but that’s like judging the “best car” by the one with the lowest monthly payment.


It’s nearly impossible to predict your refinance needs three or four years out. Statistics show that well over half of Canadians with a mortgage renegotiate before their term is up.


So if you try to end your mortgage or move your mortgage prior to the current term (say 5 years) you may face larger than expected mortgage penalties or be restricted by mortgage limitations. Mortgage restrictions can easily outweigh small (e.g., 0.10% to 0.15 %) differences in interest rates.


Did you know the average five-year borrower changes their mortgage after just three-and-a-half years?

That’s why it often pays to trade a slightly lower rate for more flexibility, unless you absolutely know that you won’t change your mortgage during its term. A cheap rate can certainly save hundreds of dollars up front, just be sure you won’t be paying thousands later.


Can you break your mortgage any time you want?
• Most lenders let you pay a penalty and get out of a closed mortgage early. Some no-frills mortgages only let you out if you sell your property. Some don’t let you discharge your mortgage at all, until the term is up.
• You’ll almost always pay a rate premium for an “open” mortgage with no penalties. If you plan to keep the mortgage for more than six months, you’re often better off choosing a lower rate and paying the penalty to get out early (if needed). The more you are borrowing, the more this applies.


If a mortgage penalty applies, how is it calculated?
• Fixed rate penalties are usually three months of interest or the interest rate differential (IRD), whichever is more. This is the difference between what the bank would have made if the mortgage went the full term and how much money they are not getting paid by closing your mortgage rate and the current mortgage market rate. Variable-rate penalties are typically 3-months of interest based on your current rate.
• Penalty calculations based on posted rates (i.e. rates higher the rate you actually pay) can sometimes be several thousand dollars more expensive. For example, instead of a standard 3-month interest penalty based on your current rate, some lenders charge 3-month interest penalties based on posted rates.
• Others charge interest rate differential penalties when 3-month interest charges normally apply. A few even ding you with 12-month interest penalties or penalties equal to 3% of your balance. Avoid such mortgages unless the rate savings is significant.


Can I port (move) my mortgage to a new property to avoid penalties?
Never underestimate your odds of moving. Look for good porting flexibility, especially if you’re young, need job mobility and/or have a growing family. Some lenders let you port, but not increase. That forces you to pay a penalty if you buy a pricier house and need more financing. Remember as well that that credit unions prevent porting across provincial lines, a problem if you move out of province.


Provided by Allan Bowerman, Mortgage Associate-Managing Partner-CERC Relocation Specialist, Ultimate Mortgage Partners Ltd.


If you have been shopping for a mortgage and your lender hasn’t explained about porting your mortgage, terminating your mortgage or other situations when fees may apply, please take the time to review your options and potentially save yourself some money on your mortgage costs.


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Beginning Feb 1, 2014, new legislation will determine minimum warranty requirements for new constrution in Alberta. The changes apply to new homes constructed under a building permit applied for after Feb 1 2014.


"All new homes (detached homes and condominiums) would at minimum, include a warranty for:

  • One year labour and materials;
  • Two years for defects in labour and materials related to delivery and distribution systems;
  • Five years building envelope protection, with a requirement for the warranty provider to offer the consumer the option to purchase additional years of coverage; and,
  • 10 years coverage for major structural components."

Details and information source - Alberta Municipal Affairs


What does the change mean for homeowners?


There are currently various warranty programs available to builders and consumers that offer various levels of protection and some warranty packages provide much less coverage than homeowners may expect. This is true for single family homes and condominiums (townhouses and apartments).  The New Home Buyer Protection Act is the provincial effort to manage this issue.



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Waking up to the thick layer of frost outside this morning, it is the sign it's time to winterize for the winter.


1. Get your furnace serviced if you haven't had an annual maintenance check recently. If you've done major renovations this year or added a basement development you might want to have the ducts cleaned too. If you have a gas fireplace, add that to the service list if you haven't had it checked in a couple of years.


2. Clean and inspect any wood burning fireplaces.


3. Test your smoke detectors and change the batteries. If your smoke detector is more than 8-10 years old, it needs replacement. The test may beep but it may no longer be as effective at detecting smoke and fire so check your model and replace if needed.


4. Check your windows and doors and repair any seals needed.


5. Blowout and winterize sprinkler systems and shut off water to outside taps.


As you take a walk around your property secure anything that might be blown away or damaged during a winter storm and put up the fall decorations.


Oh, and pull out the sleds, skates, skiis and other winter gear. There is an upside to coming snow.

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Every once in a while I have a chat with folks looking for help with real estate that don't really understand what it looks like to work with a Realtor. They don't know what to expect. Good question. So before I answer, I have to say this article is about me. Other Realtors work differently so I can't speak for them.

In terms of selling a property this is rarely misunderstood. Realtors work with homeowners to present, market, list and sell their homes to qualified buyers that can complete on their purchase. There's lots that goes on in the middle, but it is my role to get all the middle taken care of so you can focus on moving and packing or finding your new home.


In terms of purchasing a home, there is more ambiguity. Some folks go out on their own and find their own home and work with the listing agent to purchase. This works well for some, but not a method I feel is in the buyer's best interest.

The other option is to interview and seek out a Realtor when you are buying much like if you were selling your home. There is most often no additional cost to a buyer in this case unless we are purchasing a private listing.


So when I work with folks wishing to buy a new property a large part of my role is education. In looking at potential options, I listen to your needs and questions and put information in your hands. I work with you to ensure you see the properties on market that would be potential options. We talk about the things that matter to you such as proximity to infrastructure, zoning, transportation, being close (but maybe not too close) to family, schools, work. We talk about timing, whether your dining room set will fit, the cost of new flooring and all of the other things you need. We are working together to find your home. You share your personal information with me and that becomes nobody else's business. My role is supporting you in figuring out what you need and wish to afford and then finding that home, being successful in securing a purchase and completing on Possession Day. As in selling, a lot happens in between, and my role is to ensure the pieces come together.


I also assist with the uniqueness of each purchase. Educating you about how condos work; what an RPR is; managing inspection issues, foreclosures or issues on title; estate sales and many other challenges that come up during a purchase.


I bought and sold numerous properties before becoming a Realtor. I had great experiences and poor ones in various cities and I do try very hard to emulate one Realtor in particular that had worked with my family for many years in BC. Her name is Teri Steele. She is truthful, educated and we always felt she cared about our family. She helped us fight through multiple offers on one purchase, work through inspection issues on another, knew when to be tough and when to be gentle. She knew what she knew, told you when she didn't know something and then found answers for us. She answered her phone, was there when we needed her and made our plans come together.


If I could be that support for you, then that's what this is all about.


P.S. To those great folks that have allowed me to assist them, Thank you! And thank you for passing my name on to others. That makes my day.

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The Calgary Real estate market is quite the mixture of micromarkets currently. Generally speaking the numbers are in territory to the benefit of the seller, but at the same time I've been seeing some very great properties sit on market and selling for less than expected. Are folks listing too high thinking too far ahead? Is this price specific? Area specific? It takes details to review.


On the big picture, the current inventory is low and some buyers are finding little choice.

Properties are also selling on average closer to the selling price.

From Oct 1-2 (the last two days), 168 properties sold in the city of Calgary. 33 of those sold at or above list price.

That's hard news for folks shopping for a great deal as you just can't expect to pay 95% of list price for a home in this market especially at lower price points if it has been on market for 6 days. Setting the right expectations and looking at the right properties is part of the puzzle right now.


Of homes sold since Sept 15 the average days on market was 35 days. The median was only 22. When you consider that sale date is after conditions are removed, those are short windows.


Ok, at the end what do you get? Well, it was fun to play with numbers, but if you are in the market and you don't know some of this you may not be successful in being the winning offer on your ideal property. Selling is about more than running some numbers on a computer and picking a price.


It's time to get into details to ensure your plan is successful.  

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Data supplied by CREB®’s MLS® System. CREB® is the owner of the copyright in its MLS® System. The Listing data is deemed reliable but is not guaranteed accurate by CREB®.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.
The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.