Latest news with #PenelopeGraham
Toronto Star
25-05-2025
- Business
- Toronto Star
Breaking your mortgage to land a better interest rate ahead of renewal? Be prepared to pay up
With more than a million Canadians gearing up to renew their mortgages this year, some homeowners are racing to refinance ahead of their renewal due date. Data from rate-comparison site reported that refinance inquiries from Canadians have doubled to 12 per cent in 2025, up from six per cent in 2024. defines a mortgage refinance as breaking your current mortgage and starting a new one, either with the same lender or a different one. ARTICLE CONTINUES BELOW Refinancing can also involve changing your amortization length, lowering your monthly payment or tapping into the equity you've built into your home — all without a prepayment penalty if done at the end of your current mortgage term. These changes can be negotiated at renewal, which entails extending your current mortgage contract to a new term. Experts agree that timing a refinance with your mortgage renewal can help you avoid expensive penalties associated with breaking your mortgage before its end date. Personal Finance Ready to buy your first home? Here are the steps you need to take — and the closing costs you face There are many hoops to jump through when buying your first home, from saving a down payment and Breaking a variable-rate mortgage in the middle of your mortgage term results in a penalty equal to three months' interest, says Penelope Graham, a mortgage expert at rate comparison site Meanwhile, the penalty for breaking a fixed-rate mortgage early is either the greater of three months' interest or a calculation known as the interest rate differential. While refinancing at renewal can save you money on the penalty, there are other costs to prepare for. First, there are legal fees, which cover administrative costs in facilitating the transaction between you and the lender, such as registering the new mortgage and conducting a title search on your property, says Graham, adding that the cost of these services is generally around $1,000. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW There are some cases where your new lender might cover the legal fees for you, particularly if you have a mortgage balance greater than $200,000. 'If you stay with your existing lender, you will likely just need to pay this legal fee and registration fees for the new mortgage,' says Graham. 'But if you are switching to a new lender, you may also need to pay what's called a discharge fee.' Personal Finance Death binder 101: Your guide to assembling documents that make life easier for your survivors Everything from account numbers and subscriptions to social media instructions and passwords are The mortgage discharge fee is the cost associated with transferring the mortgage from the original lender to the new lender. In some cases, Graham points out, your new lender might cover or reimburse the mortgage discharge fee. 'So, if you're shopping around, it's certainly worth asking if that lender is willing to do that,' says Graham. 'Not all of them do, but a good chunk of them do.' Christopher Molder, principal broker at Tridac Mortgage in Toronto, adds that the mortgage discharge fee typically ranges between $250 and $400. If the goal of refinancing is to tap into your home's equity, be prepared to pay an appraisal fee. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Molder explains that the appraisal process — through a physical inspection or an automated valuation model — determines the market value of your home. This figure is then used to calculate how much equity you have in the home. Molder adds that with tax, appraisal fees can range between $300 to $1,000. Personal Finance Amid U.S. tariff storms, you really need a rainy-day fund. Here's where to park your money Experts says keeping emergency cash liquid is crucial, in an account that earns at least some For borrowers planning to refinance at renewal, Graham recommends exploring your options as soon as possible. ' Refinance rates can be a little bit different than straight purchase rates or renewal rates … so time is certainly a benefit to have on your side, and the sooner you kick off this process of exploring your options, the better off you'll be.'
Global News
23-05-2025
- Business
- Global News
Are mortgage rates getting cheaper? Depends on where you live
If you're looking to buy a house this summer or renew your mortgage, there could be good news for you. But whether your rates are going up or down depends on where you live. The monthly home affordability report by looked at home prices and mortgage rates from 13 Canadian cities. In seven of those cities, mortgage affordability improved. While borrowing costs remained largely stagnant in late March and early April, plummeting home sales across Canada contributed to improved affordability, the report said on Thursday. According to the Canadian Real Estate Association, home sales dropped by 9.8 per cent in April. 'The lowest 5-year fixed rate as of May 22 is 3.84%. We've used the average of the Big Five Bank's rates in our calculations. Securing a lower rate, such as 3.84%, would have a big impact on how much you can qualify for,' Penelope Graham, mortgage expert at said in a news release. Story continues below advertisement 2:05 Business Matters: Canadian home sales fell in February amid tariff uncertainty Where did rates go down? According to the report, the city that saw the most significant improvement in housing affordability in April was Hamilton, Ont. The average home price in Hamilton was $801,400 — a drop of $9,600 from March. A Hamilton homebuyer would need an annual income of $166,500 to be able to buy a house. With a 10 per cent down payment and a 25-year amortization, their monthly mortgage rate came down to $4,066 a month. Story continues below advertisement This means that a Hamilton mortgage buyer who locked down their rate in April would save $49 a month compared to someone who locked it down in March. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy 'The Hamilton borrower in this scenario would save $49 on their monthly mortgage payment ($588 a year) in April compared to if they bought in March,' Graham said. The mortgage figures in this report are based on a mortgage with a 10 per cent down payment, 25-year amortization, $4,000 annual property taxes and $150 monthly heating costs. Toronto saw the second biggest drop in home prices, with the average home price dropping $7,500 to $1,009,400. A Torontonian would need an annual income of $205,850 to afford a home and their average mortgage payments came in at $5,122 a month — a drop of $38. While Vancouver saw the third biggest decline in home prices, with a decline of $6,300, it remains Canada's most expensive housing market by far, with an average home in April costing $1,184,600. Vancouverites also need the highest annual income of any city in Canada at $238,970 a year. They would also have to pay the highest monthly mortgage of $6,011 with a 10 per cent down payment, although it dropped $32 from March. The two Maritime markets that saw a drop in home prices are Fredericton (average home price of $333,900) and St. John's ($369,400). The annual income needed to buy a home is $78,000 in Fredericton and $84,760 in St. John's. Story continues below advertisement The average monthly mortgage payment for a homebuyer in Fredericton in April was $1,693 (a drop of $11 a month) and in St. John's it was $1,100 (a drop of $6 a month). The two big Alberta markets saw affordability improve marginally. The average Calgary home cost $583,000 in April, a drop of just $400. A homebuyer in that city would need an annual income of $125,170. The average Edmonton home cost $431,100 in April, a drop of just $200, and an Edmontonian would need an annual income of $96,430. Monthly mortgage payments came down by $2 in Calgary ($2,958) and $1 in Edmonton ($2,187). 2:00 Business Matters: Canadian housing market on hold, CREA data shows Where did rates go up? In six out of 13 cities, mortgage rates and home prices have both gone up. Story continues below advertisement The city that saw affordability worsen the most was Regina. The average home price in Regina rose $9,100 to $335,400 and the annual income needed to buy a house rose to $78,330. A Regina homebuyer who locked down their mortgage in April would have to pay $1,702 a month. 'The Regina borrower in this scenario would pay an additional $46 on their monthly mortgage payment ($552 per year),' Graham said. Montreal saw the second steepest hike in housing affordability with the average home price rising $6,300 to $574,900 in April compared to the price in March. A Montrealer who locked down their mortgage in April would have to pay an additional $32 a month with monthly costs of $2,917 compared to one who did so the month prior. They would need an annual income of $123,640. In April, Victoria came in as the third most expensive housing market in Canada after Vancouver and Toronto, with average home prices rising to $897,300 and the average homebuyer needing an annual salary of $184,620. Monthly mortgage costs rose $32 to $2,917 a month. The cost of the average home in Halifax rose by $6,000 to $563,000, with an annual income of $121,400 needed to buy a house. Monthly mortgage payments rose to $2,857. Story continues below advertisement Housing also got more expensive in the nation's capital, with the average Ottawa home now costing $631,200. A homebuyer in that city would need an annual income of $134,300. An Ottawa resident locking down their mortgage in April with a 10 per cent down payment would have to pay $3,203 a month. Winnipeg also saw a marginal worsening of affordability, with home prices rising by $700 to $385,300 and monthly mortgage costs rising by $4 to $1,955. A Winnipeg resident would need an annual income of $87,770 to buy a house, the report said.
