January 2022

James DeVuyst • January 1, 2022

What can we say about 2021 that hasn’t already been said, we continue to fight with an ongoing pandemic, we were struck with weather disasters that further strangled the supply chains, we’ve seen rapid inflation caused by many of these ongoing issues and to round everything out the housing supply continues to be at some of the lowest levels in history, only to be matched with ferocious demand.
 
Governments at various levels have now shifted the blame from “Foreign Investors” to “Canadian Investors” if we remember only 4 years ago, they put measures in place to curb foreign investment, and now we’re seeing governments getting ready to do the same to Canadians through various new measures. There are rumblings the federal government is looking to increase the down payment requirement from 20% to potentially 25-30% on all non-owner-occupied homes and a potential “no flipping” tax on primary residences that are sold in less than 12 months. All this has amounted to noise over the real issue, supply, supply, supply.
 
Statistics released this week from Canadian Real Estate authorities show that while the country’s stock of available homes for sale sits at record lows, the pace of building new units is also slowing. Canada Mortgage and Housing Corp. said the annual pace of housing starts in December fell 22 percent when compared with November. These are concerning times ahead and unless municipalities get on board with approving permits faster, incentivizing developers, and building outside the box, we will continue 2022 with many of the same problems.


Rates will be on the Rise

 
As we’ve seen during 2020 and 2021, rates have remained at the lowest levels in history. Remember when 2.99% on a 5-year fixed was considered “too low” by the Federal Government?
 
What we can expect for 2022 is rates will rise and the Bank of Canada will make changes to the overnight lending rate to curb the increased inflation we’ve seen at various levels from supply chain issues and increased government spending.
 
We have also seen Canadians take on more mortgage debt than ever before, however despite a record rise in Canadian mortgage debt and home prices in nearly every province, the expected default increase never happened. Total residential mortgage debt in Canada is now $2.14 trillion, according to Statistics Canada, the highest level on record; however, the Canadian Bankers Association report released October 14 revealed that, as of July 31, there were only 9,157 mortgages in arrears out of a total of 4.97 million residential mortgages in Canada. This amounts to a 0.18% default rate – considered low even by the Canadian standard, which traditionally has a default rate in the 0.30% range.
 
Canadians take pride in homeownership that even through a pandemic we managed to take on more mortgage debt and lowered our national default rate.



My Advice to You
 
We have been in this position before, the media, the government, and family and friends have stated to us that we need to “lock in” and be afraid that rates will increase so high that we will go back to the times of 15-20%, this will not happen. It cannot happen. In the last 18 years, rates haven’t increased past 6% (2008), and over the last 10 years, they have been below 3.5%.
 
If we break down the numbers and look at this with logic, we are left with the following. Prior to the pandemic, we saw the overnight lending rate at 1.75%, this translated into lower discounts offered by all major banks, which were in the range of prime (3.95%) -0.50% to -0.75%. We were paying a net rate of around 3.20%-3.45% depending on your discount secured.
 
Now when we look at what happened over the last 2 years going into our 3rd year, we saw banks offer variable discounts at record lows, in the range from prime (2.45%) -1.00 to -1.40%, this has translated to net rates of 1.05-1.45%. When the Bank of Canada starts to increase the overnight lending rate, for example, let’s say they go back to 2019 levels, we would see rates sitting at 2.65% (based on a net rate of 1.30%), remember that 2.99% we talked about?
 
The outlier with locking in your rate once the rumblings start is breaking your mortgage when you lock in, “the mortgage industry estimates the percentage of people who break a mortgage before maturity range from 33 percent to 60 percent. People underestimate how much life circumstances can change in five years.” If the pandemic has taught us anything this would be it. We also need to consider, a little unknown statistic, banks have increased the price of discharging a fixed rate mortgage. In 2019 we saw banks charging anywhere between 3-4% of your outstanding mortgage amount, once the pandemic hit, we saw this quietly increase to between 5-6% of your outstanding mortgage amount. With Canadians on average breaking their mortgage every 38 months, whether it be from refinancing or selling their home, this can be a catastrophic financial hit. So, before we start running to lock in our huge variable rate discounts, remember these points.
 
As always, I’m available for calls to discuss these points and your own personal financial situation. I would encourage everyone to reach out if they’re concerned or if you’re looking to make a purchase or refinance your mortgage in 2022!

RECENT POSTS

Smart Steps to Get Your Home Market-Ready

By James De Vuyst • February 19, 2026
Thinking About Selling Your Home? Start With These 3 Key Questions Selling your home is a major move—emotionally, financially, and logistically. Whether you're upsizing, downsizing, relocating, or just ready for a change, there are a few essential questions you should have answers to before you list that "For Sale" sign. 1. How Will I Get My Home Sale-Ready? Before your property hits the market, you’ll want to make sure it puts its best foot forward. That starts with understanding its current market value—and ends with a plan to maximize its appeal. A real estate professional can walk you through what similar homes in your area have sold for and help tailor a prep plan that aligns with current market conditions. Here are some things you might want to consider: Decluttering and removing personal items Minor touch-ups or repairs Fresh paint inside (and maybe outside too) Updated lighting or fixtures Professional staging Landscaping or exterior cleanup High-quality photos and possibly a virtual tour These aren’t must-dos, but smart investments here can often translate to a higher sale price and faster sale. 2. What Will It Actually Cost to Sell? It’s easy to look at the selling price and subtract your mortgage balance—but the real math is more nuanced. Here's a breakdown of the typical costs involved in selling a home: Real estate agent commissions (plus GST/HST) Legal fees Mortgage discharge fees (and possibly a penalty) Utility and property tax adjustments Moving expenses and/or storage costs That mortgage penalty can be especially tricky—it can sometimes be thousands of dollars, depending on your lender and how much time is left in your term. Not sure what it might cost you? I can help you estimate it. 3. What’s My Plan After the Sale? Knowing your next step is just as important as selling your current home. If you're buying again, don’t assume you’ll automatically qualify for a new mortgage just because you’ve had one before. Lending rules change, and so might your financial situation. Before you sell, talk to a mortgage professional to find out what you’re pre-approved for and what options are available. If you're planning to rent or relocate temporarily, think about timelines, storage, and transition costs. Clarity and preparation go a long way. The best way to reduce stress and make confident decisions is to work with professionals you trust—and ask all the questions you need. If you’re thinking about selling and want help mapping out your next steps, I’d be happy to chat anytime. Let’s make a smart plan, together.

Mortgages Aren’t One-Size-Fits-All

By James De Vuyst • February 5, 2026
Why the Cheapest Mortgage Isn’t Always the Smartest Move Some things are fine to buy on the cheap. Generic cereal? Sure. Basic airline seat? No problem. A car with roll-down windows? If it gets you where you're going, great. But when it comes to choosing a mortgage? That’s not the time to cut corners. A “no-frills” mortgage might sound appealing with its rock-bottom interest rate, but what’s stripped away to get you that rate can end up costing you far more in the long run. These mortgages often come with severe limitations—restrictions that could hit your wallet hard if life throws you a curveball. Let’s break it down. A typical no-frills mortgage might offer a slightly lower interest rate—maybe 0.10% to 0.20% less. That could save you a few hundred dollars over a few years. But that small upfront saving comes at the cost of flexibility: Breaking your mortgage early? Expect a massive penalty. Want to make extra payments? Often not allowed—or severely restricted. Need to move and take your mortgage with you? Not likely. Thinking about refinancing? Good luck doing that without a financial hit. Most people don’t plan on breaking their mortgage early—but roughly two-thirds of Canadians do, often due to job changes, separations, relocations, or expanding families. That’s why flexibility matters. So why do lenders even offer no-frills mortgages? Because they know the stats. And they know many borrowers chase the lowest rate without asking what’s behind it. Some banks count on that. Their job is to maximize profits. Ours? To help you make an informed, strategic choice. As independent mortgage professionals, we work for you—not a single lender. That means we can compare multiple products from various financial institutions to find the one that actually suits your goals and protects your long-term financial health. Bottom line: Don’t let a shiny low rate distract you from what really matters. A mortgage should fit your life—not the other way around. Have questions? Want to look at your options? I’d be happy to help. Let’s chat.

Bank of Canada Rate Announcement Jan 28th, 2026

By James De Vuyst • January 28, 2026
Bank of Canada maintains policy rate at 2¼%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario January 28, 2026 The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The outlook for the global and Canadian economies is little changed relative to the projection in the October Monetary Policy Report (MPR). However, the outlook is vulnerable to unpredictable US trade policies and geopolitical risks. Economic growth in the United States continues to outpace expectations and is projected to remain solid, driven by AI-related investment and consumer spending. Tariffs are pushing up US inflation, although their effect is expected to fade gradually later this year. In the euro area, growth has been supported by activity in service sectors and will get additional support from fiscal policy. China’s GDP growth is expected to slow gradually, as weakening domestic demand offsets strength in exports. Overall, the Bank expects global growth to average about 3% over the projection horizon. Global financial conditions have remained accommodative overall. Recent weakness in the US dollar has pushed the Canadian dollar above 72 cents, roughly where it had been since the October MPR. Oil prices have been fluctuating in response to geopolitical events and, going forward, are assumed to be slightly below the levels in the October report. US trade restrictions and uncertainty continue to disrupt growth in Canada. After a strong third quarter, GDP growth in the fourth quarter likely stalled. Exports continue to be buffeted by US tariffs, while domestic demand appears to be picking up. Employment has risen in recent months. Still, the unemployment rate remains elevated at 6.8% and relatively few businesses say they plan to hire more workers. Economic growth is projected to be modest in the near term as population growth slows and Canada adjusts to US protectionism. In the projection, consumer spending holds up and business investment strengthens gradually, with fiscal policy providing some support. The Bank projects growth of 1.1% in 2026 and 1.5% in 2027, broadly in line with the October projection. A key source of uncertainty is the upcoming review of the Canada-US-Mexico Agreement. CPI inflation picked up in December to 2.4%, boosted by base-year effects linked to last winter’s GST/HST holiday. Excluding the effect of changes in taxes, inflation has been slowing since September. The Bank’s preferred measures of core inflation have eased from 3% in October to around 2½% in December. Inflation was 2.1% in 2025 and the Bank expects inflation to stay close to the 2% target over the projection period, with trade-related cost pressures offset by excess supply. Monetary policy is focused on keeping inflation close to the 2% target while helping the economy through this period of structural adjustment. Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today. However, uncertainty is heightened and we are monitoring risks closely. If the outlook changes, we are prepared to respond. The Bank is committed to ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is March 18, 2026. The Bank’s next MPR will be released on April 29, 2026. Read the January 28th, 2026 Monetary Report