Getting into the Housing Market

Tracy Head • July 28, 2023

Whether it is your first or subsequent venture into the housing market, it will likely look a bit different than it did even a few years ago.

Rising interest rates and changing qualification rules mean you may have to wait a bit longer, or rely on help from family.

This week I had a call with a young lady that is looking to buy a home in the Okanagan. She said she has been saving her down payment but feels like it will take a while to save enough. She also said she needed some help trying to figure out a game plan.

What I most appreciated about the call was her realistic approach. She said she felt it would be two to three years before she would be ready to move forward with a purchase and wanted to make sure she was doing everything she could to get ready.

The same day I sat in on a learning session about the First Home Savings Account (FHSA). Starting April 1, 2023 Canadians can contribute up to $8000.00 per year to a maximum of $40,000.00 to be used towards the down payment on a home. The contributions are tax deductible.

Who can open an FHSA? You must be:

 Between 18 and 71 years of age
 A resident of Canada
 Considered a First Time Home Buyer

How do you open an FHSA?

Contact any FHSA issuer. This can be a bank, credit union, or a trust or insurance company. They will be able to advise you as to what type of savings or investment products your money can be invested in. The funds in your FHSA can be combined with funds withdrawn from RRSPs under the Home Buyers Plan (HBP) to be used towards your down payment. The total between the two would be $75,000.00 or $150,000.00 per couple.

These may seem like pie-in-the-sky numbers, but even leveraging the plans for part of those funds may help significantly with the purchase of your home. Saving your down payment can be a real challenge, particularly if you are renting. The cost of living is

increasing and making it more difficult to tuck money away. When life happens it can be tempting to dip into your down payment savings.

A significant advantage to opening a FHSA or contributing to your RRSP is that it is not so easy to dip into your down payment savings. Perhaps an even more significant advantage is that your contributions are tax deductible which ultimately helps your savings plan.

Check out highlights of the First Home Savings Account here.

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Tracy Head

Mortgage Broker

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Early Renewal

By Tracy Head • August 27, 2025

Does an early renewal make sense? 2020 was a very busy year for home buying and mortgages. This means that 2025 is and has been a busy year for mortgage renewals as the majority of clients seemed to choose five year terms in 2020. I’ve had lots of conversations with my own and new clients about whether it makes sense to renew early. Each conversation is slightly different based on client needs and their individual circumstances. Most of the time I suggest that clients stay with their current lenders until their renewal dates because their current interest rates are anywhere between 1.6 per cent and 2.79 per cent. If you don’t need to make any immediate changes it makes the most financial sense to stay put until your term runs out. We can start the process of either switching or refinancing mortgages four months ahead of your renewal date and lock in a rate for you. As a generalization, when people ask about doing a straight switch (not adding any money to their mortgage) I will do a survey of what interest rates are available so they can go back to their lender to try to negotiate a great rate. Time and time again I’ve worked with clients on switches for them to cancel at the last minute as their current lender finally sharpens the pencil rather than lose the client. This is why I always try to help people negotiate with their current lender rather than put everyone through the work of having a new mortgage approved. If clients are wanting to add money to their mortgage to pay out consumer debt or pay for home renovations that changes things a bit. Some lenders are more aggressive with their refinance rates so it makes sense to make a move. Another situation has popped up this week that has had me crunching numbers for multiple clients. One of my favorite lenders came out with a quick-close rate special that is pretty hard to pass up. The fine print is that the new mortgage has to finalize within thirty days. I have been working on a refinance at renewal for clients that is set to close at the beginning of November. I took a look at how their current lender calculates the payout penalty when they are this close to renewal. It turns out they charge daily interest instead of a three-month interest penalty or interest rate differential. So I did the math. If we pay out early to take advantage of this great interest rate their payout penalty is around the $1000 mark. Over the term of the new mortgage they will save approximately $5500 in interest cost and their monthly payment will be about $85 per month less. Even after they pay out the penalty to move a bit early they will still be $4500 ahead over the term of their mortgage. This is one of the few times I’ve recommended that it makes sense to move forward ahead of the renewal date. If you have a renewal coming up over the next few months I’d say it’s a good idea to connect with your mortgage person to look at what rates are available now and figure out whether it makes sense to consider making a move sooner rather than later. Lenders will pop up with rate specials from time to time so it is worth having your mortgage professional keep an eye open for you as your renewal date comes closer. It may just save you a significant amount of money.

Purchase Checklist

By Tracy Head • August 11, 2025

Last week was a vivid reminder of the importance of finalizing your home insurance as soon as you are within thirty days of your closing date on a home purchase. I had three clients with purchases closing on the Friday after the fire broke out in Peachland. All three had to push their closing dates back because they couldn’t get their insurance in place due to an active fire. Thinking about this led me to consider a few of the key steps involved when purchasing a home. I’ve written about this in prior columns but I feel a reminder is never a bad idea. There are a few areas of crossover between the guidance your realtor gives you and the advice you receive from your mortgage person. When your realtor writes your purchase contract there are some standard conditions that are added to the agreement. You will generally see the following: Subject to the purchaser obtaining satisfactory mortgage financing Subject to the purchaser having a home inspection conducted Subject to the purchaser arranging home insurance Subject to review of strata documents if applicable Subject to the sale of the purchasers’ current home if applicable The financing end is obviously our responsibility. I do double-check with my clients that they have taken care of the other conditions. Most realtors are great at offering support to their clients with respect to addressing the relevant conditions. In some cases I feel like realtors tell clients the steps they need to take but my guess is that the whole process can feel or become overwhelming. Before I give my clients the ok to remove their financing subject I confirm that they have taken care of the home insurance as this is one piece they sometimes miss. If you are going through the process of purchasing a home my suggestion is keep a notebook (aging myself by suggesting a paper version) or a list on your phone to keep track of your must-do tasks as you go through the process. I have a checklist that I’m happy to share if you would like a copy.