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Creating Curb Appeal, part 2

Are you looking to catch someone's attention when selling your home?
Are you looking to buy a unique home that stands out against the rest?

Halifax, we have another sunny weekend on the horizon, and what better way to spend it than being outside!  Grab your sunglasses, sunscreen, paintbrush and your partner in crime, because you'll be taking over your own front door! 


It's so important to figure out what type of paint you will need before you start buying. Starting with your inspirations and your home's surroundings (like we discussed in the previous blog) are some great ways to get yourself prepared before heading into your local home improvement store!  Staying up-to-date with design ideas and colour trends will give your house more oomph from the street (especially if Google Maps is updating your street).

However, trying to compete with design-industry professionals can be exhaustive at times, so go with your heart and pick the best way to accent your home from the outside in.  Grab some attention Halifax, call The Bagogloo Team and let them know if you're looking for a home with curb appeal, or selling your home that already has curb appeal, because (as you know) Experience Pays!

Creating Curb Appeal, part 1

Are you looking to catch someone's attention when selling your home?
Are you looking to buy a unique home that stands out against the rest?


It doesn’t matter which category you fall into because you will see a plethora of homes every day throughout Halifax, but you will only remember aesthetically welcoming homes that have strong curb appeal. Making your newly purchased or (old) on the market home sexy can be achieved more simply than you think!

  • Adding some pops of color can enhance the exterior of your home. The exterior of your home could require a fresh coat of paint, or just the trim—so when it comes to deciding on what colors to choose, build a color scheme that best suits your landscape and surroundings (for example: vintage and historic, modern and urban, etc.).
    • Note: If your home receives a great deal of direct sunlight, big and bold colors will appear more vibrant; if you are trying to achieve a more neutral or traditional style, choose colors with grey undertones. Try to save the brighter colors for accents like furniture and accessories.
  • Grab your visitor's attention at the entrance (first impressions count). Paint the front door a strong color and compliment it with a classic style door-knocker to give your home some "wow factor"! Freshen up (or replace) the railing and add small accessories to the interior or exterior like vases or flowerpots, flowerboxes underneath the windows or an antique lamp. These are just a few great ways to achieve an energetic vibe on the way into your home.

Home renovations can be both minor and major, but one of the most important things to remember is to be prepared! If your renos go to plan, you will create house envy among your neighbors! For more information on what types of exterior paint and color selections to choose from when painting your front door, please follow this link:

Stay tuned with The Halifax Real Estate Blog & The Bagogloo Team for more tips and tricks about giving your home some quality curb appeal, because Experience Pays.



If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at or call 902-830-9006.



As of late, Halifax's temperatures have reached record-breaking highs--32 degrees C, with humidity making it feel like 40 degrees and up! So what's our secret, besides melting to the floor?

Some would suggest large fans and air conditioning units are the answer, but the costs to run those just stay moderately cool could drive your electricity bills through the roof ... or through other seams and leaks! Proper insulation could remedy the climate of your "uninhabitable habitats". 

Better insulation offers more cooling
Sometimes homeowners may notice that they have especially hot or cold spots in their homes. While they may acknowledge the inconsistency these areas afford, people may not know that they can do anything about these instances. The best way to avoid experiencing fluctuations, excessive cooling bills or using an oversized A/C unit is to upgrade to spray foam throughout the house, which help seal walls and cut drafts around doors and windows, making it difficult for conditioned air to seep out of the house when the A/C is running.

20-dollar-bill-house[1]One of the biggest concerns for homeowners should be whether they’re using all the right products in their cooling systems, a situation that can easily crop up when adding a cooling element after initial construction has been completed. Home renovations are particularly susceptible to these areas of difficulty, since older construction buildings are often not designed for air conditioning and newer kinds of HVAC delivery.

Minding your materials
Specifically, homeowners should be aware that the tools they purchase to cool their homes are not always necessarily the best suited for their houses. The source wrote that a study of HVAC solutions in consumer homes found that A/C units are often oversized by 24% on average, though it’s not unusual for people to buy air conditioners that are as much as 100 times larger than what they need for the size of the spaces they’re servicing.

This can result in significant cooling costs for houses of all kinds. Using spray foam insulation makes it easy to keep up with climate demands without running up major electricity bills, making it an ideal solution for homeowners in parts of the world where extreme heat or changes in weather can otherwise result in rapid transitions from heating to cooling needs.

What’s more, this can help some residents reduce the overall size of their air conditioner units, making their homes more green-friendly and cost efficient. By cutting the ability of cold air to escape or warm outdoor air to leak in, homes can greatly reduce the frequency and duration of time for which air conditioners need to be run in order to produce a comfortable indoor environment. Remember to target areas like crawl spaces, garage ceilings, floor joists and areas that can be easily overlooked.

Stay cool Halifax. We deserve the heat, but not the bills to stay comfortable inside.  Whether you're looking to make the big move to Halifax or you're looking to upgrade your current home locally, reach out to The Bagogloo Team--they can show you how Experience Pays.


If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at or call 902-830-9006.



Ottawa, ON, June 17, 2013 – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS® Systems) of Canadian real estate Boards and Associations in 2013 and 2014.

Most Canadian housing markets have been evolving as anticipated since CREA’s last forecast released in March. National sales activity has held fairly stable since it moderated last August in the wake of changes to mortgage lending rules and guidelines.

Although sales in the first quarter of 2013 remained virtually on par with those in the fourth quarter of 2012, the monthly sales trend improved toward the end of the first quarter and accelerated in the second quarter.

National sales activity is now forecast to reach 443,400 units in 2013. This represents a decline of 2.5 per cent from 454,573 sales in 2012, and marks an upward revision from the previous forecast decline of 2.9 per cent. Alberta and Prince Edward Island are the only provinces where sales are projected to post an annual increase in 2013, with declines in other provinces reflecting the impact of more restrictive mortgage lending rules and guidelines.

“All real estate markets are local, with prospects that differ by region and community,” said Laura Leyser, CREA President. “For that reason, buyers and sellers should talk to their REALTOR® about the housing market outlook where they live or would like to live.”

CREA has also revised its forecast for national activity in 2014 to 464,300 units, representing a rebound of 4.7 per cent and reflecting a slow but steady improvement in activity. This still leaves national activity one-tenth of a percentage point below its 10-year-average, with activity remaining below levels recorded in the first half of 2012.

British Columbia is still forecast to see the strongest sales increase in 2014 (+9.9%) compared to a weak result in 2013. Most other provinces are forecast to post gains in the range between two and six per cent, reflecting moderate economic, job, population, and income growth and low mortgage interest rates.

In contrast to sales, average prices have held firmer than expected. The national average home price is now forecast to rise by 2.1 per cent to $370,900 in 2013.

The forecast increase reflects a compositional shift in the average price calculation. Steep declines in sales activity in Greater Vancouver and Greater Toronto during the second half of 2012 weighed heavily on average prices in British Columbia, Ontario and nationally at that time. Since then, their share of national sales activity has improved and their weight in the national average price calculation has risen. Ontario, British Columbia and national average prices are likely to rise above year-ago levels during the second half of 2013 as a result.

The upward revision to the average price forecast also reflects stronger than previously expected price growth this spring in other housing markets across the country. Average price gains in 2013 are projected to be strongest in Alberta, Saskatchewan, as well as Newfoundland and Labrador, with annual increases of between four and five per cent. At 3.6 per cent, average price growth in Manitoba is also forecast to exceed the national result.

The national average price forecast for 2014 has also been revised upward to $377,700 in 2014, an annual increase of 1.8 per cent. As in 2013, part of the increase reflects an expected increase in the share of total sales among relatively more expensive provincial housing markets and a further increase in their weight in the national average price calculation.

At 3.4 per cent, Alberta is forecast to post the biggest average price increase in 2014, with gains in Newfoundland and Labrador, Saskatchewan and Manitoba running just ahead of inflation. Average prices in Quebec and New Brunswick are expected to be largely flat in 2014, with other provinces posting gains in the range from 0.5 to 1.5 per cent.

JustSold“Canadians remain confident about the value of home ownership,” said Gregory Klump, CREA’s Chief Economist. “Job market trends and low interest rates remain supportive for Canada’s housing sector, so we remain upbeat about prospects for sales and average prices this About The Canadian Real Estate Association

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.


Owning a home is a keystone of wealth — both financial affluence and emotional security.     ~ Suze Orman


Cartoon-3-pigsIf you are interested in buying or selling a home, don’t trust just a nyone with your  investment—trust the best!  The Bagogloo Team of RE/MAX nova are here to take care of you.  With a combined experience of 44 years, we know how to ride the trends to get the best possible “bang” for your “buck”!  If there is one thing we’ve learned, it’s that EXPERIENCE PAYS.



If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at or call 902-830-9006.


I have received a number of questions and emails regarding what water quality tests should be done from Home Inspectors, Realtors representing their buyers and sellers listing their properties, and from the general public who have water obtained from dug wells, drilled wells, roof water cistern collection systems or drawing water from lakes, rivers and streams. 

The basic tests I recommend to my clients are:

* total coliform bacteria, E.coli bacteria by MPN method (most probable number) besides telling you if the bacteria is present, it also gives a bacteria count which is helpful in determining the extent of the bacterial contamination

* RCAP-MS which includes arsenic and uranium along with chemicals that can cause taste, odour, colour and staining challenges to the water that can be expensive to treat. This link to the government website provides an example of some of the chemicals tested in this package

I’ve attached some information sheets that are aimed at homeowners along with local water testing labs below. I hope you find this helpful.

Nova Scotia Environment also has lots of information on their website:


Local Water Testing Labs

AGAT Laboratories, Unit 122, 11 Morris Drive, Dartmouth, phone: 902-468-8718, Toll Free: 1-888-468-8718


Environmental Services Lab
Queen Elizabeth II Health Sciences Centre 5788 University Avenue Halifax, phone: (902) 473-8466
web: Environmental Services Laboratory


Maxxam Analytics Inc., 200 Bluewater Road, Bedford, toll-free: 1-800-565-7227, phone: (902) 420-0203


We received this email and felt it had such value that this something we would like to share with you. Feel free to contact a member of The Bagogloo Team to help you with any of your real estate needs. We would like to thank Dean Walker for sharing this information with us.


If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at or call 902-830-9006.


How the financing game has changed.

Decoding the mortgage market


More and more people are looking at investing in Real Estate as a retirement plan. If you are looking at entering or expanding your real estate investments this article helps clarify and prepare you. Your real estate agent can help you determine what areas and types of investment properties will be right for you, using affordability, maintenance requirements, degree of management involvement as some of the criteria. If you’re not already working with a real estate agent, The Bagogloo Team would be pleased to help you determine if investing in property is right for you, and where best to put your real estate investment dollars.

With a tipsy housing market and the credit crisis still fresh in our memory, regulators and lenders are putting higher-risk borrowers under a microscope. That includes real estate investors.

As a result, it’s now trickier to qualify for a rental property mortgage – especially compared to the days before April 19, 2010. (That’s when federal legislation put an end to insured rental mortgages with less than 20 per cent down.)

So if you are considering a small rental property and need a mortgage soon, here are some things to remember.

You’ll need an ample down payment
If you buy a rental home that you won’t live in, almost every lender in Canada will want at least 20 per cent down. That’s $72,000 on the average $360,000 residential property.

And if you’re purchasing a condo or buying in a “higher-risk” city (like Vancouver), many lenders will want an additional 5 per cent.

Picking the right lender matters more than ever
If you want to be approved, your “total debt ratio” must fall within lender limits. At the risk of oversimplifying, your “total debt ratio” is generally your total monthly expenses divided by total monthly income from all sources, including rentals.

That sounds simple, but it’s not. A borrower’s ability to qualify often depends on how much of her rental income the lender recognizes.

You’d think that if a tenant pays you $1,000 a month, you could add that $1,000 to your income when qualifying for a mortgage. But in many cases, lenders will credit you with only 50 per cent of the rental income you receive, making it harder for you to qualify.

In all, there are four ways that lenders calculate your debt ratios, which are beyond the scope of this column. Suffice it to say, any competent mortgage adviser can point out lenders with borrower-friendly methods.

And there’s one last thing to keep in mind about debt ratios. Different lenders have different limits. Some lenders let you have a 42 per cent total debt ratio. Most others permit just 40 per cent. That extra 2 per cent can make a big difference , especially for folks with mortgages on multiple properties.

The moral here is that the lender you pick can have a major impact on your approval chances. If your qualifications aren’t perfect, you’ll need a lender that is open to some common sense underwriting exceptions, and those are getting harder to find.

Multiple rental properties = headaches
Many lenders prohibit you from owning and/or financing an unlimited number of rental properties.

Even if they don’t explicitly forbid it, the inability to count all your rental income in debt ratio calculations can make approvals challenging, and sometimes impossible. In fact, it often forces people with big rental portfolios to renew mortgages with their existing lender at unfavourable rates and terms.

So if you plan to finance a small rental empire, find a broker that has several clients with 10 or more rental properties. They’ll need that experience to help you know which lenders to use, and in what order.

The key to remember is that lenders with the best rates often have the tightest rules. If you want the best terms, you’ll want to use the more restrictive lenders early in your empire building and save the flexible ones for last. That ensures you don’t run out of competitive lenders when your portfolio gets big.

More paperwork
A few years ago, it was easier to use an appraiser’s estimate of a property’s rental income in lieu of a signed lease. Today, more and more lenders want to see a signed written lease or other proof of rental income.

It also helps to have two years’ tax returns available. That’s because using tax returns to show your net gain or loss on a property can make it easier to qualify, as opposed to using other standard debt service calculations.

The rate is often secondary
Rental mortgages are higher risk so many lenders now charge rate premiums.

Fortunately, you can still find lenders that extend their best rates on investment financing. The question is, do they offer the other features you need?

In keeping with supply and demand, the most flexible mortgages usually cost more. That’s especially true for investment property financing. Be prepared to pay a little extra if you need a lender that satisfies more than a few of these criteria:

  • has highly flexible rental income rules
  • allows you to carry a greater debt ratio
  • lets you put a property in a company name for liability protection
  • lets you finance more than four or five properties
  • doesn’t impose a minimum net worth requirement
  • allows 30– to 35-year amortizations to maximize your cash flow
  • lets you prove rental income with “market rent” appraisals
  • allows a gifted or borrowed down payment
  • allows you to add a second mortgage
  • will lend on large mortgages (e.g., $750,000+)
  • has a low minimum credit score (e.g. 600 versus 650)
  • allows rental income from suites that don’t conform with current municipal bylaws
  • provides cash back (sometimes handy for improvements and closing costs)
  • allows you to add a vendor take-back mortgage (this is where part of your purchase is financed by the property seller)
  • offers a line of credit with your rental mortgage
  • pays for your switching fees (this is far less common with rental mortgages than it is for regular mortgages)

Choose your broker carefully
If you want the best rental rate and most flexibility, an experienced no-fee broker is the way to go.

Rental financing is truly a specialization and probably only one in 10 mortgage professionals are actually proficient at it.

Rick Robertson, founder of the lender comparison firm Mortgage Mentor, says one way to screen brokers is to ask how many properties they’ve financed in the last year. If the number is less than 10 or 15, find a more experienced broker.

And Mr. Robertson adds, “Deal with a broker that uses a lot of lenders. Each lender has its own niche and no two lenders in Canada have the same rental policy.”

Robert McLister Special to The Globe and Mail

Published Monday, Dec. 10 2012, 5:00 AM EST  

Robert McLister is the editor of and a mortgage planner at VERICOintelliMortgage. You can also follow him on twitter at @CdnMortgageNews.


If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at or call 902-830-9006.


How to decide what is best for you



As a professional Real Estate Team that is “Passionate About Service” we will take the time needed to help you list your home or find the perfect home for you! This article will help you decide what steps you will want to take when deciding to sell or buy.

Homes are rarely, if ever, one-size-fits-all. As your life changes, so can your housing needs. At some point, the big question arises: Should we stay or should we go?

A layout that's spacious and convenient to a first-time buyer can seem cramped and congested by the time you add kids, pets or a home office to your life. Whether to sell or to stay put depends on many factors, both financial and emotional. Consider these key questions before staking the "For Sale" sign.

Will your current home fit your changing lifestyle?

"A new job, a growing family, an empty nest — these are a few of the most common triggers for moving," says Sheila Johnson, a TD Canada Trust Mobile Mortgage Specialist based in Toronto. "And financial priorities are most often changing right in step with household needs, so it makes sense to look at your whole picture with respect to housing and financing costs," she says.

Could renovation be the answer? 

If lack of space is your biggest concern, options may include finishing the basement or attic, adding an extension or reconfiguring a floor plan to suit your needs. Or, if it's a change of scene you're looking for, think about whether an updated décor, new appliances or finishes would be enough to help you fall in love with your dwelling all over again. "The equity you've already built in your home may be able to help secure financing for the renovations you want," says Johnson.

 Would it be more cost-effective to renovate or move?

It could be cheaper to buy your dream home ready-made rather than create it, depending on the features you're looking for. Visiting open houses that meet your wish list, and then comparing those prices with what you'd have to spend to get similar results in your existing home, may prove helpful.

What’s the market like in your area?

When considering whether or not to put a home up for sale, a market analysis may be a good early step to take. The biggest factor in your home's sale could be the market conditions in your neighbourhood — even on your particular street — compared with other homes. Your professional real estate agent should be able to help you with these comparisons.

How attached are you to your neighbourhood and your neighbours?

Sure, you'll plan to keep in touch, but moving away from a beloved community can be a big change for family members. How much do you each rely on your neighbours and local amenities like schools, churches, libraries and shops?

Are you willing to take on a new mortgage?

Stepping up the property ladder can be a way to build more equity for the future, while downsizing can help you work toward becoming mortgage-free sooner. "Mortgage options aren't 'one-size-fits-all' today," says Johnson. "While homeowners might be focused on the property search, we try to look for financing ideas geared to individual goals and circumstances."


If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at or call 902-830-9006.


CTV’s Jamie From The Marilyn Denis show has some useful tips for home buyers

  • Consider your annual household income. This is a key factor when determining how much of a mortgage you can afford. In addition to calculating your annual household income, consider any income changes that may impact your ability to make your payments. For example, if there are currently two major income sources within your household, would you still be able to afford your mortgage if one was removed? What if a child comes into the picture and your partner decides to become a stay-at-home parent? Consider all factors before deciding.
  • Consider your down payment. Currently, you are required to have at least a 5% down payment when buying a house. The size of your down payment is one factor in determining the size of mortgage you can afford.
  • Consider your debt. When determining “How much can I afford?” one of the other important factors to take into account is the amount of debt you currently have. The lower your debt-to-income ratio, the more money you’ll likely have to put towards your mortgage. In addition, your debt level will also help to determine how large of a mortgage you will qualify for.
  • Consider your amortization period. If you are simply trying to keep your regular mortgage payments low in order to comfortably fit the payment into your budget, you will probably want to apply for a mortgage with a longer amortization period. However, if you don’t mind a somewhat larger regular mortgage payment in order to save money on interest in the long run, you may want to consider a shorter amortization period.
  • Consider your closing costs. Closing costs, such as home inspection fees, appraisal fee, property survey, land transfer tax if applicable and legal fees are an often overlooked expense that will definitely help determine how much money you can afford as a down payment.
  • Consider your property taxes, various types of homeowner’s insurance such as damage, title etc. and additional expenses. Lastly, there are a few additional expenses that may impact how much money you have to put towards your mortgage each month. Expenses like property taxes, homeowner’s insurance and even things like home maintenance should be factored in before making your final decision. These costs are often overlooked but should be considered before settling on the home of your dreams.


We’ve already felt the boost this November in real estate in the Halifax-Dartmouth area, and you certainly can’t miss the optimism in the air, ever since we learned that indeed the Ships WILL Start Here! But this week the TD Bank has announced even more promising news, predicting that Nova Scotia could well be the fourth-best-performing economy in Canada by 2013 with many “ripple-down” positive effects for the rest of the province, and more. John Demont with the Chronicle Herald has the report.

Halifax’s $25-billion naval shipyard contract will single-handedly transform Nova Scotia’s underperforming economy into one of the strongest in Canada by 2013, a TD Bank Group economist predicts.

Talk about a turnaround: this year, before the Halifax Shipyard contract begins to have an impact, Nova Scotia’s economy is slated to grow by a modest 1.4 per cent.

The bank had been expecting the economy to limp along during the next two years. But since the awarding of the shipyard contract, TD is far more optimistic about Nova Scotia’s prospects. So much so that its economics department has taken the unusual step of updating its prognosis for the provincial economy.

“This contract has the potential to offer a better standard of living and more long-term stability for the province,” TD economist Sonya Gulati said Monday.

She added that the contract could help slow the exodus out of Nova Scotia by “making people do a double take as to whether or not they have to leave.”

Gulati predicts the provincial economy will grow by 2.6 per cent in 2013, which is 0.5 per cent more than originally expected.

By the bank’s reckoning, that should leave Nova Scotia — previously dead last in terms of expected GDP growth in 2013 — tied with Newfoundland and Labrador as the fourth-best-performing economy in the land. (Alberta, Saskatchewan and Ontario are expected to lead the country.)

Halifax Regional Municipality, which is forecast to grow by 3.2 per cent in 2013, will do even better than the province.

The shipbuilding job bonanza is already slowly starting. The Irving family-owned Halifax Shipyard has received 2,000 applications since the contract was awarded on Oct. 19.

So far, the yard has hired 50 people, most of them electricians. But at peak, Irving spokeswoman Mary Keith says, 1,000 of the 2,700 people expected to be working at the shipyard should be in white-collar sectors like IT, engineering and finance.

Those numbers don’t surprise TD’s Gulati. She expects the impact of the shipyard contract to ripple through most sectors of the Nova Scotia economy. Under the federal government’s Industrial and Regional Benefits policy for procurement contracts, a substantial amount of the work must go to small- and medium-sized enterprises, which make up the lion’s share of the provincial economy.

She also thinks benefits will spread far beyond the boundaries of the Halifax region. The reason: some 70 per cent of Nova Scotia’s manufacturing companies are located outside Halifax. The same is true of roughly 40 per cent of the province’s research and development, engineering and technical consulting firms.

That’s music to the ears of Bert Lewis, business development manager of Mulgrave Machine Works Ltd. in Mulgrave.

“Our expectation is that there will be such a volume of work that one yard will not be able to handle it,” said Lewis, whose custom metal fabrication company hopes to design and fabricate pressure vessels and tanks for the shipyard contract.

“We are ready, willing and able to support that initiative and look forward to being part of it.”


If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at or call 902-830-9006.


Mark Hurley, AMP - For anyone looking at a variable rate mortgage these days, you will notice the interest rate is not as attractive as it once was. Over the past few months, the banks have reduced their discount from prime rate minus .80% ( 2.20% ) to prime rate minus .10% ( 2.90% ). We may even see the variable rate go to prime plus, like we did during the credit crisis a few years ago.

So, does this mean we should all look at fixed rates now? Not necessarily. Everyone’s situation is different, but it should be a conversation you have with your Mortgage Broker or Banker. Will the variable rate discounts return like they did a few years ago after the financial crisis? No one can say for certain if they will, but in my opinion, if they do they will not be as deeply discounted as they once were.

Rob Carrick with the Globe and Mail explains why the variable rate discounts have all but disappeared:

Variable-rate mortgages are so over.

Go fixed rate if you’re arranging or renewing a mortgage, and think hard about the four-year term. If you take in all the recent developments in the mortgage market, this is the most logical strategy.

Variable-rate mortgages are being sold at the prime rate in many cases right now, which is 3 per cent. The traditional discount off prime? Snuffed out by the banks. They’ve decided they aren’t making enough money from discounted variable-rate mortgages, so goodbye discount for the most part. If you shop around, maybe you’ll get 0.2 of a point off prime.

Now for the fixed-rate alternative. Global economic uncertainty and sluggish growth mean you’ll pay in the area of 3 per cent for a four-year term. This explains why veteran mortgage broker Peter Majthenyi has pretty much given up on variable-rate mortgages.

“For 10 years, I’ve said don’t waste your money on a fixed-rate mortgage,” Mr. Majthenyi said. “Today, I just cannot in good conscience put a borrower into a 3-per-cent variable when for the same rate I can put them in a four-year fixed.”

Mr. Majthenyi calls this a “temporary break” from variable-rate mortgages. He’ll see what happens when today’s four-year terms expire. Meantime, he’s gone from writing about 98-per- cent variable-rate mortgages a year ago to virtually zero now.

Numbers from the Canadian Association of Accredited Mortgage Professionals (mortgage brokers, to put it in English) show that variable-rate mortgages had about one-third of the market as of this past spring, compared to 21 per cent four years ago. Interest in variable-rate mortgages was as strong as ever going into the summer as a result of an uncertain global economic outlook that was expected to keep interest rates low. Variable-rate mortgages could be had back then for 2.25 per cent, which represented a discount off prime of 0.75 of a point. Four- and five-year fixed-rate mortgages would have cost roughly 3 to 3.5 per cent, and that included a strong discount.

This was an ideal environment for variable-rate mortgages. The prime rate, used by lenders as a reference for many of their loans, was low and expected to stay that way for as long as it took for the global economic mess to resolve itself. The prognosis was for continued savings versus a fixed-rate mortgage.

Then came two developments that led to Mr. Majthenyi’s 180-degree turn against variable-rate mortgages. One, the cost of fixed-rate mortgages fell a little as a result of the stock market uproar in August and September. Here’s how that worked: Money flowed out of stocks and into bonds, which set the trend for mortgage rates. When a bond’s price rises, its yield falls. And so, as bond yields moved lower in the late summer, so did rates on fixed-term mortgages.

The second development was a decision by the big banks to clamp down on discounts given to customers going variable. “Bottom line, the banks have been stuck with too many variable-rate mortgages that are not profitable,” Mr. Majthenyi said. “How do they make them more profitable? They have to increase their profit on each mortgage.”

A few mortgage brokerage firms now advertise variable-rate mortgages at 2.8 per cent, or prime minus 0.2 of a point. But Mr. Majthenyi said many of the big lenders he deals with as a broker are now at prime. Looking ahead, he sees the market settling into prime plus or minus 0.2 for variable-rate mortgages.

You may still be able to save a token amount with a variable-rate mortgage over a fixed-rate mortgage with a term of four or five years. But it’s not hard to imagine the advantage of the variable rate disappearing in a year or so as the economy rallies. Then, you could be looking at a long period of rising rates.

So get over any ideas you have about variable-rate mortgages being cheap enough in the here and now to overlook the risk posed by future rate increases. In today’s market, variable-rate mortgages are yesterday’s news.

Finally, a quick word from Mr. Majthenyi for people who are in the middle of variable-rate mortgages with those juicy discounts of days gone by: Enjoy.

“You should hug and love those mortgages to the last possible moment because you’re probably not going to get them again.”


Post courtesy of Mark Hurley,AMP, 902-877-1646 or by e-mail at If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at or call 902-830-9006.