Mortgage 101 – Merry Debtmas

Dan Ahlstrand and Clinton Wilkins discuss Merry Debtmas, urging consumers to review their finances and consider refinancing to lower borrowing costs.

Dan Ahlstrand
Welcome back to a brand new edition of Mortgage 101. For 2026, I’m Dan Ahlstrand in the studio here with our good friend and mortgage guru, Clinton Wilkins. Is it too late to say Happy New Year?

Clinton Wilkins
Oh, I’m still saying Happy New Year all over the place. It’s barely 2026.

Dan Ahlstrand
Did you get some time away? I had a great holiday.

Clinton Wilkins
I was actually away for three weeks. But Dan, when you’re self-employed, you’re not really away. I was clicking on my computer, and let me tell you, there’s been a new show out, and it’s not a real estate show, and it might not even be a hockey show, but everybody’s talking about it.

Impact of “Heated Rivalry” Show

Dan Ahlstrand
Heated Rivalry, right? And there’s a very strong local connection to that show.

Clinton Wilkins
Yes, which is so cool. We love self-employment, and I love it when small businesses, and the author is a self-employed person, are doing really, really well. The interesting thing about the show (and I’m sure a lot of our listeners have watched), there’s a lot of very interesting and cool real estate in the show, and they actually make a lot of jokes about being a landlord and owning real estate. So it’s a little bit of a fun connection.

Dan Ahlstrand
And it’s a very interesting and maybe controversial premise, because it talks about something that just doesn’t get talked about in the hockey world.

Clinton Wilkins
I think we talked even before the show where I can’t name one out player in the NHL, and I don’t think it’s ever happened. I know the NFL has.

Dan Ahlstrand
It’s an important conversation to have, and sometimes it takes a show like a Heated Rivalry to get that discussion in front of people’s eyes.

Clinton Wilkins
Yeah, I think so. And, just to bring it all together, it’s one of these things that, as divided as Canadians, Americans, people around the world are, this is one thing that I think kind of brought everybody together. And, it was so interesting that it kind of happened at the holidays, like during that Christmas season. I think it was a good way to kind of end the year and go into 2026. I’m feeling very positive. Not that I wasn’t feeling positive before. I’m a very optimistic person. But I think it just kind of created that buzz that everybody needed.

Dan Ahlstrand
Everybody’s beyond the holiday season now, Clinton, and we’ve talked about this earlier in the month on the talk show; there’s that long build-up to Christmas. The lights go up, and then the tree goes up, and then you get all the pressure of getting all the gifts done, and then it’s a long build, and then it’s over in a flash. Then you’re left with the empty boxes and thinking about next year and the bills.

Clinton Wilkins
Well, here’s the thing, I didn’t need to do that because I was away, but certainly when I got home, let me tell you, those bills were rolling in.

Dan Ahlstrand
And we know that December and Christmas time is probably one of the most debt-filled times, because people try to give as much as they can and pay the bills later, so to speak. And that’s why we call this edition of the program Merry Debtmas.

Post-Holiday Financial Realities

Clinton Wilkins
Yeah, we’ve kind of coined this phrase. Merry Debtmas might not be a real word, but that’s a word that we’ve been using in our business for years, and it’s really that reality check that consumers need in January. We go through November, it’s Financial Literacy Month. Maybe we get a little bit loose in December, and we’re spending beyond our means. But then, when January comes, you have to kind of meet that maker. As much as we can kind of say, you have to open your bills. You have to see what you owe, and it’s a great time to take control of your finances.

Dan Ahlstrand
We talked about it during Financial Literacy Month, how debt is one of the factors in our long-term planning. When it comes to getting that mortgage, buying a house or getting somebody enrolled into university education, it’s important to maintain good debt.

Importance of Financial Health Resolutions

Clinton Wilkins
And the majority of Canadians are in debt. And to some level, it doesn’t matter how financially savvy you are; it doesn’t matter how much money you make; you have some type of debt. Typically, a mortgage is debt. That is typically what we consider a good debt. People have home equity lines of credit, they have unsecured lines, they have credit cards, they have car loans, they have car leases, and they have student loans. There’s a variety of different types of debt products that people have, good, bad or ugly, that kind of make up people’s financial health, and it’s a great time in January to review exactly where you’re at and make the best kind of decisions to go into the full year. Everybody likes to start January, and we talk about resolutions, right? It’s usually about health. It’s usually about wellness and weight loss. Let’s talk about financial health as something that we should be making some resolutions about.

Dan Ahlstrand
I think there’s only a small portion of the population that can be debt-free all the time. I mean, there’s a very small number of people who can lay cash down and buy a house or buy a new vehicle. I certainly can’t.

Clinton Wilkins
I think it’s healthy to be able to take on some of this indebtedness into someone’s household, but you need to be financially aware enough and make those decisions on where that line is and not cross it. Make sure that you can make your payments on time. Credit cards are really made to be paid off every month. If you can’t pay it off, you should be using a different vehicle to then pay it, like if it needs to be longer term, whether that’s an unsecured line, or if you own a home, maybe a secured line is the right decision. But credit cards themselves, that 20% interest that was never, ever designed when credit cards first started, 40 plus years ago, that was never designed to be a long-term debt vehicle, but Canadians have a very high tolerance to indebtedness. And that’s one thing that can be very challenging for people. It’s just even making their minimum payments, and the amount of interest that people pay. It can be very hard to then focus on paying down your debt. So, for us, one of the things that we talk about a lot in January and we’re through our Merry Debtmas campaign. We have 40,000 plus clients, we really talk to them about refinance, and does refinance make sense for them? Not everyone owns a home, so you can’t refinance if you don’t own one, but if you do own one, you can refinance up to 80% of the market value of your home. And from that, we’d have to pay off any of the secured credit cards, or secured creditors, like a mortgage, home equity lines of credit, or any type of combo products like that, and then people would have access to the difference. So, just to use quick math, assume a home in Halifax is worth $600,000 because that’s an average value. You can do a new credit facility up to 480,000, less your secured creditors. So, mortgage, home equity, line of credit, the difference is what you would have available to then use, whether that’s for investment purposes, whether that’s for renovations, or whether that is to pay out other unsecured creditors.

Dan Ahlstrand
Is there a situation where that’s not a good idea? Is it because you have too much debt, and you’ll end up putting yourself further back by refinancing your mortgage?

Clinton Wilkins
I think if you’re paying out unsecured debt, the debt is the debt is the debt, right? So I’ll say that again, doing a refinance is not creating more debt, especially if you already have it. It’s putting it into the best debt vehicle that will lower your borrowing costs to enable you to then start to repay. Personally, I’ve been doing this for 20 years. There is nothing more satisfying than seeing a client pay down their mortgage or even have their mortgage paid off. I love it. That doesn’t help me financially as a mortgage broker, but it’s very rewarding to see clients pay down, so doing a refinance and paying out unsecured debt is not creating more; it’s really putting it into a more effective vehicle to enable people to pay down. But the challenge is, not everyone has the equity, has the income or depending on what their credit matrix is, maybe they can’t refinance for enough to put them in a better situation. So again, Dan, I’ll say every file is like a snowflake. We’re looking at their income, we’re looking at their assets, and we’re looking at their credit and we just want to make sure that we’re putting everyone in the best possible financial position.

Home Equity Lines of Credit (HELOCs)

Dan Ahlstrand
Obviously, the most important conversation, if this is something that you’re considering, if you’re looking at your your January bills and your credit card is maxed out, and your line of credit is showing red, and you’re wondering how to do this is to have a conversation with a mortgage broker to see if this is the right fit for you.

Clinton Wilkins
Specifically, if you have some equity in your home. So if you bought your home in 2020 or before, chances are you have some equity. The people who bought their home last year may not. It really depends on what equity people have. If a refinance is going to make sense, it will say that the majority of the folks who bought their home in 2021, 2020 or before have quite a bit of equity in their homes. Dan, and even for the people who are not looking to increase their mortgage amount, we are changing people’s products a lot, and I can say there’s been a shift back to home equity lines of credit. It was a product that was so popular, I would say in the 90s and early 2000s, people talked about the Smith maneuver and using these HELOCs. And then the popularity kind of twindled. But I can tell you, they’re definitely back on the upswing, and we’re seeing more and more consumers for us, we typically won’t do like a standalone HELOC, but we’ll do a combo product where it might be a mortgage and a home equity line together, and those types of products are certainly more popular today, and I would even say maybe five years ago, just because most consumers have more equity now than they did back then.

Dan Ahlstrand
Is it spreading it around? Is the basic premise here that you’re taking advantage of all of the tools that are available to you?

Clinton Wilkins
I think it’s more of a take advantage of tools, and it’s taking advantage of the lowest cost of borrowing that you can have. If you can bring down your borrowing cost, then when you’re making a payment, your payments are actually going to principal, and that’s what consumers want when they’re trying to pay down their debt. The challenge is that when you’re trying to pay down your debt, it’s on credit cards and even on unsecured lines. The interest rates are so high that a lot of these payments that people are making are going to interest rates.

Dan Ahlstrand
We’re going to take our first break here on this January edition of Mortgage 101. Clinton Wilkins and Dan Ahlstrand, stick around more. Merry Debtmas, when we come back.