Mortgage 101 – What’s Next for Homeowners?

Clinton Wilkins recaps this year by diving into topics like: Canadians facing renewals, the decision whether to refinance, consolidate debt, or just extend your amortization.

Clinton Wilkins
I’m Clinton Wilkins, and in this special episode of Mortgage 101, we are going to recap the last year of the show. Cast your mind back to early 2025, and things were… different. With so many Canadians facing renewals this year and next, the decision of whether to refinance, consolidate debt, or even just extend amortization has never been more relevant.

Todd Veinotte
Okay, so when you’re renewing your mortgage, is that a good time? That’s probably the optimal time if you’re going to amortize and refinance; that’s probably the best time to do it. Is it

Clinton Wilkins
I think the best time to do a refi is at renewal. It’s not always the time that people do it, though, you know, I think the best time to refinance is the best time for you. And everybody’s situation is different. And I’m going to talk a little bit about the mechanics of a refi. You can refinance conventionally, up to 80% of the market value of your home. Okay? The reasons that somebody may refinance are to consolidate, you know, a consumer debt. Maybe they want to refinance, to pull out some equity, to buy a secondary property or a rental property, put a roof on the house, maybe do some improvements to the property, exactly. And the other reason is maybe for investment purposes. So there’s a wide range of reasons why people refinance. And I think one of the reasons that we really don’t talk about that much is sometimes people refinance just to extend the amortization, to bring down their borrowing costs. That’s a really big one right now, especially with consumers who are coming up for renewal. When we talk about this renewal cliff, I’m not sure it’s going to happen, but 60% of Canadians have their mortgage coming up for renewal this year and next year, and those Canadians are having, typically, if they had a fixed rate and an interest rate that’s lower than where the rates are today. Yes, I do believe the rates are going to go down. Who knows what’s going to happen in the US and how that’s going to impact us? And we need to remember that the fixed rates are tied to the bond market, and the bond market has been, you know, really increasing lately. And the one thing that I’m really watching is the Bank of Canada. We had more decreases last year than we thought we would. But I think we’re going to still see some further decreases this year. You know, our economy is not strong. In Canada, the GDP is low. I’m watching the Canadian dollar, and I’m confident that we’re going to see some more cuts from the Bank of Canada. I think they want to spur some spending from Canadians, and they want businesses to borrow, and they want consumers to borrow, even though consumers are at an all-time high of consumer debt.

Todd Veinotte
What about employment in general? I mean, obviously, people look at whether you’re renewing, if you’re up for renewal, and you want to refinance, you need to consider your employment situation. Employment is important, yeah, huge. Your credit situation as well, right?

Clinton Wilkins
Credit employment is very important. Obviously, the assets are important. The value of the property is important. All of these things come into play. Yeah, we really wanted to understand having some of the strain that we were under.

Clinton Wilkins
Tina, a licensed insolvency trustee and Senior Vice President with MNP Limited, provides us with insights into the myths about bankruptcy and how learning more about your finances is the first step to lifting that weight off your shoulders.

Tina Powell
So when somebody comes to us, we do a pretty detailed assessment of their financial situation, and if their credit situation is not too severe, we can look at sometimes just help them by doing a simple budget fix right reviewing their budget, which may free up some cash. Sometimes they have access to some assets which they can use to pay down debt, or maybe they may be a candidate for a consolidation loan.

Clinton Wilkins
Yeah, and I’ve had some referrals from your office as well. You know, for customers who are refinancing makes sense, and they just don’t think of that even as an option, exactly.

Tina Powell
But for those who you know are more severely indebted that we often will suggest and work with them to do either a consumer proposal or or division one proposal, or a bankruptcy. And when I’m talking about proposals, a proposal basically is a formal debt settlement, right? And it’s a different mechanism than a bankruptcy. But both are legislated under the Bankruptcy and Insolvency Act. These are federal laws, are they? Yes, yes. So both basically are they provide a stay of proceedings, which is a stoppage of collection action and legal action from the creditors. Both are mechanisms or means to pay down a portion of your debt and to discharge your debt. And both offer financial counselling sessions, which can get you on the road to making better financial decisions going forward.

Todd Veinotte
Well, well, do you find that people often have a real sense of relief? I’m sure that you can see that after a session with me, and you should empathetically explain what’s available to them. You might see a weight lifted off.

Tina Powell
To me, I’ve had people tell me that they haven’t slept in years, and even before we actually sign this formal document, they’re already starting to see that there is a light at the end of the tunnel.

Todd Veinotte
Sure. Yeah, amazing.

Clinton Wilkins
Then, in February, we touched on the busy real estate market, and in the spirit of the season, we discussed the love of your home. Is your home simply a place that you live, or is it a financial asset? We explored why treating your home like a business decision can make a big difference, especially when it comes to protecting its value and planning for the future.

Clinton Wilkins
I think that’s where it’s really hard sometimes for people to divide the love for their home and the business for their home. And I think it’s detrimental in some cases. And you know, I may be callous because I’m looking at this all day, every day, but for me, it’s transactional and it’s a business, and the home is often the biggest asset a family has. But some people don’t look, you know, look at the home that it’s an asset, but it really, really, truly is. And there’s so many Canadians that are living mortgage to mortgage or paycheck to paycheck, and you know, that’s really their retirement plan is selling this house and using that money to then invest or live off in retirement, and it can be a really great asset, typically, real estate, at least here in Halifax and Atlantic Canada, has increased. We’ve never had the boom that they might have had in Ontario and BC, but we’re also not suffering right now,w with their values have really decreased. Honestly, the values have gone down. Our prices are continuing to increase, maybe not as fast as they were, you know, the last couple of years. But that’s also healthy. And you know, real estate here typically, is a very safe investment overall, and has been for many years. And I think going forward, just based on the amount of demand we have in our market, it will be a good investment.

Todd Veinotte
But again, I view a home as an asset. I really do, but I think that at the end of the day, if you view it as an asset and a business, a part of your business and your retirement plan and the whole thing. I think that’s smart and prudent.

Clinton Wilkins
I see so many people who are just so focused on getting mortgage-free, mortgage-free, mortgage-free, but yet, sometimes they have a whack a consumer debt, or they’re sitting in this asset that really needs some improvement. You need to protect the asset. If there are some renovations that you want to do, and you’re not that worried about the cosmetic, at least, make sure the envelope of the house is good and secure. When we’re talking about roof, we’re talking about windows, we’re talking about exterior siding. Making sure that is safe and secure. It will protect the asset and also will help improve the value as well. You know, I think that’s something certainly to take into consideration. And I think it would be remiss for us not to mention not everybody loves their home. You know, I think there’s people who are renting that want to get into home ownership. I think there are people that own homes that are looking for a different style of homes, and I think we need to be cognizant of that. And I think there’s going to be a lot of transactions here in 2025 you know, the realtors have been coming out and saying, We think that there’s going to be at least 5% more transactions this year than there was last year. And I can tell you, January has started very, very strongly.

Todd Veinotte
Why do you think that is?

Clinton Wilkins
I think there’s pent-up demand. I think we were in a higher rate environment last year from a mortgage lending perspective, and the rates have started to come down. You know, we’re going to talk in our next segment of some of the uncertainties. Obviously, we don’t want to be doom and gloom. We’re going to talk about what we know right now. But I think there’s going to be more people coming into the marketplace. You know, one thing that you know, and the one thing that we need to be remember, is, as the rates continue to go down. I think there’s gonna be more and more buyers and borrowers enter the marketplace, which will drive up the demand, which means that I think the prices are going to go up this year. We need new construction. Way, way, way more. The one positive thing is we have a lot of apartments coming online, and you’re like, Well, how does that impact people? I want to buy. People who wanna buy a home? Well, homeowners oftentimes think about that little old lady and the little old man. They then have a place to go and move into that home or into that apartment, and that puts that home up for sale. And some of these homes that maybe these older people have lived in for 40 plus years are great homes for first-time home buyers. When I first started doing this 20 years ago, first-time home buyers bought it bought starter homes. But something happened over the last 10 years or so, and so many first-time home buyers have been buying new construction and these beautiful 3000 square feet. Foot homes, the culture shifted, but now the culture is shifting back, I think, primarily because of price and affordability. But first-time home buyers are buying starter homes more and more, so now, again, we need all levels of inventory to start rebalancing. You know, the demand that we have in the market.

Clinton Wilkins
Our 2025 recap is just getting started. Stay tuned to find out more about how the market has changed over the years, our expert insights, and more of this Best of Mortgage 101.