23 Mar

A More Hawkish Fed Was Expected


Posted by: Sharon Davis

A More Hawkish Fed Was Expected

The Federal Open Market Committee (FOMC) met this week for the first time under the chairmanship of Jerome Powell. In a unanimous decision, the Committee hiked the target range for the federal funds rate by 25 basis points to 1-1/2 to 1-3/4 percent. Unlike the Bank of Canada, which has a single objective of targeting inflation at roughly 2 percent, the Fed has a dual statutory mandate to both foster price stability and maximum employment.
U.S. labour conditions remain strong, and the economy continues to grow at a moderate pace. Inflation is still below the Fed’s target despite the rapid decline in unemployment to 4.1 percent. The growth rates of household spending and business fixed investment have moderated from their strong fourth-quarter pace.
In the Fed’s quarterly forecast of economic and financial conditions, policymakers were divided over the outlook for the benchmark interest rate in 2018. Seven officials projected at least four quarter-point hikes would be appropriate this year, while eight expected three or fewer increases to be warranted. This is in direct contrast to market expectations of only two rate hikes this year by the Bank of Canada and is one important reason why the Canadian dollar has fallen sharply vis-a-vis the U.S. dollar in recent weeks, although the loonie did edge upward following the release of the Fed’s decision as the U.S. dollar fell sharply.
In the forecasts, U.S. central bankers projected a median federal funds rate of 2.9 percent by the end of 2019, implying three rate increases next year, compared with two 2019 moves seen in the last round of forecasts in December. They saw the fed funds rate at 3.4 percent in 2020, up from 3.1 percent in December, according to the median estimate.
The median estimate for economic growth this year rose to 2.7 percent from 2.5 percent in December, signaling confidence in US consumers despite recent weakness in retail sales. The 2019 estimate rose to 2.4 percent from 2.1 percent. The 2020 GDP growth continues to be a forecasted 2.0%. Fed officials expect a lift this year and next owing to the tax cuts passed by Republicans in December.
These projections are above the Fed’s estimate for the long-run sustainable growth rate of the US economy of 1.8 percent, a figure that is about in line with the Bank of Canada’s analysis for our country. The tax cut stimulus was introduced to an economy that was already experiencing labour shortages. The Fed estimates the long-run noninflationary level of unemployment to be about 4.5 percent–well above today’s nearly 20-year low of 4.1 percent, suggesting that inflation is likely to rise in coming months.

Dr. Sherry Cooper

Dr. Sherry Cooper

Chief Economist, Dominion Lending Centres

23 Mar

Spring Into Action: Refinance Your Mortgage With the Help of a Mortgage Broker


Posted by: Sharon Davis

Spring Into Action: Refinance Your Mortgage With the Help of a Mortgage Broker

We sprung forward last earlier this month by changing our clocks one hour ahead. For some, their microwave and oven clocks are once again displaying the correct time since the last time we needed to adjust our clocks (in the Fall). Patience is a virtue – except for when it comes time to refinance a mortgage!

The Spring is a busy time for mortgage brokers across the country. We welcome this change in season knowing that we are in the best position to give families mortgages that make sense for them.

This is the time of year that banks begin to send out their mortgage renewal notices. Some people will simply sign the documentation sent over from their bank and take on a new mortgage at the rate the bank has suggested. However, this may not be the best rate for which you and your family can qualify.

What is a Mortgage Renewal?

A mortgage renewal is when the current terms of your mortgage come to an end and you sign on for a new mortgage term.

The time is now to spring into action, up to three months ahead of your mortgage renewal deadline. By shopping around for the best mortgage rate for your financial circumstances, you may save yourself thousands of dollars. To do that, you may want to consider working with a seasoned professional – your local mortgage broker.

The benefits of working with a mortgage broker to help find a mortgage solution that works best for you are three-fold.

A mortgage broker gives you a second opinion.
While your current mortgage lender claims to have your best interest at heart, getting a second opinion on your financial situation does not hurt. There may be new options and products available for you that your current lender is forgetting or unable to offer. A second opinion on your changed financials may be able to save you money or highlight some new options that may be better suited to your needs.

A mortgage broker does the work for you, at no cost.
Some people are still concerned that hiring a seasoned professional to look at your finances and find new mortgage rates will cost a lot of money. This is a myth! Mortgage brokers provide their services at no charge (yes, free!) and take a fee from the lending institution, not the client. So, let us look around for the best mortgage rates available to you on your behalf – all at no cost to you.

A mortgage broker does ONE credit check but can check MULTIPLE lenders without lowering your credit score.
One of the biggest advantages to having a mortgage broker shop around on your behalf is having them conduct one credit check and then using that information to shop around among several different lenders. If you wanted to shop around on your own, you would have to allow each institution to run a credit check and, as a result, lower your credit score. Working with a lender also means a lot less paperwork for you, too!

In short, a Dominion Lending Centres mortgage broker does the legwork on finding the best mortgage rate for you, at no cost and with only one credit check. Be sure to spring into action this Spring to and get a jump on your mortgage renewal process.

Max Omar

Max Omar

Dominion Lending Centres – Accredited Mortgage Professional

28 Feb

Here’s How Much House You Can Afford Under Canada’s New Mortgage Rules


Posted by: Sharon Davis

Here’s How Much House You Can Afford Under Canada’s New Mortgage Rules

The mortgage stress test is a tool used to ensure that buyers do not spend more on a home than they can actually afford.

01/10/2018 13:42 EST | Updated 01/11/2018 09:30 EST

By Sonia Bell and Wayne Karl

It’s January 2018, prospective homebuyers, and you know what that means: The new mortgage stress test is in play.

But what you may not know is how much it’s going to impact your homebuying budget. Nor would you be alone: A new study from ReMax estimates that 37 per cent of Canadians aren’t aware of how the changes will affect their ability to purchase a property in the future.


If you’re among them, you may be feeling the stress, indeed. But here’s our guide showcasing what you can afford with the new regulations.

Towards the end of 2017, the Office of the Superintendent of Financial Institutions (OSFI) introduced new, tighter mortgage rules, requiring borrowers with uninsured mortgages (those putting a down payment of 20 per cent or more) to undergo a stress test. As of Jan. 1, 2018, uninsured borrowers must now qualify at a new minimum rate — the greater of the Bank of Canada’s five-year benchmark rate, which currently sits at 4.99 per cent, or 200 basis points higher than their mortgage rate.

While the stress test aims at ensuring that borrowers can afford mortgage rate hikes, some sources are questioning — if not outright opposing — the latest mortgage rule.

“Those of us working in the mortgage industry question if now is an appropriate time to introduce more regulations, which will cool markets across the country further,” says James Laird, co-founder, ratehub.ca, and president of CanWise Financial. “We have yet to see the full impact of regulations added over the last 12 months, combined with rising interest rates. A more prudent approach would be to let these new variables work their way through the real estate markets and decide if further tightening is required.”

Natural supply and demand forces will always triumph over regulatory tinkering.Phil Soper, Royal LePage

Phil Soper, president and CEO, Royal LePage, is also wary of the new policy change. “It is prudent that policy makers introduce measures that help protect the housing market from runaway price inflation,” says Soper. “However, natural supply and demand forces will always triumph over regulatory tinkering. Attempting to use public policy to steer property prices in huge, rapidly growing cities like Toronto and Vancouver is like a tugboat trying to turn an ocean liner. Consistent, measured policy can have a positive impact. Just don’t try to turn the market on a dime or you risk sinking the ship.”

Importantly, prospective homebuyers, those who stand to be most affected, haven’t yet grasped the full repercussions of the new policy, which could disqualify 10 per cent of purchasers, according to The Bank of Canada.

Fifty-eight per cent of ReMax’s survey respondents are aware of the new rules, but 27 per cent of respondents stated they don’t believe it will impact the type of property they purchase; 18 per cent believe it will impact the property type they purchase; and 13 per cent are unsure of how the new regulations will affect their ability to purchase a property.

Homebuyers are purchasing in a rising interest rate environment — interest rates grew twice in 2017 and are expecting to continue to rise between 2018 and 2019, according to CMHC. The new stress test is aimed at protecting homebuyers; it is a tool used to ensure that buyers do not spend more on a home than they can actually afford and safeguards them from feeling financial stress should interest rates rise.

More Canadian real estate info from NextHome:

Royal LePage is among those to predict the new mortgage stress test will significantly influence the market, especially in the first six months of the year, as buyers re-evaluate their finances and expectations and adopt a “wait and see” approach. By reducing buyers’ purchasing power, the stress test will likely result in further demand for entry-level properties, namely the condominium segment, which could continue to drive prices higher, which could further limit what kind of property you can afford.

So, how much can you really afford?

The harsh reality is that the new rules will reduce homebuyers’ purchasing power substantially. In some cases, decreasing the overall price of a home they can afford by tens of thousands of dollars. We calculated how much a buyer can afford, now that the new rule has taken effect.

The methodology: Using ratehub.ca’s mortgage affordability calculator, we determined how much a family can afford with a household income of $100,000 and qualifying for a five-year fixed mortgage amortized over 25 years.

The corresponding chart presents a typical scenario: A family qualifying for a mortgage rate of 2.84 per cent. In this case, they would need to qualify at the Bank of Canada’s five-year benchmark rate, currently at 4.99 per cent.

We show the minimum household income required, and how much of a down payment you would need, in order to buy a home at the average price in that market.

Your guide to what you can buy:


14 Feb



Posted by: Sharon Davis


Restaurateur and TV personality Vikram Vij on the joy of cooking—slowly—at home

The culinary landscape in North America is amply populated with chefs and personalities putting their spin on a style of cooking designed to get your attention. With the explosion of the foodie culture in recent years, cutting through the clutter would seem a near impossible task. But that’s exactly what a chef with humble beginnings from India has managed to do. Vikram Vij is one of Canada’s most celebrated chefs, ascending the culinary ladder by reaching into his Indian heritage. He opened Vij’s restaurant in Vancouver in 1994 to great acclaim and hasn’t looked back. He’s since opened three Indian restaurants and a fleet of food trucks and become an author and television personality, most notably taking a turn as a Dragon on CBC’s Dragons’ Den. Despite all the success and attention, Vij continues to focus on what he loves to do: cook. During an autumn tour of India, he took time out to speak to Our House magazine about food, fame and his future.

Our House: Where do you call home these days?
Vij: I live in Surrey, B.C., but as an Indian who came to Canada and who loves to travel and get culinary inspiration from around the world, I like to think I’m a global citizen!

I understand you’re in India, can you tell me a little about the purpose of the trip?
Every year I take a trip with some food fans, some of whom have been coming with me for years now, for a Vij’s Culinary Tour. We’ve visited India most often, but we’ve also been to places like Vietnam, Peru and South Africa. I love to experience not only different culinary cultures, but also to re-explore my own roots and to visit different parts of India to see what is being cooked – and how it’s being cooked – and to incorporate those methods into the food in my restaurants. That’s how I stay authentic, and it’s the best way to keep learning and to grow.

Describe how important cooking at home is, not just for yourself but for families and people in general?
I cannot say enough about eating together as a family, and having a home-cooked meal – and I’m a restaurateur! There are stats that show families who make time to eat together each night, who break bread together and talk, have fewer instances of crime, of drug addiction, and of broken homes. Now, that’s easy for me to say – working in the restaurant industry, we were hardly a “sit down for dinner at six o’clock” family. But we made a conscious effort to set aside breakfast time, and an evening each week when we knew we would all be together – and that means no cellphones at the table.

What advice would you give to someone who is afraid of or overwhelmed by the idea of learning how to cook?
I would say just try it. There are so many books out there that will teach you the basics, and if you get it wrong, so what? I don’t use recipes; I put in a few key ingredients that I want to use… then I add more, and then even more until I’m happy with what I’ve cooked. Baking is a science – so it’s hard to go freestyle with that… but cooking is love… and you should experiment and not be put off from trying.

What advice would you give to a young chef thinking about opening his or her own restaurant?
I would say it will be the hardest thing you will ever do. But it will also be the most rewarding. You need three things: the passion to follow your dream of opening a restaurant, an amazing team who will always have your back, and money – ideally lots of it!

Do you cook much at home, or leave it to your restaurants?
I love to cook at home and I love to be in my restaurants seeing other people enjoying their dinner with us. I don’t have my daughters at home to cook for anymore, so I can make what I want. But I like to take my time while I’m cooking. Being in the kitchen is my greatest pleasure, and it’s also my entertainment for the evening, and I don’t want to rush it.

You’ve cooked for celebrities and politicians. Is there someone or a group you haven’t cooked for that you would still like to?
There’s an expression: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” I’d like to teach people how to cook Indian food, and have it added to their repertoire of meals they cook for their family. I’d love to be an ambassador of Indian food in Canada, and I’d like to show as many Canadians as possible to not be daunted by Indian spices and recipes.

Describe your thoughts on the Canadian culinary scene. How do Canadians stack up against the rest of the world?
Canadian cuisine is incredible – and it’s getting better and better. We have the most amazing resources which create the best ingredients. We have fantastic meats and produce from our local farms, we’ve got really great wines, craft beers, gin and vodka, and on the east and west coasts, the seafood is second to none. When you’ve got those world-class resources, then you’re already on the international stage from a culinary perspective.

How does your typical day unfold?
There’s honestly no such thing as a typical day. They are all so different, and it depends on where I am. As much as possible, I get up early and go to yoga, then it’s either meetings and more meetings followed by service at one of the restaurants or, if I’m travelling, I’ll try and eat at someone else’s restaurant to see what they’re up to.

What do you make of the popularity of food shows and channels like the Food Network, and chefs as celebrities?
I think bringing cooking into the mainstream cannot be a bad thing, but I hate the term “celebrity chef,” because our main focus should always be the food, rather than fame. I’ve been involved in many TV shows myself and I’m grateful for the ability to bring an Indian presence there, and to highlight Indian cuisine to a wider audience.

You’ve written books, been on TV shows. Do you see yourself cooking and opening and running more restaurants for the years to come? What does the future hold?
The day I stop cooking is the day I give up on everything! Sure, I’d like to open more restaurants, but I also want to make sure the ones I have are the best they can possibly be and have the attention they deserve. I have two daughters, but I have three other children: Vij’s, Rangoli and My Shanti!

What is the one thing people might not know about you?
I’m known for working the room at my restaurants – but the reason I love to do that is because I originally wanted to be a Bollywood actor. I love to perform and to talk to people and I wanted to be a movie star, but my father said no son of his was going to be an actor, so I became a chef.


Lead Writer