 | | We’re officially into the fourth quarter of 2024, and with that comes the usual signs - the leaves are changing and the nights are feeling brisk.
This month, we're featuring articles concerning next year’s economic outlook, concerns about the current RRIF requirements, and the methods of applying for the disability tax credit. |
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| Our Best Rates (as of October 4, 2024) |
| | | Click the above rates to view our full rate tables.
Rates are subject to change without notice.
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| What’s new on the Fiscal Agents website |
| | | GIC Laddering Explained: An Interactive Demonstration
At Fiscal Agents, we mention the benefits of GIC Laddering as an investment planning strategy continuously. To better explain, we’ve developed our own interactive tool designed to demonstrate to you exactly how laddering works, and it’s benefits.
Our new Laddering demonstration is as simple to use as it gets - enter an amount that you’d like to invest, and the tool will show you - using the latest rates - which products would be ideal, and how your holdings would develop over time (as each GIC matures). |
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| Switching your mortgage: Is it right for you? Courtesy of John-Andrew Newman, NewmanMortgages.com |
| Note: While Fiscal Agents is not in the mortgage business, we are happy to recommend John-Andrew Newman (NewmanMortgages.com) of The Mortgage Group. |
| Mortgage Market update: October 2, 2024 | Term | Conventional | Insured |
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| 3 Year Fixed | 4.54% ↓ | 4.39% ↓ | | 5 Year Fixed | 4.79% ↓ | 4.14% ↓ | | 5 Year Variable | 5.60% ↓ | 5.45% ↓ | | Market Update - Terms and Conditions: Email me for more rates/ details | Rates subject to change unless locked on a live application | These are average rates, use for tracking purposes (illustration only) | The higher the mortgage, the lower the rate | Rate premiums may apply for rentals, investor mortgages, 2nd mortgages, non-AAA bank lenders |
| When your mortgage term comes to an end, you may be faced with the question: should I stay with my current lender, or should I explore other options?
This decision is often referred to as a "switch," and understanding what it entails can help you make the best choice for your financial future.
What is a switch?
A switch, in the context of mortgages, is when you transfer your mortgage from one lender to another at the end of its term. This may be an opportunity to potentially secure a better interest rate, access more flexible terms, or find a lender that better suits your changing needs.
Unlike refinancing, a switch typically doesn't involve borrowing additional money; it's simply moving your existing mortgage balance from one lender to another.
Do I have to renew with my current lender?
The short answer is no. You are not obligated to renew your mortgage with your current lender. In fact, many homeowners don't realize that they have the option to switch lenders when their mortgage term is up. This is a crucial time to reassess your mortgage, explore other offers, and ensure you're getting the best deal possible.
Your current lender will likely reach out to you a few months before your renewal date with a renewal offer. Many mortgage holders make the mistake of simply signing this offer without having a mortgage broker review options for you, which could be very costly. The most-savvy mortgage holders lean on their mortgage broker to review their mortgage at each renewal or even yearly to see if the broker can find better rates or options. This could result in you paying off your mortgage faster and saving thousands of dollars over the life of your mortgage.
Benefits of switching lenders
Switching lenders at renewal can be a strategic move for several reasons: Better interest rates: Interest rates can fluctuate over time, and another lender might offer a lower rate that reduces your monthly payments or allows you to pay off your mortgage faster. Flexible terms: You may find a lender that offers terms more aligned with your current financial situation, such as the ability to make lump-sum payments or increase your regular payment amounts without penalty. Enhanced customer service: If you've been unhappy with the service from your current lender, switching gives you the chance to work with a lender who prioritizes customer satisfaction and support. Incentives: Some lenders offer special incentives, such as covering the cost of appraisal or legal fees, to attract new customers during a switch.
Considerations before switching
Before making the switch, there are a few factors to consider: Fees and penalties: Some lenders may charge fees for switching, such as discharge fees or penalties for breaking your existing mortgage early. Ensure you understand any costs involved. Pre-approval: Just as when you first obtained your mortgage, you'll need to qualify for a new mortgage with the new lender. Make sure you meet the new lender's requirements before making a decision. Timing: Start shopping around for new mortgage options well before your renewal date. This will give you enough time to compare offers and negotiate the best deal.
Your mortgage renewal is a crucial moment—don't settle for less. Contact me today to explore your options and see if switching lenders could save you money. Let's find the best mortgage solution together.
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| | Good Reads: Articles we recommend from the web |
| | | Industry groups call on feds to reduce or ditch RRIF mandatory withdrawals CALU and IIAC hope government will reconsider minimum RRIF withdrawal regime in the 2025 budget Written by Rudy Mezzetta, Advisor.ca
Industry organizations are calling on the federal government to reduce or eliminate the RRIF mandatory minimum withdrawal requirements to help prevent Canadians from outliving their savings.
Both the Conference for Advanced Life Underwriting (CALU) and the Investment Industry Association of Canada (IIAC) are asking Ottawa to raise the age at which RRSPs must be converted to RRIFs, and at which RRIF mandatory minimum withdrawals begin, to 75. Currently, RRSPs must be converted to RRIFs at age 71, and mandatory minimum withdrawals begin the year after a RRIF is opened.
The recommendations were included in the groups’ submissions to the Department of Finance’s 2025 pre-budget consultation, which closed last month. Forcing retirees to withdraw money from their tax-deferred retirement accounts in their early retirement years, when they may not need the funds, could leave them vulnerable in their later years.
“You may not be travelling as much [in later retirement], but health-care expenses become a paramount item that needs to be funded,” said Kevin Wark, tax advisor with CALU, in an interview. |
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| | | Economy to grow moderately, rates to fall below 3% next year: Deloitte Lower rates expected to ease burden on highly indebted household sector By Rosa Saba, The Canadian Press, posted on Advisor.ca
From the article: Deloitte Canada expects economic growth to pick up next year as it forecasts the Bank of Canada to cut its key interest rate below 3% by mid-2025.
In the company’s fall economic outlook released Thursday, it forecasts the central bank’s interest rate will fall to 3.75% by the end of this year and a neutral rate of 2.75% by mid next year.
Meanwhile, it expects the economy to grow moderately as softer labour market conditions persist, especially as many homeowners have yet to face higher rates when they refinance their loans.
“We do think that we’re going to be in for a decent year next year,” said Dawn Desjardins, chief economist at Deloitte Canada. |
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| | | Help clients apply for the disability tax credit Preparing applicants to speak to their doctors can make the process easier By Jonathan Got, Advisor.ca
From the article: Applying for the disability tax credit (DTC) can be a daunting task, as applicants must ask their medical practitioner to fill in an extensive form. Experts encourage applicants to be prepared with the right documentation, be thorough when detailing their conditions and be cautious with DTC promoters.
The DTC is a non-refundable tax credit that can help eligible adults cut their taxable income by thousands of dollars. The credit is meant to help offset the costs of physical and/or mental impairments.
Those eligible for the DTC may then be eligible for plans and programs such as the registered disability savings plan (RDSP) and the Canada disability savings grant, among other programs. The grant matches up to $70,000 in an RDSP over the beneficiary’s lifetime. |
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| Our Featured Free Publication |
| Financial Jargon: The final reason why the industry spin machine causes more harm than good is that it often contains financial jargon. At best,jargon confuses investors and over-complicates the investment process; at worst, it can be used to cloud and deliberately mislead. It can exploit people’s lack of financial literacy and give a false impression of trustworthiness and expertise. But the principles underpinning sensible investing are really quite simple, and consumers should place their trust instead in firms that simplify investing and explain how it works in clear,concise language. - Five ways that Financial Marketing can mislead investors, posted by Financial Independence Hub |
| | Jargon Buster: Glossary of Financial Terms
Designed for both the finance professional and the money market novice, with over 1200 concise definitions of relevant terms used in the financial industry, the Jargon Buster touches on almost every facet of finance, investment and savings in a manner that is clear and easy to understand. |
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| FrugleFrogg Adventures: Peril! |
| | Editor’s Note: We’re happy to report that despite appearances, our loyal mascot was not in actual danger as the photo suggests. As it turns out, the bear was only a prop posed in front of a store, and posed no threat to our amphibian hero.
We’re certain you’re all as relieved as we were to discover this information. |
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