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The Bank of Canada has a significant impact on interest rates, mainly through changes in its policy interest rate*. Most economists do expect the first Bank of Canada rate cut to happen by mid-year. Forecasts from most of the Big 6 banks see the overnight target rate falling back to at least 4.00% by the end of 2024 from its current rate of 5.00%. *The Target Rate or Key Interest Rate or the Bank of Canada's Policy Interest Rate: The benchmark cost of borrowing set by the central bank. This is the rate that influences the Prime rate set by lenders for variable loans and lines of credit, including variable-rate mortgages and HELOCs.

The Canadian Real Estate Association (CREA) 2024 home sales forecast: (+9% year-over-year) 2024 home price forecast: (+1.5%) Royal LePage 2024 aggregate house price forecast by Q4: (+5% year-over-year) Re/Max 2024 national average price increase: +0.5% year-over-year RBC Economics 2024 home resales forecast: (+9.4% year-over-year) 2024 home price forecast by Q4: (+1.9%) TD Economics 2024 home price growth forecast: +0.5%

A decline in home sales leading to a deceleration in new mortgage activity in the first half of 2023; Moving away from shorter mortgage terms; 3-to-5-year terms the most preferred choice; The extension of amortizations beyond 25 years for most newly issued mortgages; A shift towards longer repayment periods; Outstanding mortgage debt continued to rise, particularly for uninsured mortgages; The target rate was held at 5% for the remainder of the year. The Bank of Canada is determined to cool the economy and reduce inflation closer to the 2% range. Reference: CMHC (2023): Insights from CMHC's Fall 2023 Residential Mortgage Industry Report Altrua Financial

clear debts that have high interest rates attached; secure capital to help their family or business; finance major renovations to their home; make consistent monthly repayments that could be set up on the same schedule as their first mortgage; most of private lenders offer Interest Only payment. BUT due to a greater risk for the lender by being in the second security positionan,  equity take out loan in the form of a second from a private lender will likely be at a higher interest rate for a lower loan amount vs. a first mortgage with a traditional lender. the borrower needs to consider additional expenses, such as closing costs and appraisal fees, which may need to be paid upfront. exit strategy that the borrower needs to come up with as a short mortgage solution.

The scheduled dates for the interest rate announcements for 2024 are as follows: Wednesday, January 24 Wednesday, March 6 Wednesday, April 10 Wednesday, June 5 Wednesday, July 24 Wednesday, September 4 Wednesday, October 23 Wednesday, December 11

In January 2023, this new account was launched as a great savings vehicle for your homebuying goals without paying the tax on these savings. It's the best part of both a Registered Retirement Savings Plan (RRSP), which gives you tax-deduction perks, and a Tax-Free Savings Account (TFSA), which allows your investments to grow without a tax bill, so that the money you put in and earn in this account goes towards the down payment of your first home. The Contribution Limit As of January 2023, you can contribute $8,000/ year in your FHSA although it’s important to make sure you don’t over-contribute. FHSA can help you contribute up to $40,000 for your first home. Eligibility for the FHSA You need to be a resident of Canada You have to be at least 18 years of age (or the age of majority in your province or territory). You can only hold and contribute to a FHSA until the year in which you turn 71. You or your spouse can't own a home in which you lived, at any time in the year the account is opened or during the previous four calendar years What happens in case you don't use your FHSA to buy a home? If you don't use your FHSA to buy a home, you can transfer the funds to an RRSP account anytime within 15 years or at the time you need to close your account. The good thing is the transfers will not impact your RRSP’s contribution room. If you withdraw the amount, the funds would be subject to withholding taxes. Who is considered a first-time homebuyer for FHSA? For the purposes of FHSA, if you haven’t owned a home within the last four calendar years, you are considered a first-time homebuyer. For example, if you bought your first home in 2013 and sold it in 2016 and have been renting or living with parents or a non-spouse ever since, you would be considered a first-time homebuyer again. Can You Carry Forward Your Contribution? Yes, you can carry forward up to $8,000 of your unused contributions to the next year. For example: You contribute $6,000 to your FHSA in 2023. Since the annual limit is $8,000, you can add the unused $2,000 to the following year, for a total of $10,000 in contributions in 2024.

Banks buy bonds as a low-maintenance (less costly) source of fixed-interest income. On the other hand, the fixed mortgage rates banks offer clients are a higher-maintenance (more costly) source of income since it costs more to operate mortgage loans. Simply put, because fixed mortgage rates compete on similar terms with bonds to attract capital (e.g. 2-year, 5-year, etc.), banks look at the yield of those less-costly bonds to help determine how high or low to set rates of more-costly mortgages. What Are Bonds & Bond Yields? It is important to understand how prices, rates and yields affect one another when investing in bonds. A bond creates value over its lifetime, until it matures. A bond yield is the expected 'rate of return' during a bond's term length. In other words, how much value the bond creates? Government Bond One way which the government is borrowing money from the buyer is through a government bond. Upon bond maturity, the government is then responsible for repaying the face value of the bond. Since the bonds enable the government to pay off its debt and pay for its operations, the government benefits from this arrangement. Banks buy government bonds at a set price for a set term (e.g. 5-year) for a set interest rate. It is worth noting that due to the current economic environment and market conditions, bond prices on the secondary market can be higher or lower than the face value of the bond. Bond Price & Interest Rates The price investors are willing to pay for a bond can be significantly affected by prevailing interest rates so that if prevailing interest rates are higher than when the existing bonds were issued, the prices on those existing bonds will generally fall. Conversely, investors can sometimes sell a bond for more than the purchase price if interest rates decline. In general, there is an opposite relation between a bond price and a bond yield. EXAMPLE: "Let’s say you buy a $20,000 corporate bond with a coupon rate of 5%. While you own the bond, the prevailing interest rate rises to 7% and then falls to 3%. 1. When the prevailing interest rate is the same as the bond’s coupon rate, the price of the bond is 100, meaning that buyers are willing to pay you the full $20,000 for your bond. 2. Prevailing interest rates rise to 7%. Buyers can get around 7% on new bonds, so they’ll only be willing to buy your bond at a discount. In this example, the price drops to 91, meaning they are willing to pay you $18,200 ($20,000 x .91). 3. The prevailing interest rate drops to 3%. Buyers can only get 3% on new bonds, so they are willing to pay extra for your bond, because it pays higher interest. In this example, the price rises to 104, meaning they are willing to pay you $20,800 (20,000 x 1.04)." How to Calculate a Bond Yield? Two parameters that are required to describe fully the cash flows on a bond are "the maturity date of the bond" and "the coupon rate". The maturity date of the bond: When the principal, or face amount of the bond is paid and the bond retired The coupon rate: the annual interest rate established when the bond is issued. Whereas a bond's coupon rate is fixed, the price of a bond sold in secondary markets can fluctuate. There are several different approaches with its pros/cons to measure the bond yield earned by bondholders. Here is one simple method to do so: Bond yield = Annual coupon payment (original interest) divided by bond price. EXAMPLE: An original 5-year bond price of $2,000 comes with an annual coupon of $50 (provides 5.0% interest each year until maturity). If sold for a higher price of $2,100, its bond yield lowers to $50/2,100 = 2.38%. If sold for a lower price of $1,900, its bond yield increases to $50/1,900= 2.63%. High bond yield & the risk Higher yields reflect greater risk for bonds. If you look for safer investments, a lower yield may actually be preferable. Summary When interest rates are on the rise like our current market in June 2023, bond prices generally fall. When interest rates are lower, bond prices tend to rise. Bond price and bond yield are often inversely related.

On January 12, 2023, the Office of the Superintendent of Financial Institutions (OSFI) announced that OSFI is considering new mortgage lending restrictions in an effort to mitigate increased risks stemming from high household debt. As of today, the proposed new rules⁠ are subject to public consultation⁠. What does OSFI do? OSFI supervises and regulates financial institutions and pension plans as an independent arm of the Government of Canada. The objective of OSFI is to protect depositors, policyholders, the financial institution (FI), creditors, and pension plan members. OSFI also guarantees bank deposits through the Canadian Deposit Insurance Corporation (CDIC). The OSFI acts as an information hub for Canadian financial institutions. They periodically post important news and guidelines for the member banks. OSFI's New Regulatory Proposals These proposals are focused on debt serviceability measures that include: 1. Loan-to-income (LTI) and debt-to-income (DTI) restrictions – Federally regulated financial institutions current don’t have prescribed LTI or DTI limits, however OSFI considers measures that restrict mortgage debt or total indebtedness as a multiple, or percentage, of borrower income. LTI- mortgage debt relative to borrower income, or DTI- total indebtedness relative to borrower income. The idea behind this restriction, if it comes into effect, is to control the extent of indebtedness. From the OSFI perspective, lower indebtedness reduces the probability of borrower default by making ongoing debt payments more manageable and limits a lender’s potential losses in case of borrower default. OSFI is therefore proposing a “lender-level” limit that would restrict lenders to a certain volume of loans that exceed a “prudent” threshold. To operate effectively, OSFI is considering: "A clear and consistent definition of “income”, for the purpose of calculating LTI; Appropriate “high” LTI thresholds (e.g., 3.5x, 4.5x), in view of different macroeconomic conditions, and through-the-cycle; and, A credible, industry-wide LTI volume limit (e.g., 20 – 30%)." 2. Debt service coverage restrictions – measures that restrict ongoing debt service (principal, interest and other related expenses) obligations as a percentage of borrower income. Debt service coverage ratios are already employed by federally regulated lenders, with the Gross Debt Service (GDS) and Total Debt Service (TDS) ratios most commonly used. For the insured mortgages in Canada (with a down payment < 20%), GDS and TDS limits are prescribed in law and are currently set at 39% and 44% (Credit Score of < 680), respectively. Under 680, the maximum GDSR is 35%, and the maximum TDSR is 42%. Beyond those requirements, B-20* does not articulate limits on GDS and TDS for uninsured mortgages and generally permits Federally Regulated Financial Institutions (FRFIs) to establish debt serviceability metrics under their Residential Mortgage Underwriting Policy (RMUPs) that facilitate an accurate assessment of a borrower’s capacity to service the loan. However, this doesn’t apply to uninsured mortgages, but that’s now being considered by OSFI, including the implementation of graduated or tiered limits. Existing OSFI guidance could be strengthened by introducing a lender-level volume restriction on loans with high debt service ratios. For such a measure to operate effectively, OSFI is considering: "The formulas and definitions for GDS and TDS and whether to adopt those that currently exist for insured mortgages; Appropriate GDS and TDS thresholds for uninsured mortgages, which could involve graduated or tiered limits; and, An explicit amortization limit used for qualification in B-20 that, in combination with debt service ratio restrictions, would limit excessive leverage." 3. Interest rate affordability stress tests – The Minimum Qualifying Rate (MQR)** is currently applied in the GDS calculation at underwriting. OSFI maintains the MQR for uninsured mortgages, and the federal Minister of Finance maintains the MQR that applies to insured mortgages. As such, OSFI is exploring design elements that could result in the adoption of more risk-sensitive tests of affordability, and could respond better to risks arising from high household indebtedness. Some of these design elements include: "Creating an explicit principles-based expectation that lenders establish, monitor and report on different MQRs, in addition to the current MQR set in regulation, according to different risk characteristics and product types; An expectation that the MQR be applied to a borrower’s total debt service (i.e., for other existing mortgages and non-mortgage debt obligations), in addition to gross debt service; and, similarly, Tests of affordability and other debt serviceability measures for non-mortgage retail lending outside of B-20." Next step? None of the proposed changes will be finalized until after OSFI’s consultation period, which is now open until April 14, 2023. At this time, we don't know how these potential changes will be in place. Criticisms towards new proposals While OSFI says the changes are required to counter record levels of household indebtedness, critics wonder if the announcement has more to do with optics in response to rising affordability challenges for borrowers struggling with high interest rates. On January 10, 2023, the CEOs of Canada’s big banks said tens of thousands of Canadian borrowers could be vulnerable to defaulting on their mortgages as rates rise and homeowners struggle to make monthly payments. The Scotia bank has about 20,000 borrowers that it considers “vulnerable"- Scotiabank’s CEO While OSFI in 2023 thinks it’s time to discuss tightening mortgage lending rules, some fear it could drive more borrowers to non-federally regulated markets, such as private mortgages and Mortgage Investment Corporations (MICs). In other words, this new proposals, if come into effect, can push more consumers into alternative lending or into private lending, which are higher-risk and higher-cost credit facilities anyway. However, it will be an opportunity for brokers to bring value to those who may get turned down by the banks. If you find this information helpful, subscribe to Rihana's Blog for more updates. www.rihanamortgages.com/blog What is the Stress Test? Watch the video (English/ Persian) * B-20 Guideline requires lenders to strictly evaluate a borrower’s ability to pay back a loan based on certain conditions. Guideline B20 also sets standards that improve banks’ resilience, both under normal conditions and during financial downturns. Lenders subject to OSFI supervision hold nearly 80% of all residential mortgages issued in Canada. * * The MQR is a minimum interest rate that is applied in debt service coverage ratio calculations to test the borrower’s ability to afford higher debt payments in case of negative shocks to income, or increases in interest rates or expenses.

حداقل پیش پرداخت وام مسکن بستگی به قیمت خرید دارد. سه سناریودر این زمینه وجود دارد: برای مبلغ خرید تا 500,000 دلار ، حداقل پیش پرداخت %5 است اگر چه برخی از وام دهندگان ممکن است نیاز به مقدار بیشتری داشته باشند. برای قیمت خرید > 500,000 دلار، حداقل پیش پرداخت %5 برای 500,000 دلار اول و %10 برای بخش باقی مانده است. برای قیمت خرید = > 1 میلیون دلار، حداقل پیش پرداخت %20 است.

Your minimum mortgage down payment depends on the purchase price. There are three scenarios: For properties up to $500,000, the minimum down payment is 5% although some lenders may require more. For the purchase price > $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion. For the purchase price = > $1 Million, the minimum down payment is 20%. o Ex. on a $500,000 home: $500,000 x 5% = $25,000 For homes priced between $500,000 and $999,999: You will need to add two amounts. The first is 5% of $500,000. The second amount if 10% of the remaining price of the home. o Ex. on a $750,000 home: ° $500,000 x 5% = $25,000 ° $250,000 x 10% = $25,000 ° $25,000 + $25,000 = $50,000 For homes priced $1 million and above, you need to multiply by 20% o Ex. on a $1,000,000 home: ° $1,000,000 x 20% = $200,000

هر کسب و کاری نیاز به یک مسیر استراتژیک برای پیش بینی آینده مالی شرکت خود در عرض چند سال آینده دارد. یک برنامه بزنسی موثر می تواند خطرات مالی را کاهش دهد در حالی که می تواند به تعیین اهداف بزنسی شما کمک کند. به یک برنامه بزنسی به عنوان 'قطب نما' برای کسب و کار خودنگاه کنید. این می تواند به شما حس بهتری از جهتگیری بزنسی برای رسیدن به اهداف کسب و کار خود در طی یک دوره زمانی متوالی کمک بکند. تصور کنید رفتن به سراغ یک وام دهنده تجاری بدون داشتن هر گونه برنامه بزنسی در دست در حالی که به دنبال گرفتن یک وام تجاری بزرگ برای خرید یک ملک تجاری باشید! چرا قبل از انجام هر گونه اقدام مالی و یا تعهد مالی به خوبی آماده نشویم! با انجام این کار، شما می توانید ریسک مالی را هم برای بزنس خود و هم برای وام دهنده کاهش دهید. این چارت یک نمونه از مراحل کلیدی یک برنامه بزنسی پیشنهادی است برای وام های تجاری. اگرچه برنامه بزنسی شما بسته به ماهیت کسب و کار و اهداف بزنسی شما ممکن است متفاوت باشد. همه چیز زندگی در داشتن استراتژی است!

Every business needs a strategic path to forecast the financial future of your company within the next few years. An effective business plan can reduce risks while setting your business goals. Look at a business plan as the 'Compass' of your business. It can give you a better sense of direction to meet your business targets and milestones. Imagine going to a commercial lender without having any business plans in hand while seeking a big mortgage loan to purchase a commercial property! Why not being well-prepared before making any financial moves or commitments! In doing so, you could reduce risks for both lenders and your own business. This is just a suggested business plan highlighting some key steps where commercial mortgages concern. Yours might be different depending on the nature of your business and goals. LIFE IS ALL ABOUT STRATEGIES!