Weekly Mortgage & Market Update
Wildfire Mortgage Relief, Bond Yields, and a Red Deer Affordability Case Study
This week’s update begins with information for homeowners affected by the Okanagan wildfires. Mortgage relief options may be available through lenders and mortgage insurers, but borrowers need to ask for help early. We are also looking at bond yields, the uneven BC housing market, the approaching Canada and United States tariff deadline, and a Red Deer purchase that offers a very different affordability picture from the Lower Mainland.
Mortgage Relief May Be Available After the Okanagan Wildfires
Wildfires have caused severe disruption across the Okanagan, including the Summerland area. Homeowners who have been evacuated, lost income, experienced property damage, or are worried about making an upcoming mortgage payment should contact their lender as soon as possible.
Mortgage insurers and lenders have tools that may help borrowers experiencing temporary financial hardship. Depending on the mortgage insurer, lender policy, and individual circumstances, these options can include a temporary payment deferral, a special payment arrangement, capitalization of eligible amounts, or an extension of the amortization.
“If the wildfires have affected your ability to make a mortgage payment, contact your lender before the payment is missed. Ask which disaster relief and mortgage assistance options apply to your mortgage.”
A payment deferral is not forgiveness. Deferred principal and interest generally need to be repaid later, and the arrangement may increase the mortgage balance, future payments, amortization, or total interest cost. The lender must review the borrower’s circumstances and approve the solution.
Contact your lender immediately and ask about mortgage assistance for wildfire related financial hardship. Have your mortgage number, property address, insurance information, and a brief explanation of the impact ready. If you need help preparing for that conversation, contact Rob at rob@skoko.ca or 604 771 4085.
Bond Yields Provided Some Relief This Week
Canada’s five year government bond yield moved lower on Thursday after softer United States producer inflation data, then traded near 3.28% on Friday. The movement provided some relief after several weeks of upward pressure.
Five year fixed mortgage pricing is influenced by the five year Government of Canada bond yield. A single day of improvement does not guarantee that lenders will lower rates, because lenders generally want to see a move hold before changing published pricing. A rate hold remains useful protection while borrowers compare their options. Bond yields move throughout the trading day, so the figure above should be treated as a market observation rather than a guaranteed closing value.
BC Home Sales Remain Below Typical July Levels
The British Columbia Real Estate Association reported 6,561 residential sales in July. That was 6.7% lower than July of last year and approximately 18.8% below the ten year average for the month. The provincial average residential price declined 1.3% to $929,619.
Conditions vary considerably across the province. Several Interior markets performed better than the Lower Mainland, while Greater Vancouver and the Fraser Valley remained softer. Buyers who have flexibility around location may find significantly different prices, inventory, and rental opportunities in other BC or Alberta communities.
The August 19 Tariff Date Adds Economic Uncertainty
The United States has announced additional tariffs of 50% on selected Canadian goods entering the country beginning August 19. The affected trade is estimated at approximately $20 billion annually, and negotiations remain active.
If the tariffs take effect as announced, they could affect employment, business investment, consumer confidence, and some prices. The final mortgage rate effect is not automatic because slower growth can place downward pressure on rates while higher costs can increase inflation pressure. The Bank of Canada will need to weigh both risks.
The TSX Reached an Intraday Record
The S&P TSX Composite reached an intraday record of approximately 36,733 on Thursday before giving back part of the gain. Technology and health care shares helped lead the advance as investors reacted to softer United States inflation data.
Strong equity markets can support investment balances and consumer confidence. For mortgage borrowers, the bond market remains the more direct signal to watch for fixed rate pricing.
What This Means for You
If You Are Buying
Bond yields improved this week, while inventory and softer prices continue to give many BC buyers negotiating room. Arrange a rate hold, confirm your budget, and keep financing conditions in your offer unless your mortgage and property have been fully reviewed.
If You Are Renewing
One encouraging bond market move does not establish a lasting trend. If your renewal is within the next six months, start comparing lenders and strategies now so you have time to make a considered decision.
If You Have a Variable Rate
The September 2 Bank of Canada decision remains uncertain. Recent employment data supports patience, while trade uncertainty creates new risks to growth and inflation. Review your payment comfort and options without assuming that either a cut or a hold is guaranteed.
Case Study: What Buying in Red Deer Can Look Like
A client recently purchased a home in Red Deer, Alberta. The numbers illustrate why some BC buyers and investors are considering markets outside the Lower Mainland. Josh Smith of the Getty Group represented the buyer in the transaction.
105 Cunningham Crescent, Red Deer, Alberta
2 Bedrooms Downstairs
3 Bathrooms
Approximately 1,820 Square Feet
Separate Lower Living Area
The property includes a three bedroom upper living area and a separate two bedroom lower living area. Based on information provided for this case study, estimated market rent was approximately $2,000 per month for the upper area and $1,400 per month for the lower area. Rental use, legal status, municipal requirements, insurance, and achievable rents must always be independently verified.
Here are two illustrative ways to view the purchase. The first assumes an eligible owner occupied purchase with a minimum down payment and a 30 year insured amortization. The second assumes a rental property purchase with a 20% down payment.
The rental property example shows estimated gross cash flow before property tax, insurance, utilities, vacancies, repairs, maintenance, management, and other ownership costs.
All figures are illustrative and based on the assumptions shown. Option 1 assumes the borrower qualifies for a 30 year insured amortization and occupies the property as a principal residence. Rates and mortgage insurance premiums are subject to lender and insurer approval and may change. Rental income treatment varies by lender. Estimated rents are not guaranteed. Property use, suite status, municipal compliance, taxes, insurance, utilities, closing costs, vacancies, repairs, maintenance, and management costs must be reviewed separately. Individual qualification will vary.
Buyer’s Agent: Josh Smith
Getty Group, Calgary
587 900 9043 | josh@gettygroup.ca
What’s On This Weekend: August 14 to 16
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