Before I dive in this week, a quick Happy Thanksgiving to all our American friends and clients! While on this side of the border, we celebrated last month, it’s always nice to have another reminder to count our blessings.
And it’s also nice to finally have a competitive Detroit Lions team to watch on Thanksgiving… Go Lions!
You know what’s funny about running a mortgage business? You spend a lot of time thinking about money… not just mortgages, but how money itself works.
This week, I found myself explaining to my kids why chocolate bars when I was young were bigger and cheaper. Try explaining inflation (and “shrink”flation) to a 10-year-old! 😊
Speaking of money… you’ve probably heard about Ottawa’s latest announcement — removing GST for two months and sending out $250 cheques to folks making up to $150,000 a year.
At first glance, it sounds great. Who doesn’t love a little extra cash in their pocket?
But here’s where my “finance guy brain” starts turning…
Remember back during COVID when we saw all those government support programs? The money printer was working overtime, and while it helped a lot of people through a tough time, we’re still dealing with the aftermath.
Those of us in the real estate and mortgage world saw it firsthand — housing prices shot up, inflation took off, and then… boom… interest rate hikes that nobody saw coming.
It’s kind of like using your credit card to pay off another credit card. Sure, it feels good in the moment, but eventually, those bills come due.
Now, I’m not saying this new program will have the same impact as the COVID spending — it’s much smaller in scale. But it does make you think…
When a country that’s already carrying a lot of debt starts creating more money out of thin air, there are usually consequences. And those consequences often show up in our monthly mortgage payments and housing costs.
The real challenge here is that while these government “gifts” might help in the short term, they could potentially delay the thing many of us are hoping for — lower interest rates.
You see, if this extra spending nudges inflation up even a little bit, the Bank of Canada might have to hold rates higher for longer. And as your friendly neighborhood mortgage guy, that’s something I pay very close attention to.
Does this mean we should panic? Not at all. But it does mean we should be thinking strategically about our housing and mortgage decisions.
Every rate increase or decrease, every government policy, every market shift — they’re all connected. Understanding these connections helps us make better decisions about when to buy, sell, or refinance.
That’s why I’m always here to help you navigate these changes. Whether you’re wondering about the timing of your next move or just want to understand how these policies might affect your mortgage, let’s talk it through.
Until next week,
Vince
P.S. Speaking of strategy, if you’re curious about how to position yourself for whatever comes next in the market, give me a call. Sometimes the best opportunities come from understanding what’s happening behind the headlines. 😊
