What is a credit score, and how to improve yours.

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What is a Credit Score:
Your credit score is a number that illustrates your financial health at a specific point in time. It also serves as an indicator of your financial past, and how consistently you pay off your bills and debts. This is one of the factors mortgage professionals consider in qualifying you for a mortgage.

How to Check Your Credit Score:
To find out your credit score, contact Canada’s two credit-reporting agencies: Equifax Canada at www.equifax.ca and TransUnion Canada atwww.transunion.ca. For a fee, these agencies will provide you with an online copy of your credit score as well as a credit report – a detailed summary of your credit history, employment history and personal financial information on file. You can also obtain a free copy of your credit report by mail. If you find any errors in your report, notify the credit-reporting agency and the organization responsible for the inaccuracy immediately.

What If You Do Not Have a Credit Score:
It’s important to begin building a credit history as early as possible. You can begin to build one by applying for – and responsibly using – a credit card. Your financial institution or mortgage professional can help.

How to Improve Your Credit Score:
Demonstrating your ability to manage credit is key to maintaining a good credit score. There are a number of things you can do to improve your credit score. These include: Always pay your bills in full and on time. If you cannot pay the full amount, try to pay at least the required minimum shown on your monthly statement. Pay off your debts (such as loans, credit cards, lines of credit, etc.) as quickly as possible. Never go over the limit on your credit cards, and try to keep your balances well below the limits. Reduce the number of credit card or loan applications you make. Once your credit score has improved, work with your mortgage professional to obtain a mortgage that works for you.

Find Out More:
To find out more about credit scores and reports, visit the Financial Consumer Agency of Canada website and download or request a free copy of their guide, Understanding Your Credit Report and Credit Score. This guide provides practical, straightforward information on how to obtain and understand your credit report and score, as well as how to build and maintain a good credit history.

Will April 20th mark the single busiest day for real estate transactions in Toronto’s history?

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Our team has received numerous calls today regarding the 16-point plan implemented by the Ontario Government to cool the housing market.

The most pressing question we are being asked is regarding the 15% Non-Resident Speculation Tax (NRST) and the implementation details/timing.  The detailed Technical Bulletin published by the Ontario Ministry of Finance can be access through the attached link ( Non-Resident Speculation Tax Technical Bulletin) and states the following:

NRST Effective Date

  • “Upon the enactment of legislation, the NRST will be effective as of April 21, 2017
  • Binding agreements of purchase and sale signed on or before April 20, 2017 are not subject to the NRST.”

While you should check with your lawyer to confirm the specifics, it appears that any binding agreements entered into on or before today will not be subject to the new tax.  If there are a significant numbers of non-resident speculators sitting on the fence, this potential one day of opportunity could lead to a record number of sales closing on April 20th, 2017.

Details of 16-Point Plan:

As noted, the Ontario government has introduced a 16-point plan to try and control the real estate market.  A summary of the 16 point can be found below, and the details can be accessed at the following Ontario Government Link (https://news.ontario.ca/mof/en/2017/04/ontarios-fair-housing-plan.html)

  1. Implement a new 15% Non-Resident Speculation Tax (NRST)
  2. Expand rent control to all private rental units (with “an increase capped at 2.5%”)
  3. Introduce changes to the Residential Tenancies Act – including standardized leases
  4. Create new market housing and affordable-housing units with surplus provincial land
  5. Empower the City of Toronto “and potentially other interested municipalities” to introduce a vacant homes property tax
  6. Making sure multi-residential apartment buildings are charged property taxes at similar rates to other residential properties
  7. A $125-million program over five years “to further encourage the construction of new rental apartment buildings”
  8. Giving municipalities “flexibility” to use property taxes to fuel development
  9. Creating a “Housing Supply Team” to identify obstacles to housing developments and work with developers and municipalities to address them
  10. Working to “understand and tackle” real-estate practices that allow “paper flipping,” which includes using assignment clauses for real-estate speculation
  11. Reviewing rules for real-estate agents to “ensure that consumers are fairly represented”
  12. Establishing a “housing advisory group” to advise the government on the housing market and the effects of the newly announced changes
  13. Educating consumers on their rights in real-estate transactions
  14. Partnering with the Canada Revenue Agency to strengthen reporting requirements and make sure taxes are paid on real-estate purchases and sales
  15. Overhauling standards for elevator repair
  16. An updated Growth Plan with municipalities to address density and “an appropriate range of unit sizes”

(note a number of the above numbered points are courtesy of Tom Cardoso and Evan Annett in their recently published article in the Globe and Mail.  A link to that article is included in the below list)

Other Useful Articles:

While additional information will undoubtedly be circulated in the coming day, the most helpful articles we have found on the subject thus far are included below:

Ontario slaps 15% tax on foreign buyers, expands rent control in 16-point plan to cool housing


Read Ontario’s 16-point plan to cool Toronto and the Greater Golden Horseshoe region’s red-hot housing market

We hope the above is helpful, and should you wish to discuss, please contact a member of The Lang Team by phone or email at any time.


Outline Financial


Mortgages & Life Insurance – how do they fit together?

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Congratulations!  You’ve just purchased the home of your dreams, and your advisor has secured you a great mortgage to make this dream a reality.

Now that you have a mortgage, it can make a lot of sense to insure it.  While owning a debt free home is a financial goal for many, putting plans in place to make sure your mortgage is paid off in the event of your death can be a critical part of estate and family planning.

A good rule of thumb to follow when searching for advice?  Ask an expert.  If the analysis points to a need for mortgage insurance, the question then becomes should you purchase the lending institution’s product that is offered with your mortgage, or should you explore term life insurance that is available from a life insurance advisor/company?

While both options have their pro’s and con’s, other than potentially more paperwork, the life insurance company option typically offers more overall value as outlined in the 8 key points below:

1 – Cost

Term life insurance available from a competitive life insurance company is usually less expensive than mortgage life insurance provided through the lender.  This is especially true if you qualify for non-smoker rates.

2 – Availability 

If you have some health issues, the lenders mortgage insurance may not be available to you.  This may not be the case with term life insurance where competitive underwriting and substandard insurance are more readily attainable.

3 – Declining coverage

Be aware that the death benefit of creditor/mortgage insurance declines as the mortgage is paid down.  Meanwhile, the premium paid or cost of the coverage remains the same.

With term life insurance the death benefit does not decline. You decide how much coverage you want to have.  This gives you the flexibility to reduce the amount of coverage and premium when the time is right for you.  Or keep it should another need arise or in the event you become uninsurable in the future.

4 – Portability  

Term Life insurance is not tied to the mortgage giving you flexibility to shift it from one property to the next without having to re-qualify and possibly pay higher rates.

5 – Flexibility

Unlike creditor/mortgage insurance, term life insurance can be for a higher amount than just the mortgage balance so you can protect family income needs and other obligations but pay only one cost-effective premium.

When you pay off your mortgage you will no longer be protected by creditor/mortgage insurance but term life insurance may continue. Also, unlike mortgage insurance, you are able to convert your term life insurance into permanent coverage without a medical.

6 – The beneficiary controls the death benefit

With creditor/mortgage insurance there is no choice in what happens to the money when you die.  The proceeds simply retire the balance owing on your mortgage and the policy cancels.

With term life insurance your beneficiary decides how to use the insurance proceeds. For example, if the mortgage carries a very low interest rate compared to available fixed income yields, it might be preferable to invest the insurance proceeds rather than to immediately pay off the mortgage.

7 – Can your claim be denied? 

Term life insurance is incontestable after two years except in the event of fraud.

Often creditor/mortgage insurance coverage is reviewed when a death claim is submitted.  Creditor/mortgage insurance allows for the denial of the claim in certain situations even after the coverage has been in effect beyond that 2 year period.

8 – Advice 

Your bank or mortgage broker can advise you on the best arrangement to fund your mortgage but advice on the most appropriate way to arrange your life insurance is best obtained from a qualified insurance advisor who can implement your life insurance coverage according to your overall requirements.

Your mortgage will probably represent the single largest debt (and asset) you will acquire. Making sure your mortgage doesn’t outlive you is the most prudent thing you can do for your family.

Please contact Outline Financial’s insurance group if you think it is time to review your current insurance protection or please feel free to forward this to someone you think may benefit from this information.






Copyright © 2017 Outline Financial & FSB – All Rights Reserved

Ontario Land Transfer Tax Changes – Will they benefit or cost you?

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If you are a first-time home buyer, Ontario has some good news to share; however, if you are a repeat buyer looking to spend over $2 million, things just became a little more expensive.

First the good news.  If you are a first-time home buyer, and your purchase closes on or after January 1, 2017, your Ontario Land Transfer Tax rebate increases from $2,000 to $4,000.  This means you will not pay any Ontario Land Transfer Tax on the first $368,00 of the purchase price which is an increase from the current limit of approximately $227,500.  While this change is not expected to materially increase peoples’ ability to afford a home, it does offer a nice boost at their time of closing.

On the other end of the spectrum, effective January 1, 2017 those that purchase for over $2 million will face an increase in their Ontario Land Transfer Tax costs as illustrated by the below chart (note: if a purchaser has entered an agreement of Purchase and Sale on or before November 14th,the current Ontario Land Transfer Tax Scale will still apply):

Current Ontario Land Transfer Tax Scale:

0.5% on the first $55,000 of the purchase price
Plus: 1.0% on the portion of the purchase price from $55,000 to $250,000
Plus: 1.5% on the portion of the purchase price from $250,000 to $400,000
Plus: 2.0% on the portion of the purchase price above $400,000

New Ontario Land Transfer Tax Scale (Effective January 1, 2017):

0.5% on the first $55,000 of the purchase price
Plus: 1.0% on the portion of the purchase price from $55,000 to $250,000
Plus: 1.5% on the portion of the purchase price from $250,000 to $400,000
Plus: 2.0% on the portion of the purchase price from $400,000 to $2,000,000
(new) Plus: 2.5% on the portion of the purchase price above $2,000,000


A) First Time Home Buyer with a $500,000 Purchase Price

  • Current Ontario Land Transfer Tax = $4,475
  • Revised Ontario Land Transfer Tax After Jan 1, 2017 = $2,47
  • (note: if the buyer is also subject to the Toronto Land Transfer Tax, there would be an additional $2,000 in Toronto Land Transfer Tax)

B) Repeat Home Buyer with a $3,000,000 Purchase Price

  • Current Ontario Land Transfer Tax = $56,475
  • Revised Ontario Land Transfer Tax After Jan 1, 2017 = $61,475
  • (note: if buyer is also subject to the Toronto Land Transfer Tax, there would be an additional $55,725 in Toronto Land Transfer Tax)

In addition to the Ontario Land Transfer Tax, there is also the Toronto Land Transfer Tax to consider for those purchasing within the city of Toronto.  The current scale for Toronto Land Transfer tax is 0.5% on the first $55,000 of the purchase price; plus 1.0% on the portion of the purchase price from $55,000 to $400,000; plus 2.0% on the portion of the purchase price over $400,000.  The current rebate for first-time homebuyers is $3,725.

While nothing has changed with respect to the Toronto Land Transfer Tax, it is possible the municipality will review the current policy over the next number of months considering the recent Ontario changes.

We hope the above is helpful, and should you wish to discuss, please contact a member of The Lang Team by phone or email at any time.


Outline Financial


Rate Trends: Bank vs. Mono-line Lenders


In response to numerous questions we’ve received about the direction of rates recently, we’ve included an overview of what we believe is happening in the current rate environment and where we are headed.

Current Bank versus Mono-line Lender Rates = Client Opportunity?

While there is never a “right” answer for an economic opinion, one thing is for certain, the major bank mortgage rates have drifted upward over the past number of months resulting in them being significantly higher than what is currently available through mono-line lenders.

While time will tell if mono-line rates follow a similar path, for the immediate term, there may be significant savings available to any client that has or is planning to purchase and will be closing within the next 30 to 90 days.

What has created this interest rate variance?

While others may offer a different opinion, based on our review of the market, we believe the following to hold true:

  • 5 year Bank of Canada bond yields have been dropping like a rock.  As of today (Jan 15, 2016), the current yield is 0.559% which is by far the lowest range in history (we’ve included a graph of the bond yield history at the bottom of this email).
  • 5 year mortgage rates almost always move in a direct relation to the 5 year Bank of Canada Bond Yield.
  • Current Rates – while we are seeing this drop reflected in the mono-line lender world (5yr fixed rates in the 2.5%’s to 2.7%’s range are now available), the banks seem to be going in the opposite direction (they have increased their discounted 5yr fixed rates to the 2.8%’s to 3.0%’s range)*.
  • Why are bank rates going up? – the general consensus is that the cost of borrowing for banks has increased.  Given an expected change in capital requirement by OSFI, along with a market perception that the banks may be in for a tough ride given the economy, investors are requiring a higher return on their money (i.e., banks’ borrowing costs increased).
  • Will bank rates continue to rise? – In our opinion, if the bond market stays where it is (which is likely), the banks won’t be able to go much higher.  We believe the banks have already increased their rates by a sufficient margin to hedge against their risks, and may pull back as we approach the spring market.
  • Should current variable rate clients lock into a fixed rate?  While a lot depends on personal preference/risk tolerance, given where the bond yields are, we believe if someone has an existing Variable Rate Mortgage (VRM) at Prime -50bps or better (i.e., 2.2% or lower), we would stay the course and reap the benefits as we don’t anticipate the Prime rate heading up anytime soon – in fact, economists are actually talking about a reduction in the overnight rate which could translate to a further reduction in Prime (assuming bank pass along the savings).  Where our opinion may differ is with respect to new mortgages.  Given lenders have tightened their VRM formulas recently (due to an increased cost in the short term market), new clients are now looking at variable rate offers as high as 2.6% at many major banks (still 2.2% to 2.3% at most mono-lines).  Given the rate gap between fixed and variable is relatively small, new buyers will have to consider how much risk they are prepared to take.


While the rate environment is constantly changing, we hope the above is helpful/timely, and we are happy to discuss in more detail at any time.

* as always, the above rates are meant for illustrative purposes only, subject to qualifying conditions, and could change at any time without notice. Please provide our contact information should a client want to discuss their specific situation.


Minimum down payment will increase for purchases over $500,000

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As you will hear later today in the news, the Federal government is expected to announce a major change to the down payment requirements effective February 2016.

To assist with any client inquiries, we’ve attached a link to the change (a CTV News update), as well as a summary of the details below:

Click for link -> [http://www.ctvnews.ca/mobile/business/feds-to-tighten-mortgage-rules-for-homes-over-500k-1.2695989]


Effective Feb 2016 (expected), the minimum down payment required to buy a home over $500,000 will increase.  It will be a tiered system with the first $500,000 requiring a 5% down payment, plus a 10% down payment for the portion above $500,000.

Sample Down Payment Required with New Regulation:

  • $500,000 Purchase = 5% down payment still allowed = $25,000 required
  • $750,000 Purchase = 5% on first $500K plus 10% on next $250,000 = $50,000 required
  • $999,999 Purchase = 5% on first $500K plus 10% on next $499,999 = $74,999 required
  • *as amended in previous Fed changes, anything $1M and over still requires a 20% down payment

We hope you find the above timely, and useful, and if you have any questions regarding the above policy change, or would like to discuss any client specific scenarios, please contact us at any time.

Other – Rate / Product Update

US Rate Increase? All eyes will be on the U.S. next week, when they come together on December 16th to discuss a possible rate hike – the first since June 2006.  While a rate increase would have an immediate impact in the U.S., from a Canadian perspective, it will take longer to work through our economy.  While we will likely see some upward pressure on the 5 year fixed rates, we don’t anticipate any actual increase(s) to be significant.  As we learn more, we will provide you with an update.

Bank Rates Have Come Up Over the Past 2 Months

As you may have noticed, the 5 year mortgage rates at the banks have been on the rise over the past number of months (the variable rates have also risen as banks have amended their discount formulas).  The interesting thing is, the 5 year bond yield — which drives 5 year mortgage rates — remain at near historic lows.  This perceived “gap” in pricing, has led to potential opportunities through some of our mono-line lenders that are offering very aggressive discounted rates & specials versus the banks.  If you or any of your clients would like additional details, please don’t hesitate to contact us at any time as we hope we can help.


BofC Keeps Rates Flat


Please find below the Bank of Canada’s press release regarding their decision to keep the overnight rate at 3/4 of a percentage — in line with what most economists expected:

“The Bank of Canada today announced that it is maintaining its target for the overnight rate at 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent.

Total CPI inflation in Canada has fallen as expected, reflecting the significant drop in oil prices. Core inflation remains close to 2 per cent and continues to be temporarily boosted by the pass-through effects of the lower Canadian dollar, as well as sector-specific factors.

The global economy is evolving broadly in line with projections in the Bank’s January Monetary Policy Report (MPR). The United States remains the main source of momentum in the global economy, while headwinds to growth linger in many regions. In this context, a growing number of central banks have taken actions to ease monetary conditions. Crude oil prices are close to the Bank’s MPR assumptions.

Canadian economic growth in the fourth quarter of 2014 was consistent with the Bank’s expectations. The oil price shock had a modest early impact on aggregate demand, and a larger effect on income. The Bank continues to expect that most of the negative impact from lower oil prices will appear in the first half of 2015, although it may be even more front-loaded than projected in January. Nevertheless, data for 2014 as a whole suggest the anticipated rotation into stronger growth in non-energy exports and investment is well underway.

Financial conditions in Canada have eased materially since January, in response to the Bank’s recent monetary policy action and to global financial developments. This easing is reflected across the yield curve and in a wide range of asset prices, including the Canadian dollar. These conditions will mitigate the negative effects of the oil price shock, further boosting growth through stronger non-energy exports and investment.

In light of these developments, the risks around the inflation profile are now more balanced and financial stability risks are evolving as expected in January. At present, we judge that the current degree of monetary policy stimulus is still appropriate and the target for the overnight rate remains at 3/4 per cent.”

Tips to make your mortgage renewals work for you


In a Manulife survey in 2011, almost 2 out of 3 respondents failed to compare mortgage products and rates from various lenders when their mortgage came up for renewal.  Not knowing what your options are could costs you thousands if not tens of thousands of dollars in extra interest and fees.

Here are some things you should know about mortgage renewals:

Mark your calendars.

Most Canadians have a 5 year mortgage term and a lot can change in that time.  From marriage and kids or job and lifestyle change, it’s no surprise that mortgage renewal dates are the last thing on your mind.

But it’s important to make a note of this date in your calendar so you can get a head start and make sure you are in a good position to renegotiate your next mortgage term.

Know what your overall financial goals are

Mortgage products have different features.  Some allow you to prepay without penalty, others allow you to port your mortgage to a different property if you sell before your term is up.

It’s smart to have an overall idea of what you want to accomplish financially and in your life overall before committing to a new mortgage term.

If you are unsure about the next 3 to 5 years, maybe you want to look at mortgage products that have a slightly higher rate but lower penalties if you need to break the mortgage term.  Penalties can be up to tens of thousands of dollars.

Run the numbers… or let me do it for you.

Mortgages can be complex.  Put yourself in a better position by being informed of your choices.  Much like how a bank offers different credit cards with different fees and options, mortgage products have different features and options.

Please contact our team at any time to discuss the various options available, as it would be our pleasure to help.

New homebuyer stats are in – CAAMP’ releases its Annual State of the Residential Mortgage Market in Canada Report


First-time homebuyers on average make a 21 per cent down payment on the purchase of their new home; since the 1990s, about 40 per cent of this has come from personal savings, suggesting Canadians wait to be financially stable before purchasing. But recently, as home prices have risen, 17 per cent of the down-payment has come from family gifts, a higher number than in previous years. These are just some of the facts found in the Annual State of the Residential Mortgage Market in Canada, the latest consumer survey report released by the Canadian Association of Accredited Mortgage Professionals (CAAMP).

The report probes into how Canadians are managing their mortgage debt. In this low interest rate environment, they continue to aggressively pay down their mortgages even though most expecting to renew in the near future are likely going to find interest rates unchanged or lower than their current rates.

Questions related to why people do not own a home produced interesting results: the majority of people 18-34 indicated they were waiting for prices to fall and savings to increase. At the other end of the age spectrum, more than two-thirds of those over 55 said they were renting because it was a better option for them.


  • About 425,000 live in homes that they purchased during 2014 (up to the time of the survey).  The average price was just over $400,000, for a total value of $173 billion.

  • About 125,000 Canadian homeowners fully repaid their mortgages during 2014 (up to the date of the survey). A further 50,000 to 75,000 expect to fully repay their mortgage before the end of 2014. In combination, about 190,000 mortgages will have been fully repaid during the year.

  • About 900,000 current mortgage holders made lump sum payments in the past year, totaling $16 billion.

  • Among the 190,000 to 200,000 Canadians who have repaid (or are expected to repay) their mortgages during 2014, lump sum payments total about $5 billion.

  • About 900,000 mortgage holders voluntarily increased their regular payments during the past year, by amounts that equate to more than $3 billion per year.

  • The average mortgage interest rate is 3.24 per cent, identical to what we saw in the spring survey and down from the average 3.5 per cent found in the fall 2013 survey.

  • On average, Canadian home equity amounts to 74 per cent of the value of their homes; more than 85 per cent have 25 per cent or higher.

  • About 11 per cent of homeowners took equity out of their homes, using the money for debt consolidation and repayment, renovations, investments, purchases, including education, and “other”.

“Overall, the CAAMP fall report paints a picture of homeowners whether just starting out on their ownership journey or long time mortgage holders, as remarkably confident,” said Jim Murphy, AMP, President and CEO of CAAMP. “They wait until they are financially stable before buying, and they take advantage of low interest rates to aggressively reduce their mortgage debt. Home ownership continues to be an important anchor for the Canadian economy.”

A tale of two resale markets

CAAMP’s research tabulated by Chief Economist Will Dunning indicates that a drop in resale activity in slow growth regions east of Ontario has led to statistically significant job losses. Dunning has been tracking the impact of the federal government’s tightening on mortgage lending since the summer of 2012.  “Broadly speaking, resale activity has improved by 50 per cent from where it was in 2012,” Dunning said. “However, resale activity lags in slow growth regions and that in turn undermines job creation in parts of the country which rely on the housing industry to generate employment.”