Bank of Canada Rate Announcement Dec 8th, 2021

Victor Anasimiv • December 8, 2021

Bank of Canada maintains policy rate and forward guidance


The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank’s extraordinary forward guidance on the path for the overnight rate is being maintained. The Bank is continuing its reinvestment phase, keeping its overall holdings of Government of Canada bonds roughly constant.


The global economy continues to recover from the effects of the COVID-19 pandemic. Economic growth in the United States has accelerated, led by consumption, while growth in some other regions is moderating after a strong third quarter. Inflation has increased further in many countries, reflecting strong demand for goods amid ongoing supply disruptions. The new Omicron COVID-19 variant has prompted a tightening of travel restrictions in many countries and a decline in oil prices, and has injected renewed uncertainty. Accommodative financial conditions are still supporting economic activity.


Canada’s economy grew by about 5½ percent in the third quarter, as expected. Together with a downward revision to the second quarter, this brings the level of GDP to about 1½ percent below its level in the last quarter of 2019, before the pandemic began. Third-quarter growth was led by a rebound in consumption, particularly services, as restrictions were further eased and higher vaccination rates improved confidence. Persistent supply bottlenecks continued to inhibit growth in other components of GDP, including non-commodity exports and business investment.


Recent economic indicators suggest the economy had considerable momentum into the fourth quarter. This includes broad-based job gains in recent months that have brought the employment rate essentially back to its pre-pandemic level. Job vacancies remain elevated and wage growth has also picked up. Housing activity had been moderating, but appears to be regaining strength, notably in resales. The devastating floods in British Columbia and uncertainties arising from the Omicron variant could weigh on growth by compounding supply chain disruptions and reducing demand for some services. 


CPI inflation is elevated and the impact of global supply constraints is feeding through to a broader range of goods prices. The effects of these constraints on prices will likely take some time to work their way through, given existing supply backlogs. Gasoline prices, which had been a major factor pushing up CPI inflation, have recently declined. Meanwhile, core measures of inflation are little changed since September. The Bank continues to expect CPI inflation to remain elevated in the first half of 2022 and ease back towards 2 percent in the second half of the year. The Bank is closely watching inflation expectations and labour costs to ensure that the forces pushing up prices do not become embedded in ongoing inflation.


The Governing Council judges that in view of ongoing excess capacity, the economy continues to require considerable monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s October projection, this happens sometime in the middle quarters of 2022. We will provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation target.


Information note


The next scheduled date for announcing the overnight rate target is January 26, 2022. The Bank will publish its full outlook for the economy and inflation, including risks to the projection, in the Monetary Policy Report at the same time.


Victor Anasimiv
Mortgage Broker | DLC
CONTACT ME

Reverse Mortgage Myths—Busted!

By Victor Anasimiv • July 10, 2025
If you're a homeowner aged 55 or older, you may have heard about reverse mortgages —and chances are, you've also heard a few myths that made you think twice. At CV Mortgage Group, we’re here to clear the air and help you understand the real facts behind reverse mortgages in Canada. Let’s break down some of the most common misconceptions and what’s actually true.  Myth #1: “With a reverse mortgage, you no longer own your home.” Reality: You always retain ownership of your home. A reverse mortgage doesn’t take your home away. You stay on title and remain the legal owner, just like with a traditional mortgage. As long as you continue to meet your mortgage obligations—such as paying property taxes and maintaining the property—you stay in control. Myth #2: “You’ll owe more than your home is worth.” Reality: That’s not allowed in Canada. Thanks to the “no negative equity guarantee,” the amount you owe when your reverse mortgage is due will never exceed the fair market value of your home— as long as mortgage obligations are met. This federally mandated protection ensures that you or your estate are never left with a bill greater than your home's value. Myth #3: “Reverse mortgages are too expensive.” Reality: Reverse mortgages can actually be a cost-effective solution. Yes, you’ll need to cover appraisal costs, legal advice, and a closing fee—but when compared to the costs of downsizing, selling, or relocating , many homeowners find a reverse mortgage to be the more affordable and convenient choice. Myth #4: “Reverse mortgages have higher interest rates.” Reality: It depends on the situation. Reverse mortgage rates are generally higher than traditional mortgage rates, but they don’t require monthly payments . For retired Canadians who may not qualify for a conventional mortgage—or for whom fixed monthly payments are a financial burden—a reverse mortgage offers flexibility and freedom . Myth #5: “You can’t pass your home to your kids.” Reality: You absolutely can. When you pass away, your heirs can choose to repay the reverse mortgage and keep the property . And thanks to the no negative equity guarantee, they’ll never owe more than the home’s market value if all mortgage obligations were met. Still Have Questions About Reverse Mortgages? You're not alone. Reverse mortgages aren’t for everyone, but they can be a powerful tool for retirees who want to access their home equity without selling or moving. Let’s talk about whether a reverse mortgage is the right fit for your retirement goals. Contact us today for expert guidance you can trust.

Financing For A Second Home

By Victor Anasimiv • July 9, 2025
If you’ve been thinking about buying a second property and you’re looking to put some of the pieces together, you’ve come to the right place! Whether you’re looking to buy a vacation property, start a rental portfolio, or help accommodate a family member, there are many reasons to buy a second property (while keeping your existing property), which might make sense for you! Now, while there are many great reasons to buy a second property, there is also a lot to know as you walk through the process. The key here is to have absolute clarity around your why. Ask yourself, why do you want to buy a second property? This isn’t a decision to be taken lightly or one that should be made too quickly. Buying a second property should be a strategic decision that allows you to accomplish your goals, and it should include an assessment of your overall financial health. So with clear goals in mind, the best place to start the process is to have a conversation with an independent mortgage professional. This will allow you to assess your financial situation, outline the costs, and put together a plan to make it happen. While purchasing a second property is similar to buying a primary residence, there are some key differences. Just because you’ve qualified in the past for your existing mortgage doesn’t mean you’ll qualify to purchase a second property. One key difference is the amount of downpayment you might be required to come up with. A property that is owner-occupied or occupied by a family member on a rent-free basis will require less of a downpayment than if the second property will be used to generate an income. So, depending on the property's intended use, you might have to come up with as much as 25%-35% down. This is where strategic planning comes in. Consider unlocking the equity in your existing home to finance the downpayment to purchase your second home. Here are a few ways you can go about doing that: Securing a new mortgage if you own your property clear title Refinancing your existing mortgage to access additional funds Securing a home equity line of credit (HELOC) Getting a second mortgage behind your existing first mortgage Securing a reverse mortgage The conversation about buying a second property should include assessing your overall financial health, leveraging your existing assets to lower your overall cost of borrowing, and figuring out the best way to accomplish your goals. And as it's impossible to outline every scenario in a simple blog post, if you’d like to discuss your goals and put a plan together to finance a second property, connect anytime. It would be a pleasure to work with you.

Buying a Vacation Home? Here’s What You Need to Know

By Victor Anasimiv • July 8, 2025
The idea of owning a vacation home—your own cozy escape from everyday life—is a dream many Canadians share. Whether it’s a lakeside cabin, a ski chalet, or a beachside bungalow, a second property can add lifestyle value, rental income, and long-term wealth. But before you jump into vacation home ownership, it’s important to think through the details—both financial and practical. Start With Your 5- and 10-Year Plan Before you get swept away by the perfect view or your dream destination, take a step back and ask yourself: Will you use it enough to justify the cost? Are there other financial goals that take priority right now? What’s the opportunity cost of tying up your money in a second home? Owning a vacation home can be incredibly rewarding, but it should fit comfortably within your long-term financial goals—not compete with them. Financing a Vacation Property: What to Consider If you don’t plan to pay cash, then financing your vacation home will be your next major step. Mortgage rules for second properties are more complex than those for your primary residence, so here’s what to think about: 1. Do You Have Enough for a Down Payment? Depending on the type of property and how you plan to use it, down payment requirements typically range from 5% to 20%+ . Factors like whether the property is winterized, the purchase price, and its location all come into play. 2. Can You Afford the Additional Debt? Lenders will calculate your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to assess whether you can take on a second mortgage. GDS: Should not exceed 39% of your income TDS: Should not exceed 44% If you’re not sure how to calculate these, that’s where I can help! 3. Is the Property Mortgage-Eligible? Remote or non-winterized properties, or those located outside of Canada, may not qualify for traditional mortgage financing. In these cases, we may need to look at creative lending solutions . 4. Owner-Occupied or Investment Property? Whether you’ll live in the home occasionally, rent it out, or use it strictly as an investment affects what type of financing you’ll need and what your tax implications might be. Location, Location… Logistics Choosing the right vacation property is more than just finding a beautiful setting. Consider: Current and future development in the area Available municipal services (sewer, water, road maintenance) Transportation access – how easy is it to get to your vacation home in all seasons? Resale value and long-term potential Seasonal access or weather challenges What Happens When You’re Not There? Unless you plan to live there full-time, you'll need to consider: Will you rent it out for extra income? Will you hire a property manager or rely on family/friends? What’s required to maintain valid home insurance while it’s vacant? Planning ahead will protect your investment and give you peace of mind while you’re away. Not Sure Where to Start? I’ve Got You Covered. Buying a vacation home is exciting—but it can also be complicated. As a mortgage broker, I can help you: Understand your financial readiness Calculate your GDS/TDS ratios Review down payment and lending requirements Explore creative solutions like second mortgages , reverse mortgages , or alternative lenders Whether you’re just starting to dream or ready to take action, let’s build a plan that gets you one step closer to your ideal getaway. Reach out today—it would be a pleasure to work with you.
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