The impact of a 1% rate hike

The Bank of Canada’s July 13th full artillery barrage reverberated across the community and in the international financial markets. Expectations of an inflation number of 8.3% to come, not seen since 1981, prompted the massive move by the institution. No-one predicted a 1% increase, with most seeing a 75 basis point increase as likely, and a few assuming a 50 basis point hike. Fiscal and inflation hawks welcomed the increase, seeing it as absolutely necessary given inflation continues to rise. Not since the economic and dot-com boom era of the late 1990s has Canada seen such a massive and sudden increase in the cost of money.

The impact of the hike was immediate for variable rate mortgage holders and borrowers. Prime rates went up in response, and therein so will the cost of servicing other pools of debt. Only fixed rate mortgage holders were spared from the increase. Some examples of mortgage cost increases reflective of the Jul. 13th hike are below:

  • $500,000 mortgage: $16,000 in new costs over 5 years
  • $750,000 mortgage: $24,000 in new costs
  • $1,000,000 mortgage: $32,000

On a modest $400,000 mortgage taken out over 25 years at 3%, monthly costs would come to just under $1,900 a month. But at 4%, these costs increase to over $2,100 a month. That $200 may not be much for a lot of people, but for many who are heavily indebted, feeling the effects of inflation, or stretched for income, it can make a massive difference in how they live. There are more and more stories of Canadians who took on floating rate mortgages now switching to fixed rate mortgages, even if it costs them more in the short term because of the anticipation of more rate increases being on their way. If you’re looking to change your mortgage and you’re self-employed for example, consider the options and flexibility of a private mortgage with Tembo in Ontario.

For years, Tembo has provided second mortgages to self employed clients who need access to their cash ASAP. Many of these clients need loans for debt consolidation, renovations, deposits for the purchase of a new home or something else. Tembo has helped hundreds of clients receive equity advances through private second mortgages often within 48 hours*. This is a great tool if you need your money quickly and don’t want to wait weeks or may not qualify with a bank.

Self-employment has been rising steadily in Canada since 2008, with 2.5 million self-employed Canadians then and almost 3 million recorded by Statscan just before the pandemic hit. Getting additional debt or a mortgage as a self employed Canadian can be complicated. Some banks require the purchase of default insurance ahead of any possible approval of a mortgage worth over 65-90% of equity. They can also require extensive documentation of at least two years of accounts and bank activity for self-employed people. If you’re self-employed and are in need of an equity advance, or any financial solutions through a private second mortgage, please visit and give us a call at 1-844-238-6717!

Mixed Real Estate Conditions and a Potential BOC Rate Cut


The Greater Vancouver Real Estate Board released rough real estate stats earlier this week. Reports showed that year-over-year Feb. residential home sales fell over 30%. This represents the worst Feb. sales total since 1985, over 40% below the last decade’s average.

Detached homes lasted roughly 55 days on the market before sale, while townhouses averaged 39 days and apartments and condos at 40. Prices also fell by over 6% year-over-year, while at the same time, inventories are piling up. Total listings rose by over 48% year-over-year to almost 11,600.

In Toronto, prices rose by 1.6% while listings fell 6.2%, sales fell by 2.4%. Canada’s banks are also feeling the heat of an inconsistent real estate market. Credit losses rose by double digits at the big 5. The same credit losses were seen in the Australian banking and real estate markets as well and in other countries dependent on real estate.

Economic stats have dipped into such negative territory so quickly that news is spreading of the possibility that the BOC may cut rates soon. Tembo has consistently made the point that the BOC will stick to an aggressive and consistent rate hike trajectory until economic conditions change. While most experts believe that rates will stay put, the potential for a cut will grow if economic conditions continue to worsen. As we previously reported, the economic recently contracted by a very narrow margin.

On an additional note, the City of Toronto will convene on Thursday, March 7th to pass its 2019 budget. The budget outlines a massive drop in land transfer tax revenues because of stalling real estate conditions. The City has become addicted to the previously perpetually rising land transfer tax which financed large increases in city spending. That era has come to a close.

On The Value Of Land In The GTA

In May of 2017, the RGF Real Estate Fund LP bought the Toronto Region Board of Trade’s Woodbridge area golf course. The 290-acre course was iconic, the sight of many golf tournaments, networking events, and business function since its opening in the mid 1960s. Many golf courses are being sold across North America. High land values, declining golf use, and enormous demand for housing is driving the changes.

Only one third of the land sold can be developed; roughly 100 acres. The other two thirds of the sold golf course are green space off limits to real estate construction. Even though this is the case, the developer has said that the capacity to develop the 100 acres will be very profitable. The developer plans some 600 detached residential units and 60 townhomes. This plan was presented to the city of Vaughan and has yet to be fully approved. Many local residents are opposed to the development proposal, fearful of increased traffic, noise, and pollution.
In April of 2015, the 400 acre York Downs golf course was sold for $412 million. Both York Downs and the Country Club are courses adjacent to valuable suburban real estate and they are similarly sized. Assuming a similar valuation, it can be assumed that RGF bought the Country Club for roughly $300 million. Despite the fact that only a third of the course can be developed, this massive purchase will likely be very profitable. These transactions highlight the extent of housing demand in the GTA.

Why You Should List Your Home This Winter

Many are under the impression that winter is not the right time to list your home.  With all the mess of snow, cold weather and poor driving conditions, there aren’t many factors to motivate you to get your home ready for sale.

There are, however, some helpful examples of why winter is the perfect time to put your house on the market.  Below, we’ve included some of the major key points that some people forget about during those cold winter months.

  1. January is a perfect time for a fresh start! Think of the resolutions everyone makes at the beginning of the New Year. It is a time for new goals, new timelines and new beginnings.  Why not use this opportunity for a new beginning in a new home? Maybe you want to upgrade, downsize, or find a brand new neighbourhood.  The possibilities are endless.
  2. It’s easier for your house to stand out on the market. Think about it…if there are fewer houses for sale, it will be much easier for yours to rise to the top of the list. This is especially true if you do everything you can to prepare for showings.  Winter months are also the perfect time to make your house look warm and cozy.  Turn your fireplace on for showings, throw some warm blankets on your couch, and even light a few candles.  Your house may end up looking better than it did before!
  3. You will end up with more motivated buyers at your showings. If someone is ready to bundle up and go check out houses during our Canadian winters, they definitely mean business. These people are ready to buy, and are not looking to waste any time while they’re at it. Another perk regarding this is that you will probably end up with less people trekking their snow covered boots through your home!

Preparing to sell/Have you sold your home, and can now use an advance on your equity before closing day, perhaps you need money to consolidate your current debts? Tembo Financial can help! Tembo offers this unique service to homeowners in Ontario and the GTA. You could receive your money in as little as 48 hours with no credit check and no appraisal* for expenses that matter to you. Don’t wait, start today!


*Subject to qualification.

The Real Estate Transaction: Experts & Agents

Once you’ve decided to buy a home, whether it’s your very first purchase, a downsize, or a need for more room, the excitement and fear can be overwhelming. A home is one of your greatest financial investments, and you want to make sure your investing your money in the best possible option, right?

This is why it’s so important that home buyers do their research on the people and advice they’ll need throughout the process. The purchasing process involves many different working parts, each which play an integral role in your new home purchase. In the list below, we’ve provided some of the most pivotal experts and agents required in the home buying process, what they do, and how to pick the right one.

The Real Estate Agent: The Real Estate Agent will walk you through, step by step, the process of house hunting, showings, home inspections, drafting and submitting an offer, subsequent inspections, and closing of your purchase. A good real estate agent knows what your looking for, is knowledgeable about the area, and has your best interest in mind.  Finding a good agent can be difficult, as the growing market allows for an influx of new agents, but researching will help your decision. Ask friends for references, meet with a few agents, have them compile a plan of action for you. Real estate is a business of service, and you should look to receive professional and helpful service throughout the process.

The Mortgage Broker: The Mortgage Broker plays an integral step in the purchasing process, as they ensure that you receive the mortgage funding necessary to complete your purchase. If you’re still searching for the perfect home, a mortgage broker can collect your financial documents and provide you with a preapproval for a certain price range. This means, once you’ve decided to purchase a home, your less likely to require a financing clause, or to worry about acquiring adequate financing after the fact. If you’ve offered on a home without preapproval, a mortgage broker will be able to explain your financial situation, and provide you with options as to your mortgage financing, abilities, and options. A good mortgage broker will ensure that you’re not spending more than you’re capable, and that your financial situation remains comfortable. References, as in all cases, are the best way to find a mortgage broker.

The Home Inspector: The Home Inspector, upon request, will provide a thorough report on the state of the home you’re interested in purchasing. Within an offer, you have the option to include an inspection clause into your agreement. This means, if you find anything detrimentally wrong upon inspection of the home, you’re able to cancel or amend your offer. Finding a good home inspector is similar to finding a good real estate agent, as your best references will likely come from past clients. As well, you’ll now have your real estate agent to look to for advice and guidance in finding the best home inspector.

The Trade Experts: Trade Experts can involve a variety of field experts, such as those knowledgeable about well and septic systems, heating and cooling experts, or a general contractor. Looking for a second opinion on issues uncovered through your home inspection, or from information relayed by the seller, allows you to feel secure in your purchase. Although these experts can sometimes be costly, they’ll likely save you from investing in a home which requires more work or problems than meets the eye. There are tons of great websites, such as, who allow past clients to leave feedback and commentary on their work with trade experts. These reviews and references are a great place to start your search, as they open a wide variety of verified options for you to choose your best fit.

The Real Estate Lawyer: The Real Estate Lawyer plays an important role in the home buying process, as their team ensures that your purchase is legal, safe, and without mistakes. Your lawyer will look over all documents, ensure title is free to be transferred, and work with the seller’s lawyer to ensure a smooth transition of ownership. If you currently have a lawyer, and they do not specialize in real estate law, ask them to refer you to a colleague. If not, ask friends and family to recommend the lawyers they’ve used in the past.

Have you sold/are in the process of selling your home, and now can use an advance on your equity before closing day, perhaps you need money for your new purchase deposit?  Tembo Financial can help!  Tembo offers this unique service to homeowners in Ontario and the GTA.  You could receive your money in as little as 48 hours with no credit check and no appraisal* for expenses that matter to you.  Don’t wait, start today!


*Subject to qualification.