April Dunn – Jul 5, 2025 / 11:00 am | Story: 559931
Photo: Contributed
There are serious responsibilities for a person who co-signs for a mortgage.
In today’s high-rate, high-price real estate market, many Canadians are struggling to qualify for the mortgages they need—even with solid incomes and a reasonable down payment.
With mortgage qualifying rates now sitting around 6.29% (based on the contract rate plus the mandatory 2% stress test), buying a home has never been more financially challenging.
As a result, more and more homebuyers—especially first-timers—are turning to parents, siblings or close friends for help in the form of a co-signer. If you’ve been asked to co-sign a mortgage or you’re considering asking someone to do this for you, it’s essential to understand what co-signing really means—and what’s at stake.
Co-signing comes with full responsibility
When someone co-signs a mortgage, they’re not simply vouching for the borrower. They are legally committing to the full debt and all the obligations that come with it. If the primary borrower fails to make payments—whether due to job loss, illness, divorce or any other life event—the lender will expect the co-signer to step in and make those payments.
In the eyes of the lender, a co-signer is just as responsible as the main borrower. If the mortgage falls into arrears, the lender can take legal action against either or both parties. That includes, court judgments, wage garnishments, bank account seizures and even claims against personal property or assets. It’s not a shared obligation, it’s a full obligation for each party on the mortgage.
It affects your future borrowing power
Many people don’t realize that when they co-sign for someone else’s mortgage, that debt is now considered part of their own financial profile. Even if you’re not the one making the payments, lenders will count the full monthly obligation when assessing your ability to qualify for future loans, whether it’s for another home, a car or even a line of credit.
In other words, co-signing could significantly reduce your borrowing power and limit your financial flexibility in the years ahead.
Removing a co-signer isn’t automatic
Let’s say the goal is for the co-signer to be removed once the primary borrower is financially stable. That doesn’t happen automatically. When the initial mortgage term ends, the borrower must re-qualify on their own to remove the co-signer and that means meeting all income and debt service requirements at the time of renewal.
If they can’t qualify, the co-signer will remain on the mortgage for another term, potentially extending their commitment several more years beyond what was originally expected.
There may be tax and legal consequences
Co-signing a mortgage isn’t just a financial commitment—it can also carry tax and legal implications. Depending on how the ownership is registered, a co-signer may inadvertently trigger future capital gains tax obligations, particularly if they already own a primary residence.
Additionally, co-signing could affect eligibility for programs such as the First-Time Home Buyers’ Land Transfer Tax Rebate. Let’s not forget the impact on your credit history. If payments are missed, your credit score could take a hit, even if you weren’t the one responsible for making them.
Think before you sign
Co-signing is a generous gesture and can make a world of difference to someone trying to buy their first home or rebuild their financial future. But it’s not a decision to make lightly. Before signing anything, it’s wise to speak with a mortgage professional, as well as a lawyer and a tax advisor, to ensure you fully understand the potential risks.
If you’re considering co-signing or asking someone to co-sign for you, have a conversation. A mortgage professiona will walk you through what it really means and whether it’s the right move for your situation.
Reach out to me at [email protected]. Helping you make informed financial decisions is what I’m here for.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
April Dunn – Jun 21, 2025 / 11:00 am | Story: 557349
Photo: Contributed
A reverse mortgage isn’t just about staying in your home, it’s about unlocking new possibilities.
When most people think about reverse mortgages, they tend to picture someone using the funds to help cover basic living expenses or stay in their home longer.
While that’s certainly true, it barely scratches the surface of what’s possible. Today, I want to highlight a few lesser-known (but powerful) ways Canadian homeowners are using this tool to create more freedom, flexibility, and peace of mind in retirement.
1. Upsizing in retirement? Yes, it’s possible
One of the often-overlooked opportunities with a reverse mortgage is the ability for homeowners to actually upgrade their living situation—even after they’ve retired.
Here’s a great example: A 73-year-old couple in Kelowna decided it was time to move on from their older townhouse. They wanted a more modern, spacious home that better suited their lifestyle and needs. With a reverse mortgage approved for $400,000, they were able to complete the purchase of a beautiful new home that was nearly double the size of their previous one. Even better? They walked away from the deal with approximately $175,000 in cash after the move.
No monthly mortgage payments. No need to draw down their investments. Just smart use of the equity they’d already built up over decades.
2. Investing without triggering taxable events
Perhaps you are interested in investing in real estate—but hesitant to dip into your RRSPs or trigger capital gains by selling off market-based assets? A reverse mortgage can be a strategic, tax-efficient solution. Through this product, homeowners can access up to 55% of their home’s equity, completely tax-free. That means no capital gains taxes, no early withdrawal penalties, and no need to disrupt carefully built investment portfolios.
Take Tanya and Raymond, a couple in their 70s from West Vancouver. They had their eye on a vacation property at Cultus Lake—a place where their children and grandchildren could gather and make lasting memories. Rather than cash in any of their investments, they accessed $875,000 through a reverse mortgage on their $2.5 million home. That was more than enough to purchase a $650,000 lakefront home and a boat—while still retaining a healthy buffer of equity.
No debt stress. No taxable events.
3. Restoring financial control with a no payment mortgage
When life feels uncertain, especially during economic downturns or volatile markets, many retirees look for ways to regain control and reduce financial strain.
One powerful (and often under-utilized) option is using a reverse mortgage to convert home equity into tax-free cash. Unlike a traditional HELOC or private loan, a reverse mortgage requires no monthly payments, ever. This can be an ideal solution if you want to avoid selling investments in a down market or tapping into limited retirement income during turbulent times.
Whether the goal is to manage cash flow, eliminate an existing mortgage, or simply create a buffer for future needs, a Reverse Mortgage provides peace of mind—by transforming home equity into long-term stability.
A reverse mortgage isn’t just about staying in your home, it’s about unlocking new possibilities. From upgrading your lifestyle to purchasing a second property or reducing reliance on taxable income, it can be a smart and strategic option for many Canadians aged 55+.
If you or someone you know is exploring ways to make the most of their retirement years, let’s connect. There are more options than you might think—and I’m here to help you navigate them.
Please email [email protected] or you can book a time for a chat here on my calendar.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
April Dunn – May 24, 2025 / 11:00 am | Story: 552081
Photo: Contributed
Annual mortgage review Is more important
Every year, I remind my clients—and anyone with a mortgage—of the importance of an annual mortgage review. And every year, I often hear the same question: “Why would I need to review something that’s already in place?”
It’s a fair question, but here’s the truth—your mortgage is likely the largest financial commitment you’ll ever make and ignoring it can cost you more than you think.
Compare it to something we all understand—vehicle maintenance. You wouldn’t drive your car for five years without changing the oil, checking the tires or making sure everything’s running smoothly. It’s the same with your mortgage. Without routine check-ups, you risk letting small inefficiencies build into costly problems—or missing out on opportunities to improve your financial performance.
Unfortunately, most Canadians don’t think about their mortgage until the renewal notice shows up—or they suddenly need to borrow more money. At that point, it’s often too late to explore all the best options. An annual review, on the other hand, gives you the chance to stay proactive, make adjustments, and ensure your mortgage is aligned with your current goals.
The truth is, life changes—families grow, careers shift, retirement timelines evolve. And while your life evolves, the mortgage market does too. Interest rates rise or fall, new products are introduced, and better strategies emerge. The mortgage you signed up for even just a few years ago may no longer be the best fit for your situation today.
A mortgage review is not something you can expect from most banks or even financial advisors. Unless you initiate a change or they’re trying to secure your early renewal, your lender likely isn’t revisiting your mortgage details or considering if your product is still the right one for you.
That’s where an annual mortgage review comes in. It’s a smart, strategic way to assess whether your current mortgage is helping or hindering your long-term financial goals.
Whether you’re looking to pay off your mortgage sooner, minimize your interest costs, improve monthly cash flow, access equity for investments, renovations, or debt consolidation or prepare for retirement with a sound financial plan, an annual review gives you a chance to adjust your strategy accordingly.
With interest rates having risen significantly over the past five years, there’s even more urgency. If you’re facing renewal soon, you’re probably already feeling the pressure. Do you have a plan in place to manage increased payments? Have you considered restructuring to protect your cash flow?
A well-timed review can reveal ways to increase your financial stability and even grow your net worth. And just like scheduling an oil change, it’s a small effort now that can prevent major issues—or missed opportunities—down the road.
So, once again this year, I encourage you not to wait. Don’t let your mortgage sit untouched. Make sure it’s working for you, not against you.
You can book a review here or email [email protected]. Your mortgage deserves a tune-up too.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
April Dunn – May 10, 2025 / 11:00 am | Story: 549507
Photo: Contributed
Know what type of mortgage is right for you as rates are changing.
Mortgage rates are on the rise again, prompting concern—and questions—from homeowners and buyers across the country.
After a brief dip earlier this month that saw high-ratio fix-year fixed rates fall as low as 3.64%, the market has since reversed course. Fixed rates, both insured and uninsured, have crept up by 10 to 20 basis points and the trend is consistent across the board.
But it’s not just fixed rates that are being affected. Variable-rate mortgages, once a popular choice for their lower interest rates and flexibility, are becoming more expensive in their own way. The discounts typically offered off the prime rate—currently sitting at 4.95%—are shrinking.
Major lenders like CIBC and Scotiabank have reduced their variable-rate discounts, and this shift is happening gradually across the entire industry.
This rising-rate environment comes at a time of broader economic uncertainty. Global trade tensions, tariffs, and stock market volatility are all contributing to an unpredictable financial landscape. For Canadians navigating mortgage decisions, this uncertainty complicates the choice between fixed and variable rates.
Still, it’s not all bad news for those considering variable rates. Despite current variable-rate pricing inching higher due to smaller discounts, many industry experts believe these rates could ultimately fall in the months ahead. That’s because the Bank of Canada is expected to continue lowering its policy rate in response to broader economic concerns. If the bank cuts aggressively later this year, today’s variable-rate borrowers could end up paying less interest overall compared to those locked into higher fixed rates.
The key, however, is understanding whether a variable-rate mortgage is right for you. If your financial situation can handle some fluctuation—and you’re not overly risk-averse—choosing a variable rate today may prove cost-effective over time.
“Broadly speaking, if a fluctuating mortgage rate won’t put you under worrying financial pressure and if you are comfortable with the inherent uncertainty of a variable rate, I think the variable rate will likely prove to be the cheapest option,” one expert noted.
In addition, variable rates often offer greater flexibility, making them ideal for homeowners expecting a major life change—like a move or job relocation—within the next few years. Variable mortgages tend to come with significantly lower penalties for breaking the term early, which can be a substantial financial advantage.
For homeowners already facing increased payments due to rising rates, here are some practical steps to consider:
1. Review and assess your financial health: Begin by examining your current income, expenses, and financial obligations. Understanding how rising mortgage payments impact your monthly budget is critical to managing them effectively.
2. Adjust your budget: Create or revise your budget to reflect the new reality. Prioritize essential spending and look for opportunities to reduce discretionary costs. These savings can be redirected toward your mortgage or other financial goals.
3. Consult a mortgage broker: Seeking professional advice is one of the most effective ways to navigate changing mortgage conditions. A qualified mortgage broker can offer personalized strategies for managing your mortgage payments, consolidating debt, or even switching products to better align with your long-term goals.
It’s important to remember variable-rate mortgages should not be used as a short-term tactic to “time” the market. Instead, they are best viewed as a long-term strategy for borrowers who value flexibility and can tolerate some level of financial unpredictability.
As we move through this shifting mortgage landscape, informed decision-making will be key. Whether you’re a first-time buyer or a seasoned homeowner, understanding your options and adapting your strategy can help you weather this period of rising rates—and potentially come out ahead.
Please reach out to me at [email protected] if you would like some guidance or you can always book a time for a chat on my calendar. Go to calendly.com/april-dunn
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
