If you own rental property, the “Great Reset” is likely on your mind. Many investors who locked in historic lows a few years ago are now staring down a renewal notice with rates that look significantly different.

When your mortgage payment climbs but your rental income stays steady, that once-comfortable cash flow can turn thin—or even negative—overnight. But before you consider offloading a long-term asset, there are several strategic ways to bridge the gap.

The Reality of Today’s Market

The shift from 2-3% rates to current market levels is a significant hurdle. For a typical investment property, this can mean a monthly payment increase of hundreds, if not thousands, of dollars.

The goal right now isn’t necessarily to find the “lowest rate” in history, but to optimize your debt structure to protect your monthly liquidity.

Three Ways to Improve Your Cash Flow

If your renewal is approaching in the next 6–12 months, consider these maneuvers:

• Re-Amortization: If you have built up equity, we can look at “stretching” your remaining balance back out to a 30-year amortization even 40 years. While this increases the total interest paid over the life of the loan, it significantly lowers your immediate monthly obligation, keeping your business cash-flow positive.

• Rental Offset Optimization: Not all lenders treat rental income the same way. Some use a “Rental Worksheet” that only credits 50% of your rent, while others use a “Net Rental Offset” which is much more generous. Switching to a lender with a more favorable offset can help you qualify for better terms or additional financing.

• The “Hybrid” Approach: Some investors are choosing shorter terms (1–2 years) or even adjustable rates. The bet here is that if rates soften in the near future, you aren’t locked into a high 5-year fixed rate, allowing you to pivot sooner.

Real-World Scenarios (Case Studies)

Note: Names of financial institutions have been withheld to focus on the strategy

Why Proactive Planning Matters

Waiting for your bank’s renewal letter 30 days before the deadline is a recipe for stress. Most lenders will simply offer you their “posted” rate, which is rarely the most competitive option for an investor.

By looking at your portfolio now, we can run the numbers on multiple lenders to see who offers the best rental income treatment and flexibility.

Pro Tip: Your mortgage is a tool, not just a debt. In a high-rate environment, the “best” mortgage is the one that keeps your portfolio sustainable until the market cycles again.

Let’s Run Your Numbers

Don’t let a renewal notice dictate your investment strategy. Whether you want to explore re-amortization or see which lenders are currently “investor-friendly,” I’m here to help.

The post Navigating the “Cash Flow Crunch”: Smart Strategies for Your Upcoming Mortgage Renewal appeared first on Morning Lee - Mortgage | Realty | Business.

Is your mailbox filling with mortgage renewal statements that feel more like unsettling forecasts?

You’re not alone. Countless Canadian rental property owners are facing a perfect storm: interest rates have climbed significantly, and the era of ultra-low monthly payments is behind us. This squeeze on cash flow can turn a reliable investment into a source of constant stress, especially as renewal dates loom.

But this isn’t just a challenge—it’s a critical juncture to reassess your strategy. Proactive planning with a specialist can transform this pressure into an opportunity to strengthen your financial position for the long term.

The Landlord’s Dilemma: Renewal Reality vs. Cash Flow Crunch

When you initially financed your rental property, the math likely worked perfectly. Today, the equation has changed. Renewing at a significantly higher rate with a traditional bank could mean absorbing a monthly payment increase of hundreds or even thousands of dollars. This directly eats into your profit margin and can jeopardize the viability of your investment.

Simply accepting the posted renewal offer from your current lender is rarely the only—or best— course of action. The market has evolved, and so have the solutions.

Your Strategic Advantage: Bespoke Mortgage Solutions for Investors

This is where specialized mortgage brokerage makes all the difference. We don’t work for a single bank; we work for you, accessing a wide network of lending partners, including institutional lenders, credit unions, and private lenders that cater specifically to real estate investors.

Our goal is to find a financing structure that aligns with your investment goals and current reality.

Here are a few strategies we can explore:

• Strategic Refinancing: Unlock your property’s equity to consolidate higher-interest debt or create a cash reserve for emergencies or future investments.

• Alternative Lender Solutions: Access lenders who evaluate deals based on the property’s merits and potential rental income, often with more flexibility than traditional banks, especially for unique properties or portfolios.

• Creative Structures: Utilize tools like interest-only payments for a short term to dramatically lower monthly outlays or arrange hold mortgages to bridge gaps during renovation or repositioning phases.

Comparing Your Options: A Simplified View

A Real-World Scenario: Turning Pressure into Strategy

Consider a landlord with a duplex carrying a $500,000 mortgage coming up for renewal. Their old rate was 2.9%, with a monthly payment of about $2,045. A straight renewal at today’s higher bank rate could push that payment over $3,000.

Our Action Plan:

1. Analysis: We reviewed the entire portfolio, not just this one property. The duplex had substantial equity and strong rental income.

2. Solution: We facilitated a refinance with an alternative lender at a competitive rate, but with an interest-only payment period for the first year. This kept monthly payments manageable during the rate transition. The cash flow is much better.

3. Result: The landlord accessed $75,000 in equity to pay off a high-interest personal line of credit used for upgrades. Their cash flow improved immediately, and they used the remaining capital for strategic updates to increase rent.

Your Next Step: A Confidential Portfolio Review

The best solution starts with a clear understanding of your unique numbers. Before you make any

decision, let’s conduct a no-obligation review of your situation.

In a brief consultation, we will:

• Analyze your current mortgage statements and renewal notices.

• Assess the rental income and expenses for each property.

• Explore multiple lender options side-by-side with clear, understandable terms.

• Map out a 1-3 year strategy to protect your cash flow and investment.

Don’t let a market shift undermine years of hard work and investment. By exploring alternatives and crafting a smart strategy, you can navigate this period of higher rates with confidence.

Ready to explore your options? Reach out today to schedule your confidential Portfolio Pressure Test. It’s time to move from worrying about your renewal to securing your investment’s future.

The post Rental Property at a Crossroads? Navigate Rising Rates and Secure Your Investment’s Future appeared first on Morning Lee - Mortgage | Realty | Business.

Canadian Labour Force Survey for January was weaker than expected. Employment declined by 24,800 (-0.1%), and the employment rate decreased 0.1 percentage points to 60.8%. This followed only a small gain in December and was the first decline in the employment rate since August 2025. 

In January, a decrease in part-time employment (-70,000; -1.8%) was partly offset by a gain in full-time work (+45,000; +0.3%). Compared with 12 months earlier, overall employment was up by 134,000 (+0.6%), driven by gains in full-time work (+149,000; +0.9%).

The number of private sector employees fell by 52,000 (-0.4%) in January, partly offsetting a net increase of 128,000 (+0.9%) in the last three months of 2025. There was little change in the number of public sector employees (+13,000; +0.3%) and self-employed workers (+14,000; +0.5%) in January.

The jobless rate fell by 0,3 percentage points to 6.5% in January, driven by a decline in the number of people searching for work. The unemployment rate in January was the lowest since September 2024, down 0.6 percentage points from the recent high of 7.1% recorded in August and September 2025.

The labour force participation rate—the proportion of the population aged 15 and older who were employed or looking for work—decreased 0.4 percentage points to 65.0% in January, following an increase of 0.2 percentage points in December. The decline in January was concentrated in Ontario, the hub of the auto sector, manufacturing generally, and steel production. Recent data also show that the number of entry-level positions has fallen sharply, likely due to artificial intelligence replacing these positions. 

The unemployment rate fell across most major demographic groups in January, largely reflecting declines in the number of job searchers.

Infographic 2 

Unemployment rate by age group, January 2026

Manufacturing jobs were hard hit by the tariffs and trade uncertainty. 

The number of people working in manufacturing fell by 28,000 (-1.5%) in January, bringing employment down to levels last observed in August 2025. The decline in January was concentrated in Ontario. On a year-over-year basis, overall employment in manufacturing was down 51,000 (-2.7%).

Chart 3 
Employment change by industry, January 2026

There were also fewer workers in educational services (-24,000; -1.5%) and public administration (-10,000; -0.8%) in January. Employment in both industries was little changed year over year.

On the other hand, employment increased in information, culture and recreation (+17,000; +2.0%) in January, continuing an upward trend that began in September 2025. On a year-over-year basis, employment in this industry was up 30,000 (+3.6%) in January.

Employment also rose in business, building and other support services (+14,000; +2.1%) in January, the first increase since October 2024. Employment in this industry had previously followed a downward trend through most of 2025. Compared with 12 months earlier, employment in business, building and other support services was down 38,000 (-5.3%) in January.

Bottom Line

The Bank of Canada has reiterated that its primary mandate is price stability, effectively leaving the task of closing the output gap to fiscal authorities. Fiscal support delivered through large capital-spending projects will be implemented too slowly to materially offset near-term weakness in activity. If layoffs persist at their recent pace and the United States were to withdraw from the Canada‑US‑Mexico Agreement, the case for an additional round of monetary easing would strengthen markedly.

Absent that downside scenario, the more plausible path is a slow and limited normalization of policy. Market pricing currently anticipates that the next move by the Bank of Canada will be to raise the overnight policy rate, but this is unlikely until 2027. If labour force weakness and higher mortgage costs associated with this year’s huge volume of mortgage renewals, in combination with AI-induced job losses, weaken the economy, the Bank of Canada might be willing to cut the overnight policy rate later this year. Uncertainty has already markedly weakened the housing market, despite the reduction in home prices and mortgage rates over the past year.

Dr. Sherry Cooper

The post Canadian Jobs Growth Slowed Markedly in January as the Unemployment Rate Fell Sharply to 6.5% appeared first on Morning Lee - Mortgage | Realty | Business.

For many rental property owners, the past few years were smooth sailing. Low interest rates kept mortgage payments manageable, cash flow steady, and long-term planning simple.

Now, as mortgage renewals approach in a higher-rate environment, many landlords are facing a difficult reality:

Payments are going up — but rents and expenses don’t always move with them.

If you own one or more rental properties and your renewal is coming soon, this is the moment that matters most.

Renewal Is No Longer “Just a Renewal”

In today’s market, renewal is not automatic and it is not neutral.

A higher rate at renewal can mean:

•Hundreds (or thousands) more in monthly payments

•Reduced or negative cash flow

•Pressure on personal finances

•Tough decisions made under time constraints

For owners with multiple properties, one renewal can affect the entire portfolio.

Doing nothing — or simply accepting the first renewal offer — can quietly lock you into years of unnecessary stress.

The Real Problem Isn’t the Rate — It’s Cash Flow

Many landlords focus only on interest rates.

But what actually keeps an investment alive is monthly cash flow.

At renewal, the right mortgage structure can:

•Reduce monthly payment pressure

•Improve stability across your portfolio

•Buy time to adjust rents, expenses, or strategy

•Protect your long-term investment plan

The wrong structure can do the opposite — even at a “reasonable” rate.

Strategic Options Many Rental Owners Overlook

Depending on your situation, there may be solutions that are not always obvious:

Restructuring the Mortgage

Adjusting amortization, payment terms, or structure can significantly improve monthly cash flow — especially in a high-rate cycle.

Using Equity More Efficiently

If your rental property has grown in value, equity can sometimes be structured to:

•Support cash flow

•Offset higher payments

•Create flexibility without selling assets

Consolidating High-Cost Debt

Lines of credit, short-term financing, or fragmented loans can quietly drain cash flow. Proper consolidation can simplify and stabilize your finances.

Planning Before Renewal Pressure Hits

Time equals options. The earlier you plan, the more control you have.

Why Work With Morning Lee

In a higher-rate market, experience and strategy matter more than ever.

With Morning Lee, the focus is not just on getting a mortgage — it’s on building a financing

solution that works with your rental portfolio, not against it.

What clients value most:

•A clear understanding of cash-flow challenges

•Portfolio-level thinking, not one-property decisions

•Access to multiple financing strategies

•Straightforward explanations, no lender bias

•Planning that looks beyond this renewal

The goal isn’t just approval.

The goal is sustainability and control.

Every Rental Portfolio Is Different — Your Solution Should Be Too

Some owners need:

•Lower monthly payments

•Short-term relief with long-term planning

•Flexibility for future renewals

•A bridge strategy while rents or income adjust

There is no one-size-fits-all solution — and that’s exactly why a proper review matters before renewal.

Final Thought

Higher rates don’t mean rental investing no longer works.

They mean financing decisions matter more than ever.

If your renewal is approaching and cash flow feels tighter than before, this is the time to review your options calmly — before pressure forces rushed decisions.

Morning Lee helps rental property owners navigate renewals with clarity, structure, and a long-term view.

The post Higher Rates, Tighter Cash Flow?How Rental Property Owners Can Regain Control Before Renewal appeared first on Morning Lee - Mortgage | Realty | Business.

The Bank of Canada once again held the policy rate steady at 2.25%. This is the bottom of the Bank’s estimate of the neutral overnight rate, where monetary policy is neither expansionary nor contractionary. With inflation hovering just above 2% and core inflation falling to 2.5%, the Governing Council sees the current overnight rate as appropriate, “conditional on the economy evolving broadly in line with the outlook published today. Inflation was 2.1% in 2025, and the Bank expects inflation to stay close to the 2% target over the projection period, with trade-related cost pressures offset by excess supply.”

According to the press release, “Economic growth is projected to be modest in the near term as population growth slows and Canada adjusts to US protectionism. In the projection, consumer spending holds up, and business investment gradually strengthens, with fiscal policy providing some support. The Bank projects growth of 1.1% in 2026 and 1.5% in 2027, broadly in line with the October projection. A key source of uncertainty is the upcoming review of the Canada-US-Mexico Agreement.”

In the United States, economic growth is supported by strong consumption and a surge in AI investment. The Fed stood pat today, but is expected to cut rates three times in the second half of this year. The US Federal Reserve is likely to cut its policy rate by 25 bps to 3.5%-3.75% as President Trump lobbies Chair Jay Powell for more dramatic rate cuts.

Data released yesterday showed that US consumer confidence plummeted in January to the lowest level in 12 years on more pessimistic views from Americans worried about the nation’s economy, inflation and a weakening labour market.

The Conference Board gauge decreased to 84.5 from an upwardly revised 94.2 last month, data released Tuesday showed. The figure was the lowest since May 2014 and fell short of all estimates in a Bloomberg survey of economists.

Bottom Line

The Bank of Canada has shown its willingness to bolster the Canadian economy amid unprecedented trade uncertainty. At the same time, Canada is working hard to establish alternative trade partners. Even the vast Chinese market cannot replace the US in terms of proximity and cost-effectiveness, given the high transport costs. China has stepped up its purchases of Canadian oil to record levels. There is no single market the size of the US market to replace exports of steel and aluminum.

“Employment weakened in the first half of 2025 as sectors hit hard by U.S. tariffs cut production and jobs,” Macklem said. “In recent months, overall employment has risen, led by hiring in services like health care, and slowing population growth is reducing the number of new entrants into the labour market.”

US tariffs have had a significant negative impact on Canadian exports. While the push for trade diversification is welcome, export growth is expected to be modest over the next two years.

“This restructuring, including more diversified trade and a more integrated internal market, will support some recovery in our productive capacity,” Macklem said. “But it will take some time.”

As outlined in its Monetary Policy Report (MPR), the top risk to the outlook is the CUSMA review. The bank highlights that Canada currently has an effective US tariff rate of 5.8%, thanks to the exemptions under the North American trade pact. It warned that an unfavourable outcome to negotiations could make Canadian exports less competitive.

“Faced with weaker demand, exporters would reduce production, investment and hiring,” the report said. “This would spill over into the broader economy, weighing on sectors such as services and putting Canadian GDP on a lower path.” 

“Government spending on infrastructure is projected to rise, mainly reflecting commitments in provincial budgets,” the report said. “Additional federal capital transfers will also bolster infrastructure investment.”

In this environment, market-driven interest rates have risen. The 5-year bond yield is once again attempting to break through 3%. The 2-year bond at 2.67% is well above the overnight rate, and the Canadian dollar is rising. Lenders have recently increased fixed mortgage rates, which will be more popular if people generally expect rates to rise.

The key to the outlook is the continuation of CUSMA. We will likely suffer several more months of uncertainty before we know the fate of the trade agreement. In the meantime, PM Carney will continue to encourage trade deals in non-US countries.

Dr. Sherry Cooper

The post Bank of Canada Holds Policy Rate Steady appeared first on Morning Lee - Mortgage | Realty | Business.

Today’s release of December housing data by the Canadian Real Estate Association (CREA) showed the market ended 2025 with declining sales and prices due to ongoing economic uncertainty. 

The number of home sales recorded over Canadian MLS® Systems declined 2.7% m/m in December. On an annual basis, transactions totalled 470,314 units last year, a 1.9% decrease from 2024, despite a series of Bank of Canada rate cuts.

“There doesn’t appear to have been much rhyme or reason to the month-over-month decline in home sales in December, which was simply the result of coincident but seemingly unrelated slowdowns in Vancouver, Calgary, Edmonton, and Montreal,” said Shaun Cathcart, CREA’s Senior Economist. “For that reason, it would be prudent for market observers to resist the temptation to trace a line from the end of 2025 into 2026. Rather, we continue to expect sales to move higher again as we get closer to the spring, rejoining the upward trend that was observed throughout the spring, summer, and early fall of 2025.”

New Listings

New supply declined by 2% on a month-over-month basis in December, marking a fourth straight monthly drop. Combined with a slightly larger decrease in sales activity in December, the sales-to-new-listings ratio eased to 52.3% from 52.7% in November. This remains close to the long-term average national sales-to-new listings ratio of 54.9%. Readings roughly between 45% and 65% are generally consistent with balanced housing market conditions.

There were 133,495 properties listed for sale on all Canadian MLS® Systems at the end of December 2025, up 7.4% from a year earlier but 9.9% below the long-term average for that time of year. Inventories have been falling since May 2025 owing to the mid-year rally in demand, meaning active listings could be back posting year-over-year declines around the time this year’s spring market gets going.

“While we remain in the quiet time of year for a little while longer, the spring market is now just around the corner, and it is expected to benefit from four years of pent-up demand, and interest rates that at this point are about as good as they are going to get,” said Valérie Paquin, CREA Chair. “Barring any further major uncertainty-causing events, that means we should see a more active market this year.”

There were 4.5 months of inventory on a national basis at the end of December 2025, up slightly from 4.4 months, which had been the measure since August. The long-term average for this measure of market balance is 5 months of inventory. Based on the measure of one standard deviation above and below that long -term average, a seller’s market would be below 3.6 months, and a buyer’s market would be above 6.4 months.

Home Prices

The National Composite MLS ® Home Price Index (HPI) fell by 0.3% between November and December 2025. It was similar to the dip recorded in November and could reflect some sellers making price concessions to sell properties before the end of the year. Most of the overall price softening in December came from markets in Ontario’s Greater Golden Horseshoe region, which was hit hard by US tariffs.

The non-seasonally adjusted National Composite MLS® HPI was down 4% from December 2024. Under the surface, year-over-year declines are larger for condo apartments and townhomes, and smaller for one- and two-storey detached homes.

Bottom Line

Today’s data end a year that saw house prices drift lower despite falling interest rates, as a simmering trade war with Canada’s largest trading partner caused higher unemployment and considerable job uncertainty. Though US tariffs apply to a limited volume of Canadian goods, and the economy didn’t tip into a recession, the unpredictability of President Donald Trump’s trade policy has stoked a sense of economic insecurity.

In some regions, the price decline has now wiped out a sizable proportion of the gains homeowners saw during the torrid Covid market from 2020 to 2022, when overnight interest rates were reduced to a record-low 25 basis points. Back then, ultralow interest rates caused home prices to surge, particularly in smaller cities to which remote workers fled to take advantage of a lower cost of living.

Vancouver and Toronto remain by far the most expensive large cities. The benchmark price in Greater Vancouver was C$1.14 million in December. In the Toronto region, it was C$962,300 – down about 6% from a year earlier.

With many regional markets soft, sellers are now pulling back. New listings dropped 2% in December from the previous month, the fourth straight monthly decline. But the total number of homes on the market last month was still 7.4% higher than the previous year. That’s the equivalent of about 4.5 months of inventory.

We concur with the view that there is considerable pent-up demand among potential first-time buyers who will likely dip their toe in the market once winter passes. This year, we also see a record volume of refinances and renewals, which will increase monthly mortgage payments and dampen household purchasing power.

Dr. Sherry Cooper

The post Housing Activity Fell in December, Rounding Out A Disappointing Year appeared first on Morning Lee - Mortgage | Realty | Business.

The Consumer Price Index (CPI) held steady at 2.2% year over year in November, as core inflation continued to ease. Accelerating costs for food and some other goods were offset by slowing price growth for services.

In November, prices for services rose 2.8% year over year, compared with a 3.2% increase in October. Prices for travel tours declined 8.2% last month following a 2.6% increase in October. Monthly, these prices fell 12.0%, as lower demand for destinations in the United States put downward pressure on the index.

Prices for traveller accommodation fell to a greater extent on a year-over-year basis in November (-6.9%) than in October (-0.6%). The most significant contributor to the lower prices was Ontario (-20.2%), partially due to a base-year effect from a swift monthly increase in November 2024 (+11.0%), which coincided with a series of high-profile concerts in Toronto.

Lower prices for travel tours and traveller accommodation, in addition to slower growth for rent prices, put downward pressure on the all-items CPI.

Offsetting the slower growth in services on an annual basis were higher prices for goods, driven by increases in grocery prices and a smaller decline in gasoline prices. Excluding gasoline, the CPI rose 2.6% for the third consecutive month.

The CPI rose 0.1% month over month in November. On a seasonally adjusted monthly basis, the CPI increased 0.2%.

Grocery Price Inflation Highest Since the end of 2023

Prices for food purchased from stores rose 4.7% year over year in November after increasing 3.4% in October. The increase in November was the largest since December 2023 (+4.7%). The main contributors to the acceleration in November 2025 were fresh fruit (+4.4%), led by higher prices for berries, and other food preparations (+6.6%).

In November, prices for fresh or frozen beef (+17.7%) and coffee (+27.8%) remained significant contributors to overall grocery inflation on an annual basis. Higher beef prices have been driven, in part, by lower cattle inventories in North America. Adverse weather conditions in growing regions have affected coffee prices, which have risen amid American tariffs on coffee-producing countries, contributing to higher prices for refined coffee.

On a monthly basis, grocery prices rose 1.9% in November, the largest month-over-month increase since January 2023.

Acting as a bit of a counterweight, shelter costs—the earlier inflation villain—continue to moderate. Owned accommodation expenses are now up just 1.7% y/y, the slowest pace in almost a decade amid sagging home prices. Rent inflation remains sticky, but did tick down to 4.7% y/y last month. Keep an eye on electricity prices, which have been a major issue in the US, where AI data centers consume large amounts of electricity. The cost of electricity jumped 1.5% in the month and is now up 3.4% y/y. Telephone services have also leapt recently, after falling heavily the past two years; they are now up 11.7% y/y, the fastest increase since 1982.

The good news is that inflation will average just over 2% for all of 2025, down from 2.4% last year and the lowest annual tally in five years. The less-good news is that this moderation was mainly due to the removal of the consumer carbon tax, which alone shaved about half a point off the annual average.

The main core inflation measures decelerated in November, with the BoC’s two measures both easing two ticks to 2.8% y/y (and both up just 0.1% m/m in seasonally adjusted terms). And, ex food & energy prices also rose just 0.1% m/m, cutting the annual rate three ticks to a moderate 2.4% y/y pace.

Bottom Line

This report confirms the Bank’s hold on the policy rate. Aside from food prices, inflation seems to be dissipating. The overall economy is in better-than-expected shape as the upward revisions in GDP since 2022 were largely the result of better than expected productivity growth–long a big concern for the Canadian economy. 

The backdrop of better growth and lower inflation will keep the Bank of Canada on hold for most of 2026, as the next move in rates is likely to be a hike, but not until late next year. In the meantime, the biggest loser in the past year has been the housing market. 

Today’s release of existing home sales by the Canadian Real Estate Association suggests particularly weak activity in Ontario, the region hardest hit by the tariff uncertainty. A cautious Bank of Canada will monitor the effect of rapidly rising food prices on inflation expectations. With any luck at all, core inflation will continue to decelerate, keeping the Bank on the sidelines for much of next year. 

Hopefully, greater clarity on the Canada-Mexico-US agreement will be forthcoming in the New Year. Reduced uncertainty is the key ingredient required for a rebound in housing activity, particularly in the regions of Ontario and Quebec hardest hit by the tariffs. 

Dr. Sherry Cooper

The post Good News on the Inflation Front Will Keep the BoC on the Sidelines appeared first on Morning Lee - Mortgage | Realty | Business.

The Bank of Canada held the policy rate steady at 2.25%. This is the bottom of the Bank’s estimate of the neutral overnight rate, where monetary policy is neither expansionary nor contractionary. With inflation hovering just above 2% and core inflation between 2.5% and 3%, the Governing Council sees the current overnight rate as “about right.”

According to the press release, “The Bank expects final domestic demand to grow in the fourth quarter, but with an anticipated decline in net exports, GDP will likely be weak. Growth is forecast to pick up in 2026, although uncertainty remains high and large swings in trade may continue to cause quarterly volatility.”

In the United States, economic growth is supported by strong consumption and a surge in AI investment. The US Federal Reserve is likely to cut its policy rate by 25 bps to 3.5%-3.75% as President Trump lobbies Chair Jay Powell for more dramatic rate cuts.

Bottom Line

The Bank of Canada has shown its willingness to bolster the Canadian economy amid unprecedented trade uncertainty. At the same time, Canada is working hard to establish alternative trade partners. Even the vast Chinese market cannot replace the US in terms of proximity and cost-effectiveness, given the high transport costs. China has stepped up its purchases of Canadian oil to record levels. There is no market the size of the US market to replace exports of steel and aluminum.

The US will also suffer economic impacts from withdrawing from the Canada-US-Mexico free trade deal. A renegotiation of the contract is likely to come before the end of next year. As of now, the US is signalling their desire to exit the agreement. We can only hope that cooler heads will prevail.

These are challenging times, the surprisingly strong economic data notwithstanding. Consumer and business confidence is down, and the housing market is still weak, especially in the Greater Goldeen Horseshoe. 

In this environment, market-driven interest rates have risen sharply. The 5-year bond yield is once again attempting to break through 3%. The 2-year bond at 2.67% is well above the overnight rate, and the Canadian dollar is rising. Lenders have recently increased fixed mortgage rates, which will be more popular if people generally expect rates to rise.

The key to the outlook is the continuation of CUSMA. We will likely suffer several more months of uncertainty before we know the fate of the trade agreement.

Dr. Sherry Cooper

The post Bank of Canada Holds Policy Rate Steady appeared first on Morning Lee - Mortgage | Realty | Business.

The Consumer Price Index (CPI) rose 2.2% on a year-over-year basis in October, down from 2.4% in September. The all-items CPI decelerated largely due to gasoline prices, which fell at a faster year-over-year pace in October (-9.4%) than in September (-4.1%). Excluding gasoline, the CPI rose 2.6% in October, matching the September increase. This was not enough of a decline to move the Bank of Canada off the sidelines, particularly given the recent strength in manufacturing sales, which surged 3.3% in September (estimated at 2.7%). Wholesale trade also surprised to the upside, 0.6% (estimated at 0.0%).

Slower growth in grocery prices further contributed to the CPI’s deceleration in October, which was moderated by surging cellular phone plan prices. Though grocery prices decelerated in October, prices remained elevated and have exceeded overall inflation for nine consecutive months.

Consumers paid more year over year in October for homeowners’ and mortgage insurance (+6.8%) and passenger vehicle insurance premiums (+7.3%). Among the provinces, prices rose the most in Alberta for both measures, with a 13.7% increase in homeowners’ home and mortgage insurance and a 17.8% increase in passenger vehicle insurance premiums.

Since October 2020, homeowners’ insurance and mortgage insurance prices have risen 38.9% nationally, while passenger vehicle insurance prices have risen 18.9%.

The index for property taxes and other special charges, priced annually in October, rose 5.6% year over year, down from 6.0% in 2024.

The CPI rose 0.2% month over month in October. On a seasonally adjusted monthly basis, the CPI was up 0.1%.

In October, both the CPI median and the CPI trimmed mean came in cooler than economists had expected. The average of these metrics was 2.95% in October.

The old measure of core—prices excluding food and energy—rose 0.3% m/m on an adjusted basis, boosting the yearly rate three full ticks to 2.7% y/y. A pop in cellular services was a significant driver there; in fact, the 7.9% y/y rise in all telephone services was the largest yearly increase since 1982. Still, a pullback in grocery prices, perhaps in part due to the rollback of retaliatory tariffs, helped moderate the Bank of Canada’s core measures. Median prices edged up just 0.1% m/m (s.a.), trimming the annual rate to 2.9%, while trim eased a tick to 3.0% y/y.

Rent perked up again to 5.2% y/y (from 4.8%), and remains the single most significant driver of inflation due to its heavy weight in the index.

Bottom Line

This report does little to change the BoC’s view that underlying inflation remains close to 2-1/2%; but, if anything, most underlying metrics have been stuck a bit above that, or have just crept up there. In other words, this report is just another reason to believe the Bank is moving to the sidelines in December.

Dr. Sherry Cooper

The post Canadian headline inflation slowed to 2.2% y/y in October, down from 2.4% in September. appeared first on Morning Lee - Mortgage | Realty | Business.

But why is that the case? Let’s break it down.

Why Two to Three Credit Cards?

The number of credit cards you have plays a role in your credit score, but it’s not just about quantity. It’s about how well you manage your credit. Typically, having two or three credit cards can help improve your credit mix — a key factor that influences your credit score. When you manage these accounts responsibly, it signals to lenders that you understand how to handle borrowing effectively.

Moreover, the right mix of credit types — including credit cards, loans, and a mortgage — is what most lenders prefer to see. It shows that you can manage different kinds of debt, which is vital when applying for significant loans or mortgages.

How Do Multiple Credit Cards Affect Your Credit Score?

Multiple credit cards can actually help boost your credit score, primarily by lowering your credit utilization ratio. This ratio is the amount of credit you’re using compared to your total available credit. For example, if your total credit limit is $10,000 and you have $2,000 in debt, your credit utilization rate is 20%.

Most experts suggest keeping your utilization below 30%. If you’re above that threshold, it can harm your credit score. By opening a new credit card, you increase your total available credit, which lowers your utilization rate — potentially improving your score.

However, the key here is how well you manage your spending. Ensure that you’re making timely payments and not just paying the minimum balance. This will help you avoid late fees, high-interest rates, and debt accumulation.

The Risks of Having Too Many Cards

While having multiple credit cards can be beneficial, there are risks. It’s easy to fall into the trap of overspending. With each additional card comes a new set of due dates, interest rates, and fees, which can quickly become difficult to manage. This could lead to missed payments and a high credit utilization rate, both of which can negatively impact your credit score.

If you’re considering opening a new card, be sure that you can handle the extra responsibility. Keep track of your spending patterns, set up reminders for payments, and make sure you can meet the monthly obligations without going over your budget.

How Often Should You Apply for a Credit Card?

Applying for too many credit cards in a short period can hurt your credit score. When you apply for a new credit card, the lender performs a hard inquiry on your credit report. Too many hard inquiries within a short time frame can suggest to lenders that you’re overextending yourself and taking on too much debt, which could lower your credit score.

Therefore, only apply for a new credit card when it fits into your overall financial plan and you’re confident that it will be manageable.

When Is It Too Much?

While having two or three credit cards is typically recommended, some people might handle more without issue, especially if they have a clear strategy in place. However, for many people, more than three credit cards can become overwhelming and harder to manage.

The most important thing to remember is not how many cards you have, but how responsibly you use them.

Key Tips for Managing Multiple Credit Cards

• Monitor Your Balances: Keep track of how much you owe on each card. This will help you avoid missing payments or exceeding your credit limit.
• Pay On Time: Late payments can result in fees and damage your credit score. Set up automatic payments or reminders to make sure you’re never late.
• Pay in Full When Possible: Paying off your balance in full each month is the best way to avoid paying interest and to maintain a good credit score.
• Check Your Credit Report Regularly: Understand what lenders see when they pull your credit report. This gives you a better idea of how to improve your score.

What About Your Mortgage?

Managing your credit cards wisely is important, especially when you’re planning for larger financial goals like buying a home. Whether you’re a first-time buyer or looking to refinance, understanding your credit score is essential. The right financial tools can make all the difference in securing a mortgage that works for you.

For those of us facing rising living costs or looking for ways to maximize our home equity, reverse mortgages can offer financial relief. If you’re 55 or older, this may be an option worth exploring. A reverse mortgage can provide the financial cushion you need, allowing you to stay in your home while tapping into its equity.

Want to know more?
Reverse mortgages: 55+? A cushion against the rising cost of living

When it comes to managing your finances, it’s important to stay on top of your credit card usage. If you’re ready to take the next step in your financial journey, remember that MorningLee.ca is here to help with a range of mortgage and loan services designed to fit your needs.

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