Mortgage & Wealth Strategies

Say Hello To The Easiest Way To Mortgage

Mortgage and Wealth strategies

Beyond The Rate

As expert mortgage brokers, we know building wealth through homeownership and achieving financial freedom is about more than just chasing the lowest rate—it’s about strategy.

We're taking you behind the scenes and giving you the insider tools and powerful strategies to get ahead. If you’re a first-time homebuyer, you’ll find everything you need to secure your first property and start building wealth from day one.

If you’re an existing homeowner, this is where you take control. Maximize the wealth-building potential of your current home with proven strategies for refinancing, leveraging equity, and optimizing your mortgage for bigger opportunities.

Your mortgage is more than a loan—it’s a gateway to long-term financial success.

Our goal is simple: to equip you with the knowledge and tools to make smart, strategic decisions that will transform your financial future.

Let’s get started.

The Rate Ride Strategy: An Exclusive Mortgage Move That Could Save You Thousands in Interest

November 22, 2024 | Posted by: Matt Broom-Hall

The Exclusive Mortgage Move That Could Save You Thousands in Interest

When it comes to choosing a mortgage, it’s easy to get caught up in the numbers. But there’s a lesser-known strategy that can offer serious long-term savings—and it goes beyond simply locking in a low rate. This exclusive approach has helped many homeowners save thousands in interest, giving them a major advantage over traditional fixed-rate options. If you’re looking to maximize your mortgage savings, this could be the game-changer you’ve been waiting for.

The Rate Ride Strategy: A Smart Approach to Rate Cycles

As the Bank of Canada (BOC) continues a rate-cutting cycle, homeowners have a unique opportunity to leverage falling rates with the Rate Ride Strategy. Here’s how it works and why it's the smarter choice in today’s environment.

How the Rate Ride Strategy Works: A Step-by-Step Breakdown

1. Start with a Variable Rate Mortgage

With the BOC actively cutting rates, a variable rate mortgage allows homeowners to immediately benefit from lower payments. Starting with a variable rate gives flexibility and lower payments as the BOC cuts rates over the next 18 to 24 months.

2. Ride the Rate Down

As rates continue to drop over the next year and a half, homeowners see their monthly payments decrease with each BOC rate cut. Analysts forecast a total reduction of 1.75%, which would bring the variable rate from 5.00% to approximately 3.25%.

This drop not only provides lower monthly payments but also results in significant interest savings.

3. Switch to Fixed When Rates Bottom Out

Once the rate-cutting cycle ends, homeowners have two options:

  • Switch to a Fixed Rate with Their Current Lender: Lock in a competitive fixed rate for the remaining term of their mortgage.

  • Move to a New Lender and Reset the Term: Secure a new 5-year fixed rate with a new lender, allowing for extended stability at the best rate.

I use my RateWatch+ system to monitor market conditions. When rates hit their lowest point, I proactively reach out to clients with the best fixed-rate options to lock in long-term savings.

Tangible Savings: Real Numbers Behind the Strategy

Let’s look at an example to show the potential savings with the Rate Ride Strategy compared to locking into a fixed rate today.

Scenario 1: Variable for 18 Months, Then Switch To Fixed With Current Lender

  1. Starting Variable Rate: 5.00% (Prime - 0.95%)

  2. Monthly Payment on a $500,000 Mortgage (Amortized over 25 years):

    • Monthly Payment at 5.00%: $2,908

First 6 Months at 5.00%:

  • Interest Paid Over First 6 Months: Approximately $12,220

Next 12-24 Months at Reduced Rate (3.25% after BOC Cuts):

  • New Monthly Payment at 3.25%: $2,419

  • Interest Paid Over Next 12 Months: Approximately $16,800

Years 2.5-5: Locking in a Fixed Rate

After the 18-24 month rate-cutting period, the client switches to a fixed rate of 3.25% for the remaining 3.5 years.

  • Monthly Payment at 3.25% Fixed: $2,419

  • Interest Paid During Fixed Rate Period (3.5 Years): Approximately $58,800

Total Interest Paid Over 5 Years with Rate Ride Strategy:

  • $87,820

Compare To Locking into a Fixed Rate Now

For comparison, let’s see the outcome if the homeowner locks into a 5-year fixed rate at the current average of 4.44%.

  • Fixed Rate Monthly Payment at 4.44% (Over 5 Years): $2,748

  • Total Interest Paid Over 5 Years: Approximately $111,450

Savings Comparison

By choosing the Rate Ride Strategy, the client would save a substantial amount over five years compared to locking into a fixed rate from the start:

  • Total Savings with the Rate Ride Strategy: $111,450 - $87,820 = $23,630

Scenario 2: Switching to a New 5-Year Fixed Rate After 18 Months vs. Taking a 5-Year Fixed Now and Renewing Later

In addition to switching to a fixed rate with the current lender at the end of the rate-cutting cycle, clients also have the option to switch to a new 5-year fixed rate with a different lender at that time, locking in stability for an additional 5 years.

Let’s compare this scenario with someone who locks into a fixed rate now, at 4.44%, and then renews in 5 years, potentially at a higher rate if the BOC starts increasing rates again.

Key Assumptions for Comparison:

  • Current Approx. Fixed Rate (5-Year): 4.44%

  • Initial Variable Rate (Prime - 0.95%): 5.00%

  • Rate-Cutting Cycle Approx. Duration: 18 months

  • Forecasted Rate Cut: 1.75%, lowering the variable rate to approximately 3.25% after 18 months

  • New Fixed Rate After Rate-Cutting Cycle: Expected to be around 3.25%

  • Renewal Rate in 5 Years: Expected increase, estimated around 5.00% (if BOC raises rates again)

The Numbers – Switch to a New 5-Year Fixed at 3.25% After 18 Months

First 18 Months with Variable Rate (5.00% to 3.25%):

  • Monthly Payment at 5.00% (First 6 Months): $2,908

  • Interest Paid in First 6 Months: Approximately $12,220

  • Monthly Payment at 3.25% (Next 12 Months): $2,419

  • Interest Paid in Next 12 Months: Approximately $16,800

Switch to New 5-Year Fixed Rate at 3.25% After 18 Months:

  • New Fixed Rate Monthly Payment (at 3.25%): $2,419

  • Interest Paid Over Next 5 Years (3.5 years remaining in initial term + 5 additional years): Approximately $117,000

Total Interest Paid Over 6.5 Years (Rate Ride Strategy):
$12,220 (first 6 months) + $16,800 (next 12 months) + $117,000 = $146,020

The Numbers - Locking into a 5-Year Fixed Rate Now and Renewing in 5 Years at a Higher Rate

Initial 5-Year Fixed Rate (4.44%):

  • Monthly Payment at 4.44% Fixed Rate: $2,748

  • Total Interest Paid Over 5 Years: Approximately $111,450

Renewing at 5.00% for Next 5-Year Term:

  • New Monthly Payment at 5.00%: $2,908

  • Total Interest Paid Over Next 5 Years: Approximately $134,000

Total Interest Paid Over 10 Years (5-Year Fixed + Renewal):
$111,450 + $134,000 = $245,450

Savings Comparison

By following the Rate Ride Strategy and switching to a new 5-year fixed rate at the end of the rate-cutting cycle, the client achieves substantial savings compared to locking into a 5-year fixed rate now and renewing at a potentially higher rate in 5 years.

  • Total Interest with Rate Ride Strategy (Switching to New 5-Year Fixed): $146,020

  • Total Interest with 5-Year Fixed Now + Renewal: $245,450

Potential Savings with Rate Ride Strategy:
$245,450 - $146,020 = $99,430

Why the Rate Ride Strategy is the Smarter Choice

The Rate Ride Strategy allows you to take advantage of a dynamic rate environment, benefiting from every BOC rate cut while also providing the flexibility to lock in a fixed rate at the right time. With my RateWatch+ system, you’re never left in the dark. I continuously monitor the market and proactively reach out when it’s financially beneficial for you to switch, maximizing your savings at each stage.

This approach ensures that you’re not locked into a single rate strategy but are instead positioned to capitalize on every opportunity in the rate cycle. By working with a top-rated mortgage broker, you’re choosing a mortgage journey that’s both dynamic and strategic—delivering more savings and less stress.

Why This Exclusive Strategy Works

What goes up must come down—and then go up again. When the BOC last entered a rate-cutting cycle, homeowners with adjustable-rate mortgages benefited from lowered monthly payments and substantial interest savings. However, as rates eventually rose, many homeowners with variable mortgages were caught off guard, realizing too late that their banks weren’t going to advise them on when to switch to fixed or how to manage their rate effectively.

I’ve invested in sophisticated monitoring systems, ensuring that each client’s mortgage is optimized in real-time. My RateWatch+ service provides continuous visibility, allowing me to reach out proactively and recommend the best time to switch to a fixed rate or adjust your strategy. Unlike banks or brokers who simply close the loan and move on, I stay with you throughout the journey, maximizing your savings and providing unmatched support.

This exclusive strategy ensures you’re positioned to save the most, without being left to navigate rate fluctuations alone. Instead, you have a dedicated partner actively managing your mortgage to build your wealth and financial success.

Back to Main Blog Page