Embarking on the journey to purchase your first home is one of life’s most thrilling and rewarding milestones!

To ensure a smoother mortgage process, one of the smartest steps you can take is to get pre-approved for your mortgage. While pre-approval doesn’t lock you into a single lender, it does secure the interest rate offered to you for 90 to 120 days, providing a critical buffer if rates rise while you’re still house hunting.

### Why Rate Holds Matter in Mortgages

**Protection Against Rate Increases:** A rate hold guarantees that you will receive a specified interest rate for a set period, typically up to 120 days. This means you’re protected from potential rate hikes during that time. Plus, if rates drop, you can still take advantage of the lower rate!

**Financial Planning:** Knowing your exact interest rate allows for better financial planning and budgeting. You’ll have clarity on your expected monthly mortgage payments, making it easier to target the right price range for your new home and ensuring future financial stability.

**Time for Decision Making:** With a rate hold, you gain peace of mind and the necessary time to shop around for the right home. It allows you to compare different mortgage options without the pressure of rising interest rates. This is especially valuable when you’re considering various lenders or mortgage products.

**Stress Reduction:** Rate holds reduce the stress associated with rate fluctuations and uncertainties in the housing market. After the past few years of market volatility, having a secured mortgage rate can ease the pressure of finding a new home quickly. And if your rate hold expires, you can easily apply for a new one!

**Securing a Competitive Rate:** Even though interest rates are not expected to rise dramatically in the near future, locking in a rate while you shop can save you money in the long term. This ensures you have a favorable interest rate if the market unexpectedly shifts.

### Make the Most of Your Home Purchase with a Rate Hold

Overall, rate holds offer peace of mind, financial security, and the opportunity to make informed decisions when entering into a mortgage agreement. They are particularly valuable in fluctuating interest rate environments or when you anticipate delays in finalizing your mortgage transaction.

Are you planning to purchase a home soon? Want more information on how rate holds can benefit you? Reach out to me today!

Secure your future home with confidence by taking advantage of a rate hold and ensuring your path to homeownership is as smooth and stress-free as possible.

Danny Benjamin

T: 289-455-8801

E: dannybenjamin@dominionlending.ca

Weaker-Than-Expected July Jobs Report Keeps BoC Rate Cuts In-Play

Canadian employment data, released today by Statistics Canada, showed a continued slowdown, which historically would have been a harbinger of recession. This cycle, immigration has augmented the growth of the labour force and consumer spending, forestalling a significant economic downturn.

Employment declined again in July, down 2.8K. The employment rate—the proportion of the population aged 15 and older who are working—fell 0.2 percentage points to 60.9% in July. The employment rate has followed a downward trend since reaching a high of 62.4% in January and February 2023 and has fallen in nine of the last ten months.

In July 2024, an increase in full-time work (+62,000; +0.4%) was offset by a decline in part-time work (-64,000; -1.7%). Despite these changes, part-time employment (+3.4%; +122,000) has grown faster than full-time employment (+1.4%; +224,000) on a year-over-year basis.

Public sector employment rose by 41,000 (+0.9%) in July and was up by 205,000 (+4.8%) compared with 12 months earlier. Public sector employment gains over the last year have been led by increases in health care and social assistance (+87,000; +6.9%), public administration (+57,000; +4.8%) and educational services (+33,000; +3.3%) (not seasonally adjusted).

Self-employment changed little in July and was up by 55,000 (+2.1%) year-over-year.

The unemployment rate was unchanged at 6.4% in July, following two consecutive monthly increases in May (+0.1 percentage points) and June (+0.2 percentage points). On a year-over-year basis, the unemployment rate was up by 0.9 percentage points in July.

The jobless rate rose more for recent immigrants, especially youth than those born in Canada.

The unemployment rate for this group was 22.8% in July, up 8.6 percentage points from one year earlier. For recent immigrants in the core working age group, the unemployment rate rose by 2.0 percentage points to 10.4% over the same period. In comparison, the unemployment rate for people born in Canada was up 0.5 percentage points to 5.6% on a year-over-year basis in July, while the rate for more established immigrants (who had landed in Canada more than five years earlier) was up 1.2 percentage points to 6.3%.

In July, employment in wholesale and retail trade decreased by 44,000 (-1.5%), reflecting a continuing downward trend since August 2023. On a year-over-year basis, employment in the industry was down by 127,000 (-4.2%) in July 2024.

Employment in finance, insurance, real estate, rental, and leasing declined by 15,000 (-1.0%) in July, marking the first decline since November 2023. On a year-over-year basis, employment in this industry showed little change in July 2024.

Public administration saw a rise in employment by 20,000 (+1.6%) in July, following a decline in June (-8,800; -0.7%). Employment in transportation and warehousing also increased in July by 15,000 (+1.4%), partially offsetting declines in May (-21,000; -1.9%) and June (-12,000; -1.1%).

British Columbia experienced the highest job losses, while Ontario and Saskatchewan were the only provinces to add employment.

Adjusted to US standards, the unemployment rate in Canada for July was 5.4%, which was 1.1 percentage points higher than in the United States (4.3%). Compared with 12 months earlier, the unemployment rate increased by 0.8 percentage points in both Canada and the United States. The employment rate has decreased in both countries over the past 12 months, with a larger decline in Canada. From July 2023 to July 2024, the employment rate (adjusted to US concepts) fell by 1.0 percentage points to 61.5% in Canada, while it declined by 0.4 percentage points to 60.0% in the United States.  Compared with 12 months earlier, the unemployment rate increased by 0.8 percentage points in Canada and the United States.

Bottom Line

This is the only jobs report before the Bank of Canada meets again on September 4. Traders expect further rate cuts at the three remaining meetings this year.

Last week, weaker employment data in the US contributed to a selloff in global equities, as bonds rallied amid increased bets that the Federal Reserve will be forced to cut borrowing costs more deeply and quickly than previously expected.

The interconnectedness of the economies of the United States and Canada implies that any further weakening in the former is likely to permeate into the latter. This scenario affords Macklem the latitude to normalize borrowing costs without the concern of outpacing the Federal Reserve to a degree that could jeopardize the Canadian dollar.

Buying a home is an exciting milestone! To ensure a smooth process, it’s crucial to have a comprehensive budget that includes all potential expenses, not just the purchase price of the home. One key area to consider is closing costs, which can significantly impact your financial planning. Understanding these costs will help you stay within your budget and maintain financial stability.

Closing costs are one-time fees that come with the purchase of a home, separate from the mortgage insurance and down payment. These costs typically range from 1.5-4% of the purchase price, depending on your location. For example, for an $800,000 home, you should budget around $22,000 on average for closing costs.

Here are some common closing costs to consider:

**Land Transfer Tax:** Calculated as a percentage of the purchase price, this tax varies by province and, in some cases, by city. For example, Toronto has a municipal land transfer tax in addition to the provincial tax.

**Legal Fees and Disbursements:** Expect to pay at least $500 (plus GST/HST) for legal fees associated with the preparation and recording of official documents for your purchase.

**Title Insurance:** Required by most lenders to protect against losses from property ownership disputes, title insurance is typically purchased through your lawyer or notary and costs around $300 or more.

**PST on CMHC Insurance:** Although CMHC insurance is included in your mortgage, the PST on this insurance must be paid separately, usually through your lawyer and sometimes deducted from your advance.

**Home Inspection Fee:** A home inspection is highly recommended to avoid future surprises. This can cost around $500.

**Appraisal Fee:** An appraisal, which confirms the home’s resale value for the lender, typically costs between $400 and $600 and is often covered by the lender.

**Property Insurance:** Property insurance, which covers the replacement cost of your home and its contents, must be in place on closing day and is paid in monthly or annual premiums.

**Prepaid Utility Bills:** You may need to reimburse the previous owner for prepaid property taxes, utilities, and other costs.

**Property Taxes:** Calculated as a percentage of your home’s value and varying by municipality, property taxes are due annually. You might also need to reimburse the previous owner if they have already paid for the year.

Knowledge is power. Understanding these hidden costs will help you create a realistic budget and ensure you stay within your financial means. If you have any questions about your home purchase or need assistance, contact me at (289)455-8801. We’re here to help you navigate the process, whether you’re buying now or planning for the future!