Creating a legacy is about more than just leaving behind financial assets—it’s about enriching the lives of your loved ones and making a meaningful impact on your community. For Canadian homeowners, the CHIP Reverse Mortgage offers a unique way to create a “living legacy” by accessing the equity in your home and supporting your family, community, and charitable causes.

If you’re searching for flexible mortgage solutions that allow you to make a difference now, here’s how the CHIP Reverse Mortgage can help you build a living legacy.

Support the Next Generation with a Down Payment

Rising home prices have made it challenging for many young Canadians to enter the housing market. As a homeowner, you can help by providing financial support through the “Bank of Mom and Dad.” By using a portion of your home’s equity with the CHIP Reverse Mortgage, you can assist your children or grandchildren with a down payment on their first home. This not only helps them achieve homeownership but allows you to witness the security and joy that owning a home can bring to their lives.

Create Educational Funds for Your Grandchildren

Investing in education is one of the most impactful ways to ensure a bright future for the next generation. With the CHIP Reverse Mortgage, you can create educational funds for your grandchildren, giving them the financial resources to pursue higher education and career goals. The satisfaction of watching them thrive in their personal and professional journeys becomes part of your lasting legacy.

Contribute to a Wedding

Weddings are a special milestone, but they can also be a significant financial burden. If your loved ones are planning a wedding, using your home’s equity can ease that burden. With the CHIP Reverse Mortgage, you can contribute to their big day, making it a beautiful and memorable occasion while keeping your own financial security intact.

Give Back with Charitable Donations

Leaving a legacy through charitable giving is a wonderful way to make a lasting impact on your community. Whether you want to donate to causes that are close to your heart or support local initiatives, the CHIP Reverse Mortgage gives you the financial flexibility to make significant contributions while benefiting from potential tax advantages. Your generosity not only benefits others but strengthens your connection to your community.

Build Family Traditions and Memories

Creating a living legacy isn’t just about finances—it’s also about making lasting memories with your family. Whether it’s planning special family vacations, building traditions, or simply spending more quality time with your loved ones, these moments become cherished parts of your legacy. The CHIP Reverse Mortgage can give you the financial freedom to focus on what matters most—building unforgettable experiences with your family.

How the CHIP Reverse Mortgage Helps You Create a Legacy

The CHIP Reverse Mortgage is designed for Canadian homeowners aged 55 and older, allowing you to access up to 55% of your home’s equity without requiring monthly mortgage payments. You can stay in the home you love while using the funds to support your living legacy goals, whether that’s helping your children buy their first home, setting up educational funds, or giving back to your community.

With the CHIP Reverse Mortgage, you have the financial flexibility to create a legacy of love, support, and impact. You can enrich the lives of your loved ones today while maintaining your financial independence for years to come.

Ready to Build Your Legacy?

If you want to learn more about how the CHIP Reverse Mortgage can help you achieve your financial and legacy goals, reach out to me today. Let’s discuss how this innovative solution can help you make a lasting difference for your family and community.

Bank of Canada Cuts Rates Another Quarter Point

Today, the Bank of Canada cut the overnight policy rate by another 25 basis points to 4.25%. This is the third consecutive decrease since June. The Bank’s decision reflects two main developments. First, headline and core inflation have continued to ease as expected. Second, as inflation gets closer to the target, the central bank wants to see economic growth pick up to absorb the slack in the economy so inflation returns sustainably to the 2% target.

Overall, the economy’s weakness continues to pull inflation down. However, price pressures in shelter and some other services are holding inflation up. Since the July Monetary Policy Report, the upward forces from prices for shelter and some other services have eased slightly. At the same time, the downward pressure from excess supply in the economy remains.

Tiff Macklem said today, “If inflation continues to ease broadly in line with the central bank’s July forecast, it is reasonable to expect further cuts in the policy rate. We will continue to assess the opposing forces on inflation and take our monetary policy decisions one at a time.”

The economy grew by 2.1% in the second quarter, led by government spending and business investment. This was slightly stronger than forecast in July. Together with the first quarter’s growth of 1.8%, the economy grew by about 2% over the first half of 2024. That’s a healthy rebound from our near-zero growth in the second half of 2023. The Bank’s July projection has growth strengthening further in the second half of this year. Recent indicators suggest there is some downside risk to this pickup. In particular, preliminary indicators suggest that economic activity was soft through June and July, and employment growth has stalled in recent months.

That makes this Friday’s Labour Force Survey data for August particularly important. We expect economic activity to slow in the third quarter to rough 1.3%, keeping the Bank in an easing posture through next year.

The unemployment rate has risen over the last year to 6.4% in June and July. The rise is concentrated in youth and newcomers to Canada, who find it more challenging to get a job. Business layoffs remain moderate, but hiring has been weak. The slack in the labour market is expected to slow wage growth, which remains elevated relative to productivity.

Turning to price pressures, CPI inflation eased further to 2.5% in July, and the central bank’s preferred measures of core inflation also moved lower. With the share of CPI components growing above 3% around its historical norm, there is little evidence of broad-based price pressures. But shelter price inflation is still too high. Despite some early signs of easing, it remains the most significant contributor to overall inflation. Inflation remains elevated in some other services but has declined sharply in manufacturing and goods prices.

As outlined in the Bank of Canada’s Monetary Policy Report, inflation is expected to ease further in the months ahead. It may bump up later in the year as base-year effects unwind, and there is a risk that the upward forces on inflation could be more potent than expected. At the same time, with inflation getting closer to the target, the central bank must increasingly guard against the risk that the economy is too weak and inflation falls too much. Judging from comments made at today’s press conference, the BoC is at least as concerned about too much disinflation–taking the economy into a deflationary spiral.

Macklem said, “We are determined to bring inflation down to the 2% target and keep it there. We care as much about inflation being below the target as we do about it being above it. The economy functions well when inflation is around 2%.” With continued easing in broad inflationary pressures, the Governing Council reduced the policy interest rate by 25 basis points. Excess supply in the economy continues to put downward pressure on inflation, while price increases in shelter and some other services are holding inflation up. The Governing Council is carefully assessing these opposing forces on inflation. “Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook. The Bank remains resolute in its commitment to restoring price stability for Canadians”.

Bottom Line

Monetary policy remains restrictive, as the chart above shows. While the target overnight rate is now 4.25%, core inflation is only roughly 2.4%. Real interest rates remain too high for the economy to reach its potential growth pace of about 2.5%. Weaker growth implies a continued rise in unemployment and excess supply in other sectors.

In separate news, the US released data showing that US job openings fell to their lowest level since January 2021, consistent with other signs of slowing demand for workers.

US job growth has been slowing, unemployment is rising, and job seekers are having greater difficulty finding work, fueling fears about a potential recession. Federal Reserve policymakers have made it clear they don’t want to see further cooling in the labour market and are widely expected to start lowering interest rates at their next meeting in two weeks.

In other news, consistent with a global economic slowdown, oil prices have plunged to new 2024 lows. Weak oil prices are a harbinger of lower inflation, growth and mortgage rates.

Bonds rallied in the wake of the disappointing US data, taking the 5-year government of Canada bond yield down to a mere 2.89%, well below the 3.4% level posted when the Bank of Canada began cutting interest rates in June. This decline in market-driven interest rates reduces fixed-rate mortgage yields. Moreover, today’s cut in the overnight rate will be followed soon by a 25 basis point reduction in the prime rate to 6.45%, reducing floating rate mortgage yields as well.

The Bank of Canada has two more decision dates this year: October 23 and December 11. At those meetings, the Bank is widely expected to continue its quarter-point rate cuts, taking the overnight rate down to 4.0% at yearend and 2.75% next year.