July 31, 2025 • 7 mins
In this episode, the conversation begins with a welcome and an economic news summary, followed by a sponsor message from Real Approved Inc. The discussion then shifts to the recent decline in Canada's GDP, with an analysis of affected sectors. The episode explores the country's economic resilience and provides a GDP forecast. Speculation around a potential rate cut by the Bank of Canada is examined. The conversation then turns to understanding mortgage penalties, featuring insights on a prepayment penalty mentor tool and advice for brokers. The episode concludes with closing remarks and a sponsor reminder from Real Approved Inc.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to the Ontario Mortgage & Real EstateInsights Podcast, your go-to source for the
(00:05):
latest developments, trends, and regulatorychanges in the industry.
I'm your host, Steve Hamoen, here to provideyou with insights sourced from reputable news
outlets to help you stay informed and makewell-informed decisions.
This podcast is brought to you by Real ApprovedInc., a trusted mortgage brokerage dedicated to
(00:26):
helping Canadians achieve their homeownershipdreams.
Visit realapproved.ca to learn more about howour experienced team can assist you with your
mortgage needs.
Let's dive into today's episode.
Today, we're diving into some recent economicnews.
Canada's real gross domestic product, or GDP,edged down 0.1% in May, marking the second
(00:50):
straight month of decline.
This isn't entirely unexpected, as economistshad predicted a slight downturn.
Yes, Steve, and it's interesting to note thattwelve out of twenty industries saw declines,
while seven managed to grow.
The goods-producing industries contracted, butservices were largely stable.
(01:11):
It's a mixed bag of results.
Exactly, Janine.
Retail trade was hit the hardest with a 1.2%drop.
Mining, quarrying, and oil and gas extractionalso saw notable declines.
But there was a silver lining withmanufacturing output rising 0.7%, mainly due to
inventory accumulation.
(01:31):
However, Oxford Economics cautions that thismay be just a temporary bounce.
And despite these challenges, some sectors likereal estate and rental leasing, and
transportation and warehousing, showed modestgains.
Real estate grew by 0.3%, which is certainly apositive sign for our industry.
(01:51):
Absolutely.
It's worth noting that economists are seeingbroad softness in Canada's economy.
But as BMO's Douglas Porter points out, theCanadian economy has handled the period of
trade uncertainty better than expected.
That's a relief, Steve.
And CIBC’s Andrew Grantham also highlightedthat while the economy was stable in the second
(02:13):
quarter, there might be a modest contraction inupcoming data.
It's something we'll have to keep an eye on.
Looking ahead to June, Statistics Canada'sflash estimate suggests a modest 0.1% GDP gain.
However, the Bank of Canada had forecasted a1.5% contraction for the second quarter,
attributing this to weaker U.S.
(02:35):
demand and earlier export shifts.
Right, and it's important to understand thatthese estimates differ because they rely on
different data sources.
StatCan focuses on industry output, while theBank of Canada looks at spending data.
This discrepancy can lead to differingforecasts.
(02:56):
That's correct, Janine.
And as TD’s Marc Ercolao notes, while the Bankof Canada has held its policy rate steady at
2.75%, there's potential for rate cuts laterthis year if excess supply continues and
inflation remains contained.
It's a delicate balance, Steve.
As we move forward, the economic outlookremains uncertain, especially with ongoing
(03:20):
trade negotiations between Canada and theUnited States.
We'll just have to stay tuned for developments.
Now, let's shift gears and dive into a topicthat can often catch borrowers off
guard—mortgage penalties.
These penalties can be quite the surprise formany, but for brokers who understand them well,
they present an opportunity to save clientssignificant amounts of money.
(03:43):
Janine, what are your thoughts on this?
Steve, it's crucial for us as brokers to notonly prepare our clients for potential fees but
also to use our knowledge strategically.
Matt Imhoff, the founder of Prepayment PenaltyMentor, recently emphasized this in a Mortgage
Professionals Canada webinar.
He explained how understanding prepaymentpenalties can be a strategic edge for brokers.
(04:07):
It's not just about the penalties themselves,but about the timing and how they evolve over
time.
Exactly, Janine.
Matt Imhoff highlighted that penalties on afixed mortgage are usually the greater of three
months' interest or the interest ratedifferential.
This differential reflects the amount thelender claims to lose in interest if the
borrower ends their term early.
(04:29):
Interestingly, how this is calculated can varysignificantly.
Some lenders use real market rates, whileothers use artificially low reinvestment rates,
which can inflate the penalty.
And it's this variability that makes timing socrucial.
As a mortgage progresses, lenders adjust theircomparison rates based on the remaining term.
(04:51):
These are known as "transition points," andthey can cause penalties to jump or drop
unexpectedly.
Matt Imhoff shared examples where waiting justa few weeks, or acting a month sooner,
dramatically changed the penalty amount forclients.
That's right, Janine.
One example from the webinar showed a penaltyjumping by five thousand dollars simply because
(05:13):
the lender switched to a two-year comparisonrate.
Brokers who can anticipate these shifts canbetter guide their clients on when to move and
when to hold, ultimately saving them money andbuilding long-term trust.
Absolutely, Steve.
And one of the tools that can help with this isPrepayment Penalty Mentor, co-founded by
Imhoff.
(05:33):
It models penalties across more than fiftylenders and helps identify timing windows and
savings opportunities before renewaldiscussions start.
For Mortgage Professionals Canada members, thistool is available at a discounted rate, making
it an accessible resource for brokers.
It's a game-changer for sure, Janine.
(05:54):
In the end, understanding these prepaymentpenalties and how they change over time
empowers brokers to deliver advice that notonly saves clients money but also strengthens
relationships through trust and transparency.
It's about managing expectations and ensuringclients are not blindsided by unexpected costs.
Well said, Steve.
(06:15):
It's about more than just saving money; it'sabout being there for our clients and guiding
them through the complexities of their mortgagejourney.
With the right tools and insights, we can helpthem achieve their homeownership dreams without
unnecessary financial surprises.
Thanks for tuning in to another episode of theOntario Mortgage & Real Estate Insights
(06:37):
Podcast.
We hope you found today's insights valuable asyou navigate the world of mortgages and real
estate.
Before you go, a quick reminder (06:44):
Real Approved is here to make your mortgage journey smoother.
Whether you're buying your first home orrefinancing, their experienced team is ready to
guide you with personalized support every stepof the way.
Visit realapproved.ca to get started and takethe next step toward achieving your
homeownership goals.
(07:06):
Catch you next time, and stay informed with thelatest industry insights!
Welcome to the Ontario Mortgage & Real EstateInsights Podcast, your go-to source for the
(00:05):
latest developments, trends, and regulatorychanges in the industry.
I'm your host, Steve Hamoen, here to provideyou with insights sourced from reputable news
outlets to help you stay informed and makewell-informed decisions.
This podcast is brought to you by Real ApprovedInc., a trusted mortgage brokerage dedicated to
(00:26):
helping Canadians achieve their homeownershipdreams.
Visit realapproved.ca to learn more about howour experienced team can assist you with your
mortgage needs.
Let's dive into today's episode.
Today, we're diving into some recent economicnews.
Canada's real gross domestic product, or GDP,edged down 0.1% in May, marking the second
(00:50):
straight month of decline.
This isn't entirely unexpected, as economistshad predicted a slight downturn.
Yes, Steve, and it's interesting to note thattwelve out of twenty industries saw declines,
while seven managed to grow.
The goods-producing industries contracted, butservices were largely stable.
(01:11):
It's a mixed bag of results.
Exactly, Janine.
Retail trade was hit the hardest with a 1.2%drop.
Mining, quarrying, and oil and gas extractionalso saw notable declines.
But there was a silver lining withmanufacturing output rising 0.7%, mainly due to
inventory accumulation.
(01:31):
However, Oxford Economics cautions that thismay be just a temporary bounce.
And despite these challenges, some sectors likereal estate and rental leasing, and
transportation and warehousing, showed modestgains.
Real estate grew by 0.3%, which is certainly apositive sign for our industry.
(01:51):
Absolutely.
It's worth noting that economists are seeingbroad softness in Canada's economy.
But as BMO's Douglas Porter points out, theCanadian economy has handled the period of
trade uncertainty better than expected.
That's a relief, Steve.
And CIBC’s Andrew Grantham also highlightedthat while the economy was stable in the second
(02:13):
quarter, there might be a modest contraction inupcoming data.
It's something we'll have to keep an eye on.
Looking ahead to June, Statistics Canada'sflash estimate suggests a modest 0.1% GDP gain.
However, the Bank of Canada had forecasted a1.5% contraction for the second quarter,
attributing this to weaker U.S.
(02:35):
demand and earlier export shifts.
Right, and it's important to understand thatthese estimates differ because they rely on
different data sources.
StatCan focuses on industry output, while theBank of Canada looks at spending data.
This discrepancy can lead to differingforecasts.
(02:56):
That's correct, Janine.
And as TD’s Marc Ercolao notes, while the Bankof Canada has held its policy rate steady at
2.75%, there's potential for rate cuts laterthis year if excess supply continues and
inflation remains contained.
It's a delicate balance, Steve.
As we move forward, the economic outlookremains uncertain, especially with ongoing
(03:20):
trade negotiations between Canada and theUnited States.
We'll just have to stay tuned for developments.
Now, let's shift gears and dive into a topicthat can often catch borrowers off
guard—mortgage penalties.
These penalties can be quite the surprise formany, but for brokers who understand them well,
they present an opportunity to save clientssignificant amounts of money.
(03:43):
Janine, what are your thoughts on this?
Steve, it's crucial for us as brokers to notonly prepare our clients for potential fees but
also to use our knowledge strategically.
Matt Imhoff, the founder of Prepayment PenaltyMentor, recently emphasized this in a Mortgage
Professionals Canada webinar.
He explained how understanding prepaymentpenalties can be a strategic edge for brokers.
(04:07):
It's not just about the penalties themselves,but about the timing and how they evolve over
time.
Exactly, Janine.
Matt Imhoff highlighted that penalties on afixed mortgage are usually the greater of three
months' interest or the interest ratedifferential.
This differential reflects the amount thelender claims to lose in interest if the
borrower ends their term early.
(04:29):
Interestingly, how this is calculated can varysignificantly.
Some lenders use real market rates, whileothers use artificially low reinvestment rates,
which can inflate the penalty.
And it's this variability that makes timing socrucial.
As a mortgage progresses, lenders adjust theircomparison rates based on the remaining term.
(04:51):
These are known as "transition points," andthey can cause penalties to jump or drop
unexpectedly.
Matt Imhoff shared examples where waiting justa few weeks, or acting a month sooner,
dramatically changed the penalty amount forclients.
That's right, Janine.
One example from the webinar showed a penaltyjumping by five thousand dollars simply because
(05:13):
the lender switched to a two-year comparisonrate.
Brokers who can anticipate these shifts canbetter guide their clients on when to move and
when to hold, ultimately saving them money andbuilding long-term trust.
Absolutely, Steve.
And one of the tools that can help with this isPrepayment Penalty Mentor, co-founded by
Imhoff.
(05:33):
It models penalties across more than fiftylenders and helps identify timing windows and
savings opportunities before renewaldiscussions start.
For Mortgage Professionals Canada members, thistool is available at a discounted rate, making
it an accessible resource for brokers.
It's a game-changer for sure, Janine.
(05:54):
In the end, understanding these prepaymentpenalties and how they change over time
empowers brokers to deliver advice that notonly saves clients money but also strengthens
relationships through trust and transparency.
It's about managing expectations and ensuringclients are not blindsided by unexpected costs.
Well said, Steve.
(06:15):
It's about more than just saving money; it'sabout being there for our clients and guiding
them through the complexities of their mortgagejourney.
With the right tools and insights, we can helpthem achieve their homeownership dreams without
unnecessary financial surprises.
Thanks for tuning in to another episode of theOntario Mortgage & Real Estate Insights
(06:37):
Podcast.
We hope you found today's insights valuable asyou navigate the world of mortgages and real
estate.
Before you go, a quick reminder (06:44):
Real Approved is here to make your mortgage journey smoother.
Whether you're buying your first home orrefinancing, their experienced team is ready to
guide you with personalized support every stepof the way.
Visit realapproved.ca to get started and takethe next step toward achieving your
homeownership goals.
(07:06):
Catch you next time, and stay informed with thelatest industry insights!
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