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Mark your calendars as it’s that time of year again. March 1st is the RRSP deadline which means it’s time to start thinking about your retirement goals and how you can lower your taxes in 2022. Canadians are fortunate to have the option to invest in Registered Retirement Savings Plans (RRSPs). This is one of the key strategies for financial planning and it can help you reach your retirement goals faster. That’s why at First Avenue Financial, we want to make sure you’re taking full advantage of this opportunity.

An RRSP is a retirement savings account that allows Canadians to save money and defer paying income tax on their contributions until later. The funds placed into an RRSP account earn interest or dividends over time, allowing them to grow faster than they would if they were held outside of an RRSP account.

Investing in RRSPs is one of the most effective ways for Canadians to save for their retirement and reduce their tax burden at the same time. The amount invested can be deducted from taxable income, thus lowering your taxes owed. This means that saving money in an RRSP account can save you thousands of dollars in taxes each year. Additionally, since the interest or dividends earned within an RRSP are not taxed until withdrawn from the account, they have more potential to accumulate over time compared with other investments outside of an RRSP account.

At First Avenue Financial we understand how important it is for our clients to take full advantage of all available opportunities when it comesto planning for retirement while reducing their taxliability at the same time. That’s why we offer comprehensive services designed specifically with this goal in mind, helping Canadians create custom investment strategies tailored to their specific financial needs and goals. We also provide advice onproper asset allocation strategies so our clients know exactly where their money should be going and how much should be invested per asset class –ensuring maximum returns on their investments while minimizing risk exposure as much as possible.Finally, we will work with you every step of the way. From setting up your initial investments through ongoing monitoring and maintenance, ensuring that you always stay on track toward achieving your desired retirement goals!

Contact us today so we can get started helping you plan for a better tomorrow!

ome people think that the only time to reach out to a mortgage broker is when they’re in the market for a new house.

But as you’ll see below, mortgage brokers can assist you with a variety of financing needs at every stage of your (adult) life.

In 2023, tens of thousands of Canadians used the services of a mortgage broker, including nearly 50% of first-time buyers.

A resource to count on at every stage of life

For many of those clients, the broker’s services extended well beyond the initial house purchase.

Here are some of the additional ways in which a mortgage broker has your financial well-being at heart, whether you’re a first-time buyer or a senior considering a reverse mortgage.

An upcoming mortgage renewal

Even after working with a mortgage broker on their home purchase, many borrowers don’t think to reach out again when their mortgage term comes up for renewal. Instead, many take on the stress and hassle of renewing and negotiating with their lender on their own. 

But why go at it alone when we are in your corner? The benefit is usually a more competitive rate, either with your current lender or–if financially viable–with a new one. 

Purchasing an investment property

Maybe you already own a home and are considering adding an investment property to your holdings. If you’re not an experienced investor, the process can be overwhelming as there are many differences compared to purchasing a primary residence.

Refinancing to access your home equity

Whether you want to lower your monthly mortgage payments, lower your overall monthly mortgage and credit card payments or access some of your home equity through a refinance, which essentially replaces your current mortgage with a new one, I can help you explore your options.

Securing a reverse mortgage in retirement

Reverse mortgages are an increasingly popular way for those aged 55  and over to access the equity in their home to assist with retirement. If you are considering a reverse mortgage, a mortgage broker can help you understand the various providers and products available and help you narrow down which options may be best for you.

Questions or concerns about your mortgage or financial situation

Do you find yourself losing sleep over rising monthly mortgage payments or debt loads that are becoming unmanageable? Or have you experienced a significant change in your financial situation since you secured your mortgage–such as a job loss,  a change in income, or marital status? First  Avenue Financial can help you explore the options available to you in order to improve your situation.

Bringing a wealth of resources to your fingertips

With a team of professional mortgage brokers and financial advisors, First  Ave brings experience, knowledge, and networks–including in real estate, insurance, and wealth management–to each client that we work with. While your banker may change, we remain your financial partner for life.  Contact us today to see how we can be of assistance!

Interest rates are front and center these days and for good reason. Despite a two-meeting rate pause by the Bank of Canada, the central bank resumed its rate hikes in June, sending interest costs even higher. 

The Bank has now hiked its key lending rate nine times for a cumulative total of 4.50 percentage points, or 450 basis points, since March 2022. 

For those of you with a variable-rate mortgage or an upcoming renewal, it’s undoubtedly causing you added stress and anxiety. Let’s be honest, nobody likes to pay more interest. 

So, how much longer could this rate-hike cycle last? 

The good news is we may be nearing the end, according to market and economist forecasts. Of course, forecasts are constantly changing as new economic data becomes available, so nothing is certain. 

What does history tell us about the timing of the first-rate cuts?

Once we reach the Bank’s terminal rate—or the peak rate for this cycle—markets and borrowers alike will shift their focus to the timing of the Bank’s first interest rate cuts. 

And what can we learn by looking at past rate-hike cycles in Canadian history? Let’s take a look:

2004 to 2007: The Bank of Canada gradually increased its key interest rate from 2.50% to 4.50% to rein in strong economic growth and concerns about inflation. It took five months after the last rate hike for the Bank to start cutting rates in response to the global financial crisis. The rate cuts continued until 2009, bringing the interest rate down to 0.25%.

2010 to 2011:In response to improving economic conditions and concerns about rising household debt, the Bank raised its key interest rate from 0.25% to 1.00% during this period. In this case, over four years passed before rate cuts began in early 2015. 

2017 to 2018: The BoC raised its benchmark rate from 0.50% to 1.75% to combat strong economic growth and inflation. It wasn’t until 2020, in response to the COVID-19 pandemic, that it aggressively cut rates to support the economy.

It’s important to remember that each cycle is unique, and the specific timing and magnitude of rate increases and cuts can vary. As seen above, the timing between the last rate hike of a cycle and the first rate cut can range anywhere from mere months to several years. 

The current outlook

Although the timing of the first-rate cuts for this cycle has been pushed out to next year, nobody knows for sure when that will happen due to rapidly changing economic conditions. 

Some forecasts from earlier this year initially had rate cuts expected by now. And as BoC Governor Tiff Macklem illustrated in late 2020 when he assured borrowers that interest rates would remain low “into 2023,” even the central bank can get its forecasts wrong.

As mortgage professionals, our job isn’t to pinpoint where rates will be at a specific moment in time, but instead to keep on top of larger trends and help you find the best options given the information we have available. 

That’s where First Avenue Financial can help. So, if you’re concerned about rising interest costs or worried about an upcoming renewal, please don’t hesitate to contact us so we can review the best solutions for you.