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1 Jan

Calgary Secondary Suites – What’s Happened and What’s Next? 


Posted by: Garth Chapman

  • From June 1, 2018 the City created a 2 year amnesty period, during which the City has created a grandfather program for existing secondary suites in single family homes, where you must show proof the suite was in operation prior to December 2007.
  • As of 2019 the grandfather program now effectively includes all existing secondary suites. No proof of prior operation is required.
  • City fees: Development Permit is $471 (currently zero under grandfather program) and Suite Registry is $232, so $700 in total plus drawings.  These fees are waived until May 31, 2020.
  • After the amnesty period legalizing a suite may mean the following additional costs:
    • Development Permit and Suite Registry fees, currently waived, may be applied ($700-ish).  It is quite possible the City will extend the waiver on either or both of those fees.
    • Starting in June 2020, all secondary suites (regardless of construction date) will need to comply with the National Building Code – 2019 Alberta edition.  This means the following:
      • The property will require a separate furnace for the suite
      • The furnace room will have to be fully drywalled (instead of the current $500 option for a sprinkler head in place of that).
      • There may be various other items required by the new code.
      • Costs will be 3 to 4 times higher than under the amnesty period, during which we legalized our four secondary suites.  A second furnace plus re-configuring the HVAC ducting can run up to around $10,000 especially if ceilings have to come down for the ducting work to be done. Drywalling the furnace room can easily run to $1,000 and above.
  • If a property owner calls the City or has a Contractor or Architect call the city on their behalf, the City will book an Inspector to come to the property (good to have the RPR with you) and the Inspector will complete the application on-site and submit it for you.  If you have a good Contractor experienced with legalizing suites you are better to go that way.
  • Try not to ask for exceptions in your application – if you are using an experienced Contractor you can on a few areas only.
  • Best suites are 4-level splits with 3rd level walkout. They show well and are nearly never vacant.  Carriage Suites (above garages are also excellent.
  • Properties built in the mid-1990’s and newer are best.
  • The City declared that after the two-year amnesty period ending June 1, 2020, owners of properties with illegal secondary suites could be subject to fines or penalties for advertising non-compliant suites for rent.  I suspect this will be extended beyond June 2020.

On Secondary Suites in Duplexes

  • On November 18, 2019, Council accepted the land use bylaw amendments that would allow for legalization of secondary suites in semi-detached dwellings (duplexes) in the following districts: R-C2, R-2, R-2M, M-CG, M-C1, M-C2, M-H1, M-H3, M-X1, M-X2, CC-MH and CC-MHX.
  • I don’t know yet when this new Bylaw will come into effect.  This may create an opportunity for investors on Duplexes.

Key Takeaways

  1. After the 2 year amnesty period to June 2020 (which could be extended) you won’t be able to advertise an illegal suite on Rentfaster etc, and will have to advertise on Kijiji. The City will be actively searching the market for illegal suites.  So in the near future, likely by 2021 or 2022, any landlord with an illegal suite will have a tough time finding renters, will have lower rents, will have the City actively looking for them and shutting them down, and will have lower property values than those with legal suites.
  2. More and more lenders are backing away from lending on properties that contain illegal secondary suites. This will only get worse.

Main page Secondary Suite website City of Calgary webpage:

Apply or Legalize an existing secondary suite webpages:

Current City of Calgary webpage listing all legal registered Secondary Suites webpage:

1 Jan

Why Financial Independence is a Better Goal than Retirement


Posted by: Garth Chapman

I turned 65 this year, I’m not retired, and that is just fine with me. I enjoy what I do, especially on those occasions when I can truly help make a real difference to a family’s present or future.

In fact, it has long been my plan to not retire, but I wanted to ensure I didn’t HAVE to work.  My last 20+ years in business were primarily devoted to both enjoying what I do and to ensuring my own ‘Findependence’ or financial independence. Findenendence to me is largely about freedom to choose how you live your life.

I believe that this line of thinking helps to keep one young at heart. I particularly like how Clint Eastwood described how, at 89, he continues to work and behave like a much younger man. He said “I don’t let the old man in”.

Here’s an article on Financial Independence as a goal in place of retirement I think you might find interesting.

Why Financial Independence is a Better Goal than Retirement

7 Nov

The Real Estate Purchase Process


Posted by: Garth Chapman

With permission from the author, I am posting this very clear and concise description of the process from start to finish.  The author is well-known Edmonton real estate lawyer Darren Richards.  I have known Darren for several years and we personally use his services for most of our Edmonton area real estate transactions as well as the private lending that we personally provide to Northern Alberta borrowers.  And when my Capital Region clients need a real estate lawyer Darren is one of a very short list who I will refer them to.  Read Darren’s blog post here

19 Oct

Four Legal Pot Plants, What Are Lenders Doing?


Posted by: Garth Chapman

As we all know, recreational marijuana is now legal in Canada. The law is set, but implementation and how policies and guidelines will impact our industry are yet to be determined. Generally, 30 grams for personal possession, basically an ounce baggie for those who might relate and up to 4 plants at home.

For realtors, mortgage brokers and their clients we are facing many months of the lenders sorting out their guidelines. If a borrower or seller voluntarily discloses they have been growing four legal marijuana plants, which should produce more than 30 grams, as a point of interest, how will the lenders, mortgage insurers and home insurers react?


As of today, many lenders do not have a policy. Some say yes four plants will be OK, some say case by case, and some say four plants will be a hard no. For the common existing house stigmatized as a “grow-op”, there are still very few lender options. We do have a couple of lenders for fully remediated grow-ops, and CMHC does consider those applications.  

Mortgage Insurers:

CMHC says they will carry on the same as they have been. Genworth and Canada Guaranty are saying either, case by case or the policy will be determined shortly.

Home Insurers:

As or right now we have not been able to get any consistent information on this subject. However, home buyers and homeowners are encouraged to check with their provider for their policy information.

For those folks growing up to four plants and looking for financing, expect your clients to get mixed results from banks and many lenders. Some lenders are considering air quality tests, home inspections, statutory declarations and other means to determine if the home has been impacted or damaged by four plants. For now, we have identified willing lenders. CMHC will consider the applications.

Please contact your Jencor Mortgage Agent or me if your clients have any questions on how the new legalization laws affect their options or to avoid complications with four plant files.  

Croft Axsen – Jencor Mortgage Corporation 

13 Jul

Take Control Of Your Renewal Process And Save!


Posted by: Garth Chapman

Nationally, Alberta has the highest percentage of homeowners with mortgage renewals coming up within the next two years.

You may be coming up for renewal soon. You may be concerned rates are rising, even with a renewal a few years away. The consensus is rates are increasing in North America over the next year and may continue to do so in the foreseeable future.

The new government has significantly changed the mortgage market with their implementation of new rules and underwriting guidelines. Due to these changes lenders are now restricted on what they can do and what they cannot offer to their clients.  Some specific niche situations are now larger factors in whether or not you are approved.

Here are some questions to think about when you’re up for renewal:

  • Has your credit score changed?
  • What is the loan to value of the mortgage required?
  • Was your mortgage originally insured by CMHC or another mortgage insurance company?
  • Is this a simple switch to a new lender with no new money or a refinance with added funds?


Depending on how you answer these and other questions, we may very well be able to get you a lower interest rate with better terms then what your current lender offers.

Your existing Lender will typically offer you a renewal rate around 30 days before renewal. In an increasing rate environment, why wait until the 30-day mark? Most lenders can lock in a rate hold for 120days. If rates go up 0.5% during the 120-day period, and you are locked in and do not have to worry about the increase.  

What Can a 0.5% increase mean for you?

If you have a $350,000 mortgage, you could save $8000-$9000 over the next five-year contract. As well potentially lower your remaining balance by $3000-$4000 at the end of your term. Do you want to save $10,000 or more?

Contact one of our Licensed Mortgage Advisors and let them get you the best financing available to you


Croft Axsen,

Broker/Owner, Jencor Mortgage Corporation

6 Jul

5 Things To Consider When Buying An Acreage Or Country Property


Posted by: Garth Chapman


For conventional mortgages,  lenders will finance a certain number of acres, a house & a garage. The number of acres that they will consider can vary based on the property location and the norm for that area. The minimum down payment can also vary based on the size and location of the land.  For example, a property that is close to a major urban area and under 10 acres would most likely be approved with 20% down payment. If it is a larger acreage 30+ acres and not within an hour of a major urban area, the minimum down payment will likely increase. 

For high-ratio / CMHC insured mortgages with a minimum of 5% down,  they will approve and ensure the value of the house, garage and the `residential component` of the land. If the norm / average acreage size for the area is 20 acres, this is what they will approve in land value. If it is 160k – then this is what they will approve. However, if you purchase a 160-acre acreage and all of the acreages surrounding it are only 20 acres – CMHC will likely only give value to the first 20 acres of land and the buyers will have to pay out of pocket for the value of the remaining land as determined by an appraisal.

It is typically easier to secure financing on CMHC insured Mortgages and it is not uncommon for lenders to require the mortgage is insured even if the buyers have a 20% down payment based on the purchase price. If it is a large acreage, has outbuildings of major value or is a mobile or modular home – these are all things that could result in either a larger down payment requirement and/or mortgage default insurance. 

If there is no home on the property a mortgage is not available and one would require a land loan. Land loans typically start at a minimum of 25% down payment and go up from there based on the location, size and value of the property, they also often come at slightly higher interest rates.

WHAT ABOUT POTABILITY? No mortgage unless there is good water! Potability reports are needed for all well water and will be requested either upfront with the lender approval or at the lawyers before closing.

WHAT ABOUT ZONING? Country residential is the easiest to finance. However, if the land is zoned Agricultural, but used as residential (no farming or commercial component) the lenders and insurers will consider this as well. Agricultural & Farmland that derives income is more difficult to finance. Lenders are wary as it is difficult to foreclose on agricultural land and if the Agricultural land has a farming component or income lender options become much more limited and down payment requirements increase.

WHAT IF THE PROPERTY HAS OUT BUILDINGS? Mortgages are for a house, garage and land – and that’s all.  If the property has an outbuilding of value the effective value of the property will often be reduced by the lender or insurer and this will affect the down payment requirements.

For example, if a client is purchasing a small acreage for 800k , and there is a brand new large heated shop, horse corrals and an arena on the property that the appraiser values in total at $ 160k, this would be deducted from the purchase price in the lenders eyes bringing the effective value down to 640k (800k-160k). The buyer would then need to have a minimum 5% down payment based on the 640k  effective value ($32k) PLUS 160k to make up the difference (value of outbuildings) for a total of $ 192,000.  Even though the buyer is technically putting more than 20% down based on the contract purchase price, the lender and insurer would consider this to be financed at 95% of the value of the home, garage and land and a CMHC premium would apply. 

OTHER FINANCING FACTORS TO CONSIDER: You may need to allow extra time for conditions to be removed on acreage purchases as  CMHC appraisals and well water testing can cause delays. 

As always with mortgage financing, the buyer plays an important role. For strong clients, the lender may make an exception to their policies. 

Written By: Cory Lewis – Jencor Mortgage Advisor

29 Jun

Understanding Mortgage Payout Penalties


Posted by: Garth Chapman

It is very common for people to believe that the rate is the most important consideration when selecting a mortgage product. In many cases, this is a reasonable assumption, many times customer are deciding between mortgage products that are very similar in rate. In this case, as in most, understanding the terms of the mortgage are more important than the interest rate. It is unfortunate that too many  Canadians find themselves learning about one of the most important terms which have a very negative effect on their financial situation when it’s too late, Payout Penalties.

When calculating a mortgage payout penalty, banks and broker lenders use the greater of:

  1.  A 3-month interest penalty or
  2.  The interest rate differential (I.R.D)

This is where the similarities end.  Banks calculate their I.R.D. based on the discount off the posted rate for the nearest term at the time of payout, while the broker lender uses a re-investment rate.  The bank discount is the discount you received at the time of approval.

The example that I am using is a mortgage with a balance of $400,000.00 at 2.79% with 26 months left on the original 5-year term.  The2.79% rate from your bank was a 2% discount off the original 5-year posted rate of 4.79%.  The broker lender does not deal in posted rates as such.

Interestingly enough, the bank posted rate for the nearest term of 2 years was 3.24%, and the reinvestment rate for the broker lender was also 3.24%.

For the broker lender, the reinvestment rate was higher than the rate on the mortgage paid out, so the 3-month interest penalty is charged.  The penalty worked out to $2,790.00.

The bank penalty was calculated using the original 2% discount subtracted from the 3.24% posted rate for a 2-year term.  This resulted in the penalty being charged as the difference of 2.79% minus the 1.24% or 1.55% differential for the remaining 26 months of the term.  The result was a penalty in the amount of $13,433.33 or a difference of $10,643.33.  The banks not only get to charge the higher penalty but also get to reinvest the money at the higher rate.  Win, win for the banks but lose, lose for the borrowers.

In the past three years, many Albertans had to sell their homes due to unforeseen circumstances. Do you not think that the $10,000.00 plus in penalty differences would have been better in the hands of these Albertans or your hands versus going to the Ivory Towers on Toronto’s Bay Street?

For all your mortgage financing requirements, please contact Jencor Mortgage Corporation.

Written by: Dave Melnyk, Mortgage Advisor – Jencor Mortgage Corporations

15 Jun

Could a Purchase plus Improvements be the answer?


Posted by: Garth Chapman

Turn the house you like into the Home you will buy!

Government restrictions on refinance guidelines have reduced the equity homeowners can access for renovations. High ratio buyers especially, in a market with slow growth value, may wait years before the house has appreciated enough that an 80% Loan to Value refinance provides any money. If home buyers want to do upgrades the time of purchase may be the only opportunity where they can add the cost of the renovations to the mortgage.

Use the Purchase plus Improvements to:

  • Add a new or updated kitchen
  • Develop the basement for more living space
  • Update or replace the carpeting or maybe adding hardwood
  • Add a garage or workroom
  • Add a media room or “man cave”
  • Add an additional bathroom
  • A new roof
  • A more efficient central air or furnace system
  • Add new siding, eaves or fascia
  • Replace or updating doors and windows
  • Add major landscaping

If the property isn’t exactly what you want: renovate, add, or upgrade it!

There are specific requirements for the purchase plus improvements program, please call to learn the details. Exceptions to the generally understood parameters are available. Renovating up front may be a buyer’s best option.

15 Jun

Is A Variable Rate Mortgage Wise In Today’s Economy?


Posted by: Garth Chapman

Ever since the variable rate mortgage was introduced, the question became do I choose the fixed or variable rate mortgage.  With the recent rate increases, borrowers will usually choose the security of a fixed rate mortgage.  This does, however, come with a premium as variable rate mortgages are generally 0.75% less than their fixed counterpart. On a $350,000.00 mortgage, this translates to a payment difference of about $135.00 per month. You as the borrower can take the lower payment and use it for purposes such as:

  1.  Debt reduction –  Paying down higher interest rate debt such as credit card, lines of credit or accelerating loan repayments on personal loans.
  2.  Savings–   Invest in RRSP’s or RESP’s for your children’s future education or just keep it in liquid savings for future use.


The preferred method of using the payment savings would be to increase the payment on the variable rate mortgage to that of the fixed rate mortgage. The increased payment portion will assist in the faster reduction of the principal on your mortgage. This will help to reduce the impact of prime rate increases over the term of the mortgage.  If the prime rate does increase according to what the economists are predicting, we can anticipate increases in the prime of approximately 0.25% six months for at least the next 18 months.  This would now bring the variable rate mortgage to the same rate as what your fixed rate mortgage would have been.  With having to use the increased payment you would still be ahead, as initially, you had the rate savings plus the increased reduction in your principal.  If the prime continued to increase by the same 0.25% every six months, it would take over 3 years for the variable rate mortgage not to outperform the fixed rate mortgage.  If the prime rate increases don’t occur as predicted, then the pendulum swings greater in the favour of the variable rate mortgage. The variable rate mortgage also offers the same prepayment options as other mortgages plus you have the benefit of lower payout penalties should the need to sell arise.

The variable rate mortgage does have the inherent risk of the prime rate increases, so if you the borrower feel the need for security opt for the fixed rate mortgage. Jencor Mortgage Corporation will be able to assist in getting you the borrower, the best rate for your individual circumstance.

23 Aug

When Your Mortgage Term Matures, First Get a Second Opinion


Posted by: Garth Chapman

In 2018 the mortgages of 47% of Canadians will mature. Roughly 70% of them will simply sign the mailed renewal offer from their bank. Without even attempting to negotiate the rate. On average those borrowers will pay 0.25% above the then-current market rate. That’s an extra $52 per month on a $400,000 mortgage. But it doesn’t have to be this way…

Calling your Mortgage Broker when your mortgage is about to mature is akin to getting a second opinion on a medical diagnosis.  So when your mortgage is soon to mature, for the sake of your financial health,  please do make that second opinion call to your Mortgage Broker.  He or she might advise you that your existing bank is making you the best offer you are likely to get and recommend that you take that offer.  Or they may simply help guide you in negotiating a better offer from your existing bank.  Or they may advise that they believe they can find you a mortgage better suited to your needs and objectives.  Often a good Mortgage Broker can make that assessment on the first phone call.  In those cases think of us as providing a sound professional second opinion.

When should you start thinking about this?

Most of us will find that much has changed in our life, career and financial position during the 3, 4 or 5 years since we took out or last renewed our mortgage.  That means that a proper review of that mortgage against those new realities is in order, and the good news is that process is really a pretty easy one.

Virtually all banks and mortgage lenders will hold an interest rate for you to protect against possible rate increases for up to 120 days (4 months).  So a little before 4 months in advance of the maturation date of your mortgage is when you should begin the process.  If you’re a Jencor Client then you will receive in the mail 4 months ahead a letter advising you of your upcoming renewal.  In this way we ensure that our clients are properly prepared in advance to ensure they make the best decision.

What are your rights and opportunities when your mortgage matures?

First a quick description of what the words mean.  The mortgage ‘term’ is the time period of the current mortgage contract.  This is distinct from the ‘amortization’ period, which is the number of years to go until your mortgage is totally paid off.  So with that in mind, mortgage term maturity in Canada means that the term you signed with the bank for your mortgage is up, and you can then in most cases either renew with that bank or you can transfer (aka Switch) your mortgage to any of a few dozen other mortgage lenders, generally without cost.

So in effect, on the mortgage maturity date you will be a ‘free agent’.   Let’s take this sports analogy a little further.  When you are a free agent, assuming you are a good player (ie good credit, income etc) the other teams (ie banks) will want you to change teams and play for them (ie take over your mortgage from your existing bank).  So this means you can move your mortgage to any other team (ie bank) to get the best deal for your needs, and usually without any costs as the new bank will pick up the Appraisal and legal costs for the mortgage transfer since they are growing their market share by talking some business away from a competitor.

An important thing to know is that the single biggest motivator or goal for banks in the mortgage business is growing their share  of the overall mortgage market. That’s a key reason they put money on sale (by lowering interest rates) when the real estate markets are busier in spring and summer.

A sports Agent knows all the teams in the league, and they know their athlete client’s capabilities and needs and goals.  The Agent then negotiates with the teams that fit their athlete client best to find the best fit, and then negotiates with the team(s) selected to get the best contract for their client.

Just like an athlete, you too have an ‘Agent’, your Mortgage Broker, whose role in this process is to assess your needs and objectives, to gather your information, and then to present you in your best light to the banks who have the mortgage products that will best fit you, and then to negotiate with those other banks to get you the mortgage that best fits your needs.  And finally to shepherd the mortgage completion through to the end to ensure everything goes according to plan, so you don’t have to.

So what are the details of how your Mortgage Broker will act for you in this process?

Your Mortgage Broker will work with you to understand what your needs, objectives and preferences are.  These will include things like Pre-payment Penalties, Portability, Bridge financing, Variable or Fixed rate selections, Term length, Pre-payment Privileges, Increase Payment privileges, Payment holidays, and more.

If you are an existing Client of your Mortgage Broker then this will mean a simple update of your previous Application and gathering the documents required, less of course the ones they have from your earlier file.  If you a new Client then it’s a fresh Application and gathering your documents.  Expect to spend 15-20 minutes to get acquainted and allow the Broker to learn what they need to know to allow them to minimize the documents and time needed from you going forward, then again about 15-20 minutes on the Application, and usually that much again providing the required documents.

So it can be from less than an hour, to perhaps a couple of hours in complex scenarios.  It really isn’t much of a time commitment on your part, especially when you consider the value that comes to you as a result, and with how significant your mortgage is in your overall financial picture, we think it’s time well spent.

And then they will review what your bank and the other banks are offering on rate and on terms and the above and present you with your best options based on the needs and objectives you determined together.  That will allow you to make an informed decision on which mortgage is best for you going forward.

As I wrote above, your Mortgage Broker may advise you that your existing bank is making the best offer and their best advice is to take that offer, or they may help you to negotiate a better offer from your existing bank.  In the event your current mortgage lender is not making a competitive offer or their terms are not appropriate for your needs, or if you simply want to move to another lender, then your Mortgage Broker will recommend the best alternative(s) for you.

If you decide to Transfer (aka Switch) your mortgage to another lender your Mortgage Broker will complete the Application process as I described above and ‘book’ your file, and within as little as 2-3 days, will present you with a Mortgage Commitment from the lender best fit for you, and then guide you through signing those via a thorough review of the documents.

And here is a National Post article on the subject. This piece makes the point about how banks use our fears to get a surprisingly large percentage of people to sign their mortgage renewal notice, and usually at higher than market rates. And all without even the tiniest sliver of the review of their Client’s needs and objectives that you now know is so important.