How Interest Rates are Like Gas Prices

Anita Groves • March 12, 2019

Have you ever noticed that just like gas prices, interest rates seem to go up and down for no reason at all?

How come it feels like right before you are ready to buy a property, rumours of interest rate changes will start to flood the media? Or why do gas prices always seem to go up right before the long weekend (when you are heading out of town)? You could spend a lifetime trying to figure these things out. However, knowing why these things happen isn’t as important as knowing what to do when they happen!

How to Protect Yourself from Rising Interest Rates!

Allow me to share a few things you can do to protect yourself from rising interest rates if you are looking to purchase a property in the near future.

Be Prepared. Know Your Mortgage Options

Unlike most gas stations where gas is gas regardless of where you fill up, not all mortgage products are created equal. Just because a mortgage product has a lower sticker price attached, doesn’t mean it’s necessarily a better deal. You really have to understand the fine print in order to make the best choice for you.

As your unbiased mortgage professional, I can help you understand all the products available to you and how the fine print will impact the overall cost of the mortgage. I can help you understand the difference between fixed and variable rates, the impact of shorter vs longer terms and amortizations, pre-payment privileges, and potential mortgage penalties.

By understanding your options, you can make a decision that is based on your financial situation and goals rather than based on fluctuating interest rates. Protect yourself emotionally by not placing such a high value on an arbitrary “sticker price” (rate) instead focus on finding the best mortgage product available for you at the time you are purchasing.

Be Prepared. Get a Pre-approval With a Rate Hold

If you are shopping for a property, not only should you be pre-approved for the mortgage, but you should have a rate hold in place as well.

A pre-approval is a lender’s written commitment to offer you a mortgage assuming the details in the application are proven accurate. A pre-approval is not a guarantee that you will get the mortgage, just that they have looked at the initial application and believe you are a enough of a qualified applicant to proceed once you have found a property to purchase.

The pre-approval process consists of the following:

A mortgage application – to assess your financial situation (employment, credit and downpayment).
Collection of documents – to support the application.
Submission of the application – for lender review.
A response from the lender – indicating they will consider lending to you based on a set purchase price limit, specific product, and acceptable property.
A rate hold – the time you have to close the mortgage while they will guarantee it at a certain rate.

So as part of the pre-approval, it’s really the rate hold that protects you against rising interest rates. A rate hold is a lender’s commitment to hold a certain rate on a certain product for a certain time frame. For example, if you like the 5 year fixed term (product), and a lender is offering 2.64% (rate) a rate hold can be secured that will guarantee the rate anywhere from 30-120 days (time frame), this is the time you have to take possession of the property.

Some lenders offer more aggressive rates (lower rates) but limit the hold to a shorter time period, usually 30-60 days. This is why some banks, lenders, or brokers advertise “Rate Specials”. However it should be noted that not all rate specials come with a rate hold. Some rates are only available for applications where an offer to purchase has been accepted on a property.

If your rate hold expires, it is easy enough to get another one in place with an updated application. Also, if rates drop while you have a hold in place, and you find a property to purchase, typically we are able to drop the rate for you at closing. It’s as easy as that!

Now… if you made it this far and you’re looking for advice on how to get the best price at the pump, unfortunately I can’t help you out there, that is a mystery to everyone! But if you want to know more about securing a pre-approval and a rate hold, please contact me anytime.

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Anita Groves

PROFESSIONAL MORTGAGE BROKER

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Understanding Credit And How It Relates To Your Mortgage

By Anita Groves • October 22, 2025

Credit. The ability of a customer to obtain goods or services before payment, based on the trust that you will make payments in the future. When you borrow money to buy a property, you’ll be required to prove that you have a good history of managing your credit. That is, making good on all your payments. But what exactly is a “good history of managing credit”? What are lenders looking at when they assess your credit report? If you’re new to managing your credit, an easy way to remember the minimum credit requirements for mortgage financing is the 2/2/2 rule. Two active trade lines established over a minimum period of two years, with a minimum limit of two thousand dollars, is what lenders are looking for. A trade line could be a credit card, an instalment loan, a car loan, or a line of credit; basically, anytime a lender extends credit to you. Your repayment history is kept on your credit report and generates a credit score. For a tradeline to be considered active, you must have used it for at least one month and then once every three months. To build a good credit history, both of your tradelines need to be used for at least two years. This history gives the lender confidence that you’ve established good credit habits over a decent length of time. Two thousand dollars is the bare minimum limit required on your trade lines. So if you have a credit card with a $1000 limit and a line of credit with a $2500 limit, you would be okay as your limit would be $3500. If you’re managing your credit well, chances are you will be offered a limit increase. It’s a good idea to take it. Mortgage Lenders want to know that you can handle borrowing money. Now, don’t confuse the limit with the balance. You don’t have to carry a balance on your trade lines for them to be considered active. To build credit, it’s best to use your tradelines but pay them off in full every month in the case of credit cards and make all your loan payments on time. A great way to use your credit is to pay your bills via direct withdrawal from your credit card, then set up a regular transfer from your bank account to pay off the credit card in full every month. Automation becomes your best friend. Just make sure you keep on top of your banking to ensure everything works as it should. Now, you might be thinking, what about my credit score, isn’t that important when talking about building a credit profile to secure a mortgage? Well, your credit score is important, but if you have two tradelines, reporting for two years, with a minimum limit of two thousand dollars, without missing any payments, your credit score will take care of itself, and you should have no worries. With that said, it never hurts to take a look at your credit every once and a while to ensure no errors are reported on your credit bureau. So, if you’re thinking about buying a property in the next couple of years and want to make sure that you have good enough credit to qualify, let’s talk. Connect anytime; it would be a pleasure to work with you and help you to understand better how your credit impacts mortgage qualification.

Don’t Let Collections Derail Your Mortgage Application

By Anita Groves • October 15, 2025

Can You Get a Mortgage If You Have Collections on Your Credit Report? Short answer? Not easily. Long answer? It depends—and it’s more common (and fixable) than you might think. When it comes to applying for a mortgage, your credit report tells lenders a story. Collections—debts that have been passed to a collection agency because they weren’t paid on time—are big red flags in that story. Regardless of how or why they got there, open collections are going to hurt your chances of getting approved. Let’s break this down. What Exactly Is a Collection? A collection appears on your credit report when a bill goes unpaid for long enough that the lender decides to stop chasing you—and hires a collection agency to do it instead. It doesn’t matter whether it was an unpaid phone bill, a forgotten credit card, or a disputed fine: to a lender, it signals risk. And lenders don’t like risk. Why It Matters to Mortgage Lenders? Lenders use your credit report to gauge how trustworthy you are with borrowed money. If they see you haven’t paid a past debt, especially recently, it suggests you might do the same with a new mortgage—and that’s enough to get your application denied. Even small collections can cause problems. A $32 unpaid utility bill might seem insignificant to you, but to a lender, it’s a red flag waving loudly. But What If I Didn’t Know About the Collection? It happens all the time. You move provinces and miss a final utility charge. Your cell provider sends a bill to an old address. Or maybe the collection is showing in error—credit reports aren’t perfect, and mistakes do happen. Regardless of the reason, the responsibility to resolve it still falls on you. Even if it’s an honest oversight or an error, lenders will expect you to clear it up or prove it’s been paid. And What If I Chose Not to Pay It? Some people intentionally leave certain collections unpaid—maybe they disagree with a charge, or feel a fine is unfair. Here are a few common “moral stand” collections: Disputed phone bills COVID-related fines Traffic tickets Unpaid spousal or child support While you might feel justified, lenders don’t take sides. They’re not interested in why a collection exists—only that it hasn’t been dealt with. And if it’s still active, that could be enough to derail your mortgage application. How Can You Find Out What’s On Your Report? Easy. You can check it yourself through services like Equifax or TransUnion, or you can work with a mortgage advisor to go through a full pre-approval. A pre-approval will quickly uncover any credit issues, including collections—giving you a chance to fix them before you apply for a mortgage. What To Do If You Have Collections Verify: Make sure the collection is accurate. Pay or Dispute: Settle the debt or begin a dispute process if it’s an error. Get Proof: Even if your credit report hasn’t updated yet, documentation showing the debt is paid can be enough for some lenders. Work With a Pro: A mortgage advisor can help you build a strategy and connect you with lenders who offer flexible solutions. Collections are common, but they can absolutely block your path to mortgage financing. Whether you knew about them or not, the best approach is to take action early. If you’d like to find out where you stand—or need help navigating your credit report—I’d be happy to help. Let’s make sure your next mortgage application has the best possible chance of approval.