Tino Brelak is an experienced and knowledgeable mortgage broker servicing and helping clients in the Greater Toronto Area (GTA) for over 15 years. His banking background (including branch manager, credit auditor and financial advisor) allows him to navigate the mortgage process and ensure you get both the best mortgage rate and the right product. Whether your credit is perfect or poor, Tino can help you purchase a home, refinance, finance your investment property or get you the best mortgage rate at renewal.
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R&R... Refinance & Renovate

[Posted on: March 21, 2017]

A well know Toronto scenario: "Our tiny bungalow is now worth $1M dollars! We should sell it!..." Which then begs the question - "Where would we go - what could we buy for $1M?"

As the value of property goes up - so too do the costs associated with buying and selling. Legal fees, the cost of selling and (most impactfully) the Land Transfer Tax can add significant costs to moving homes. So it's no wonder that renovations are on the rise in Ontario.

The Star recently reported that the amount of money spent on home renovations and repairs now exceeds new home construction - with Ontario accounting for almost 40% of all Canadian renovation dollars spent.

So if you're debating whether to "love it or list it"... and leaning towards staying put and fixing up, here are some financing options to consider.

The most common way to borrow to renovate is by accessing equity in your home. This can be done by setting up a Home Equity Line of Credit, or by refinancing (increasing) your existing mortgage. Both of these options are relatively simple and inexpensive, however limit your borrowing to 80% of your home's value.

What if you are already near 80% of your home value though? What are your options then?

Refinance Plus Improvements is a program that let's you borrow money based on the future, improved value of your property. For example, if your home is worth $500K, you already have a mortgage of $400K (hence 80% of the present value) and you want to replace your kitchen and finish your basement - your only decent option is uti ...Read Morelizing Refinance Plus Improvements program.

Here's how it works. You would present your mortgage broker with the plans and estimates of your renovations. In certain cases, an appraisal may be required. The bank will approve your mortgage and give you a green light to start renovating. Once the renovations are complete, an appraiser will confirm that renovations have been done according to the original plans. If satisfactory, the bank will release 80% of the funds which you can then use to pay your contractors.

Remember, the total mortgage cannot exceed 80% of the property value, that's why you are responsible for 20% of the renovation cost.

Renovations don't have to be completed by licensed contractors. You can use the program to finance the material and do the renos yourself.

For the details of the program, please contact me directly.

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Increase in CMHC insurance premiums

CMHC is increasing its homeowner mortgage loan insurance premiums as a result of our regular review of insurance products and to reflect the new OSFI Capital Requirements for Federally Regulated Mortgage Insurers that came into effect on January 1, 2017.

The new premiums are effective March 17, 2017 and will result in an increase of approximately $5 to the monthly mortgage payment of the average CMHC-insured homebuyer.

At LTV (loan-to-value) of 95% or lower, the premium will increase from 3.6% to 4%.

The LTV of 90% or less, the premium will go from 2.4% to 3.1%.

For a full list of changes, please visit www.cmhc.ca

Which renovations go right to your bottom line?

Updated kitchen - The kitchen is almost always the heart of the home, so it`s no surprise that kitchen renovations consistently provide the best return on your renovation investment.

A sparkly bathroom - Bathroom renovations are also very reliable when it comes to boosting the overall value of your home.

Fresh painting - Whether it`s inside or outside, a fresh coat of paint can work wonders on the overall impression of your home.

Focus on decor - Updating lighting and plumbing fixtures, counter tops, and replacing worn flooring or refinishing hardwood floors are also definite ROI winners.

Bank of Canada holds the key interest rate steady

As expected, the Bank of Canada announced on March 1st that it is holding the overnight rate at 0.5%, noting that "the global and Canadian economies have been consistent with the Bank`s projection of improving growth" although "exports continue to face ongoing competitive challenges" and that even with gains in employment, there still is "subdued growth in wages.

As uncertainties continue to weigh on the economy, the Bank "judges that the current stance of monetary policy is appropriate."

We expect to see interest rates staying low in Canada well into 2020. The Bank of Canada believes it must continue its monetary policy of ultra-low rates to control inflation, stimulate other sectors of the economy besides housing and spur our Canadian export market.

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We regularly receive short-term rate promotions that are not posted online, which means our rates change frequently. Please contact me for these unpublished rate specials, and for your own personalized rate and mortgage plan.

Terms Posted Rates Our Best Rates
6 Months 3.14% 3.10%
1 Year 3.04% 2.44%
2 Years 2.84% 2.14%
3 Years 3.44% 2.44%
4 Years 3.89% 2.64%
5 Years 4.64% 2.69%
7 Years 5.30% 3.24%
10 Years 6.10% 3.79%
5 Year Variable 2.10% 2.10%


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