Shelter takes larger share in updated CPI basket weights + MORE Jun 17th

A lakeview cottage with cosy rooms, a sandy beach nearby and a dock to gaze into the sunset was the dream for Corrine Evanoff.

“For years, I’ve been on this journey of trying to find a cottage that would work for us,”  she said. 

But Evanoff and her husband didn’t want to incur the burden of constant cottage maintenance, spending vacation days fixing decks and pruning trees. They opted instead to rent over the years, still hoping to one day buy.

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The latest update to the Consumer Price Index (CPI) basket gives even more weight to shelter costs—particularly mortgage interest and rent—underscoring just how much housing expenses are shaping the inflation experience of Canadians.

Canada’s housing starts remained elevated in May, with the seasonally adjusted annual pace clocking in at 279,510 units—virtually unchanged from 280,181 in April, according to Canada Mortgage and Housing Corporation (CMHC).

Three years have now passed since interest rates took off in 2022, and though the Bank of Canada (BoC) has started backing down that ladder, holders of five-year fixed mortgages continue to face significantly higher rates and payments as their home loans come up for renewal. Even those currently in variable-rate mortgages may find their lenders insisting on higher monthly or biweekly payments henceforward.

For those in that position, as well as those whose mortgages expire in the next 12 months, it’s best to go into the renewal process armed with knowledge of the kind of terms you’ll face and your options. Knowing in advance what you’re in for can take some of the sting out of “rate shock.” Depending on what your current lender and others have to offer, it may even make sense to renew before your old mortgage expires.

Calculating your mortgage renewal

Use the MoneySense Mortgage Renewal Calculator to get a sense of what you’ll be paying once you renew. This tool allows you to play around with variables, such as the location, amount borrowed, mortgage term, amortization and payment frequency to help find loan terms that work for you…

During the pandemic, Canada’s recreational property market took off. There were double-digit percentage increases in the median sale price of cottages across the country, with eager buyers determined to leave the city at just about any cost. Bidding wars were the norm and many sales happened quickly and without an inspection. But just a few short years later, demand has eased in a big way and many pandemic-era cottage buyers want out.

While the situation presents a challenge to sellers, it’s an opportunity for those looking to buy their first vacation home. Cottage inventory is high, prices are dropping and mortgage rates have slowly but steadily come back down. We spoke to realtors Megan McLeod and Rebecca Campol of Sotheby’s International Realty Canada in Port Carling, Ont., to learn more and get tips on buying your first cottage in Canada.

Back to work—and away from the cottage

First, how did we get here? It’s a mix of pandemic and politics, according to McLeod. “January was a totally different market than February,” she says, noting that the recreational property market came to “a screeching halt” shortly after President Trump was sworn in…