Mortgage 101 – Make Your Move in Canada’s Market

Dan Ahlstrand and Clinton Wilkins welcome Jim Spitali, COO of Sagen, to explain how Sagen provides mortgage insurance for those with less than 20% down payment, allowing them to enter the market sooner.

Dan Ahlstrand
All right, welcome back to a very special edition of Mortgage 101. As we celebrate Financial Literacy Month, we’re hoping that we are going to be able to teach you a little bit about the markets. I know that that some of you out there are saying, oh geez, it’s a tough place to be these days with, with the way things cost, but we’re going to, we’re hopefully going to give you some knowledge so that you can take a look at your finances, and maybe it isn’t that far out of your reach. As we move forward. As I mentioned before the break, we’ve got a just a real long list today of special guests that will join us, in addition, of course, to Clinton Wilkins, who is the host of Mortgage 101 and the very first one off the top. And I’m so happy that he’s able to join us today. He is the chief operating officer for Sagen, and that’s Jim Spitali. Jim, how are you?

Jim Spitali
Thank you gentlemen for having me. So it’s a pleasure to be here with you, Dan and a mortgage guru and all-around nice guy over there.

Clinton Wilkins
Thanks, Jim, absolutely. We’re so happy you could join us. I think just having someone from the national scope to be able to join us on our show is really amazing. And Sagen has been such a great partner of mine over the last 20 years, and we’re helping customers every day, getting high ratio insured mortgages, and there’s been a lot of changes in the space. And so many customers ask me, “Is now the right time to buy?” And, I said before we went to break, I think the right time to buy is yesterday. But, I think people in their mind sometimes think and say that we need to have 20% down to get into the market. And, there’s maybe a stigma from getting a high-ratio insured mortgage. But, obviously, I think there’s a lot of opportunity there.

<strong>Overview of Sagen</strong>

Dan Ahlstrand
Can you explain what Sagen is and what you guys do?

Jim Spitali
Yeah, so Sagen is Canada’s largest mortgage insurer, so default mortgage insurer, and what Sagen provides is it provides first time home buyers or any borrower in Canada that has less than 20% down payment, and it allows them to to access a mortgage a lot sooner than having to save that that full 20% and when you take a look at what home prices have done in Canada, say, in the last 10, even 15 years, continuously seeing increases, and that 20% becomes daunting for many, many Canadians. And if you look at the newer generation of time homebuyers, like millennials, specifically myself, being one of them. I mean, you grow up with your parents who were baby boomers, telling you to avoid that mortgage default premium, when they were saving for a home, 20% was maybe $20,000, not even back then, but today, it’s almost impossible. Well, especially

Clinton Wilkins
In your 50s, while in Halifax, our average house price is somewhere almost like $60,0,000 so like 20% down is 120 grand. That is very prohibitive.

Jim Spitali
For people, absolutely, and Clinton, you’re absolutely accurate when you say, like, the best time to buy is yesterday. I mean, you look at what some people are paying in rents today, and that could be going into equity and building future equity, when for a potential future purchase. But even if you look at how the wealth has been built in Canada over the last 20 years, a lot of it comes from the home.

Clinton Wilkins
From real estate, it’s the biggest asset in many households. And obviously, the mortgage is the biggest debt. But I think the biggest challenge that first-time homebuyers have right now, guys, is just getting into the market.

Jim Spitali
Absolutely, absolutely, and that’s where, that’s where staging can help. We allow borrowers to enter the market with as little as 5% down payment, and we partner with mortgage professionals like Clinton, but also several lenders across Canada, making that dream of home ownership really, really come to fruition.

<strong>2026 as a Compelling Year to Enter the Market</strong>

Dan Ahlstrand
Jim, I hear a lot, and hear it from colleagues. I hear it from listeners. I hear it from people that I’m in the grocery store with, sure, that the dream of home ownership in Canada is fading. Why is 2026, with all of the pressures that we know that are coming, some of the things that Clinton and I talked about with taxes and with utility increases, why would 2026 be the year to consider using a product that you offer to get into that market?

Jim Spitali
Yeah, Dan, that’s, that’s a really great question, and, and really the the answer is, is, when you, when you look at everything that’s happening in the Canadian housing space, and even Halifax, right, you have a federal government now that is really laser focused on on home ownership and and affordable homeownership, and several different changes are being put in place today to to allow for that to happen more quickly. You look at the 30-year amortization that was introduced in late 2024, before that introduction by the federal government. Canadians, if they had less than a 20% down payment, could only use a 25-year amortization. Now we’re allowed to go up to 30 years, which allows Canadians to have a lower mortgage payment, in many cases, a lot lower than what they’re paying in rent today, and that is helping Canadians get into homes sooner as well. You’re also seeing interest rates have really nicely come down; some home prices, maybe not so much in Halifax, but across Canada, we’ve seen some. Home prices are soft as well. So you couple with what the federal government’s doing. You look at where interest rates are today. 2026 is actually a really, really compelling year to enter the market well.

Clinton Wilkins
And there’s more real estate. There are more listings here, which I think is amazing. One thing that I was curious about, Jim, is when the 30-year amortization was introduced, again for high-ratio insured mortgages, and it’s for any first-time home buyer or anyone buying a new construction property. What percentage of applications that you’re seeing would not have qualified if they didn’t have the 30-year RAM?

Jim Spitali
Yeah, so that number is actually just around 50% to 52%. That’s staggering. It really is, and it really shows you how that enhancement has impacted, in a positive way, several first-time home buyers. But we’re also seeing on the flip side of that, you look at the inverse of that statistic, you’re actually seeing several Canadians who are even taking that 30 year amortization, even if they did qualify under the 25 year the reason for that is some of the things that you gentlemen were talking about, cash flow management, cash flow management, rising costs on taxes, utilities,, closing costs. They’re factoring that into their decision as they enter that dream of home ownership, because when they leap to take on that first-time purchase, they want to make sure they can stay there, right?

<strong>Defining a First-Time Home Buyer and the Role of Government Programs</strong>

Clinton Wilkins
And I think there’s a misconception out there that you can’t get a high-ratio insured mortgage if you’ve already owned a home, which is not true.

Jim Spitali
Yeah, no, you absolutely can’t, although the majority of the business we do today is first-time home buyers, but it’s really only around 70% 30% are also repeat buyers. Okay, interesting. Re-entering the market as well. They are looking at increasing the size of their home with a growing family.

Dan Ahlstrand
I mean, this may be an obvious question, but what? What is the definition of a first-time home buyer? Is it somebody that’s never owned property before, or is it somebody that’s had property, but it’s been out of the market?

Jim Spitali
For a while? Yeah, that’s a question we get all the time, Dan, and it really is when we look at it from a staging perspective, it’s truly someone that’s never owned a home before. But the true definition of a first-time home buyer can differ by lender. I mean, even our government put stipulations on the definition of a first-time home buyer for the Home Buyers Plan.

Clinton Wilkins
Really is, and we don’t talk about the first home savings account enough, I don’t think. Really, it is such a great door, and it’s such a great source for a down payment. It’s really going.

Jim Spitali
To have a positive impact, I think, in another five years when people can actually start building up some, some some assets under that, that savings account, we don’t see much, I would say, activity around that today, but the home buyers plan, where you can use an RSP to contribute towards a down payment, is something that that we see a lot of today as well.

Clinton Wilkins
Well, we still have a couple of minutes. I’m really curious to know, and we’ve thrown out a couple of stats, and I don’t know if they’re accurate or not, but tell us about gifted down payments. And I’m sure the applications that you see, when I first started, 20 years ago, a gift was 5000 or 20,000. Yeah. But I heard the average gift now in Canada is coming up on $100,000.

Dan Ahlstrand
If not more, the proverbial bank of mom and dad, right?

Jim Spitali
So, when you look at that, and keep in mind, like sagens looking at, pretty much anything with a down payment less than 20% so it’s the numbers are a lot smaller than that for us. But when you look at it across all mortgage applications, I can see the numbers certainly being that high. But, we typically see it anywhere in the $40,000 to $50,000 range. It’s kind of more of the average for a high ratio insurer, which helps them either get into, like a 90 loan-to-value, or even get to a 95 loan-to-value, right? 100,000 would be quite high for us, probably more. So I would say in the Ontario GTA or greater Vancouver markets, right?

Clinton Wilkins
Because someone can get a high-ratio insured mortgage with a purchase price up to 1.5 million.

Jim Spitali
1.5 million just has to be below 1.5 or 1.499999 we say, but, yes, absolutely. And that’s another change the government made last year as well.

Clinton Wilkins
That was at the same time the 30-year amortization was introduced. So I think that obviously has had some impacts here. I don’t know if we’re seeing that many above a million, but we’re seeing some. But I think that with that 30-year amortization is certainly allowing a bigger percentage of people to get into the real estate market. Now, people can put 5% down on the first 500, a nd then it’s 10% down after that. That’s correct, up to that 1.4999.

Jim Spitali
And another thing first-time home buyers sometimes are not aware of, and that’s the benefit of working with a mortgage professional, is that, sometimes, oftentimes, when you go with an insured mortgage, with stage and Mortgage default insurance, you actually get a lower rate with several lenders. I think a lot of first-time home buyers don’t realize that, although there’s this stigma to paying the premium, a lot of the time, that premium can be offset by the savings in the interest rate that they’re going to have for the five-year term, the three-year term, or whatever the borrower chooses.

<strong>Benefits of High Ratio Insured Mortgages</strong>

Clinton Wilkins
And there can be quite a difference in the interest rate between a high-ratio insured mortgage and a conventional mortgage. Customers often think, Well, I have more money down. I should get a lower rate. It’s not the case because lenders, when they have this high ratio insurance, are really protected, so they can offer those customers the lowest interest rate.

Jim Spitali
So that’s another benefit for first-time homebuyers or even any Canadians who are using our products.

Dan Ahlstrand
Jim, a pleasure. Lots of really great information. Hopefully somebody out there is going to take a look at one of those 30-year amortizations, because it’s going to save them a bunch of money.

Jim Spitali
Thank you so much for this opportunity.

Dan Ahlstrand
That’s Jim Spatali from Sagen. We’re going to take a break for the news. Mortgage 101 is going to continue this special edition, a live edition, of Mortgage 101 after the news. And when we come back, we spoke to our next guest last year, brought some really great information, so we’re welcoming him back this year, the head of mortgage creditor insurance at Manulife. It’s Mario Cluche, and he’ll be joining us. You’re listening to the Todd Veinotte Show, special mortgage 101 edition with Clinton Wilkins. We’re back after the news.